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How To Pay For Relocation Costs

By Andy Bowen

Moving is one of the most stressful life events you can endure — especially if you aren’t confident you can afford it. Whether you’re moving for a new job or personal reasons, there are a variety of factors that affect the cost and timeline of your move.

As a result of tax reform, Americans can no longer deduct moving expenses. So depending on how much help you get from your family, friends, or your new employer, the entire cost of the move might rest on your shoulder. Thankfully, there are a few quick, effective options to help ease the financial burden of embarking on a new adventure.

The repeal of the moving expense deduction

Under the previous law, taxpayers were allowed to deduct some of the costs of moving their goods and effects, plus certain travel expenses. But as of 2018, the exclusion for qualified moving expense reimbursements and deductions are both suspended until 2025. The one exception is members of the military on active duty who move due to a military order.

The cost of moving

Consider this: The American Moving and Storage Association says that the average cost of an interstate household move costs about $4,300. That’s no small expense. Even moving within the state costs an average of $2,300.

Every move is unique, but here are six common expenses to help estimate what your move might cost:

  • Movers. Hiring movers is one of the most important expenses you’ll make — you get what you pay for. HomeAdvisor found that the average move costs around $800, but that can vary widely based on the location, travel, and amount of goods and personal items you need to transport.

  • Travel. Gas, lodging, and food can add up quickly. And if you’re flying, it’s easy for a small family to rack up over $1,000 for a one-way domestic flight. Travel to your new home the potential to be the biggest expense of all.

  • Boxes. Boxes can generally be obtained for free from grocery or department stores. If you need containers for transporting fragile items, remember that durable plastic tubs can cost more than $20 each depending on the size.

  • Storage. If your move takes longer than expected because a house closing is delayed, for example, you might have to put some of your belongings in storage. The cost of a self-storage unit varies widely and depends on the location. CostHelper.com says a self-storage unit that’s 10 feet by 20 feet typically ranges from $95 to $155 a month, and $170 to $180 if the unit is climate-controlled.

  • Replacements. Odds are, at least a few things will be broken during your move. Remember to set aside some money to cover replacements.

  • Deposits and fees. It’s possible that you may have to pay early termination fees for services like cable or utilities. You might even have to put down a deposit for services at your new place prior to your arrival.

Instate vs out of state long-distance moving costs

According to Homeadvisor, here are the average costs for local and interstate moves. Local moving is any move under 100 miles within the same state and interstate or long distance moving across the country or over state lines. 

Type of mover                         Average Charge              Extra charges                                        
Local/Intrastate                       $80-$100 per hour         +25-$50 extra per additional mover
Interstate/Cross Country       $2000-$5000 per load    $0.50 per pound
 

Costs of moving based on house size

These are average costs for moving based on house size, according to HomeAdvisor. The chart is based on average hourly rates charged by local moving companies.  

Size of house                        Estimated time of move          Average price range
1 bedroom apartment        3-5 hrs                                        $200-$500
2 bedroom apartment        5-7 hrs                                        $400-$700
3 bedroom house                7-10 hrs                                      $560-$1,000
4 bedroom house               10+ hrs                                        $800-$2,000+

How to pay for your relocation

 

Personal loans

It’s ideal to pay for your move upfront, but that’s not always possible. If you need to finance some or all of your move, applying for a personal loan is one of the best options to consider. Personal loans are either secured or unsecured loans that are paid off in equal installments (what’s known as installment debt), usually over two- to five-year terms. The monthly payments include both principal and interest.

 

The main benefit of using a personal loan for your move is the interest rate. Borrowers with excellent credit can score rates around 10 percent. Those with good credit fall in the 13 – 15 percent range. With a credit card, good credit could get you a rate around the lower 20s. Over the lifetime of a loan, just a few points can make a big difference in the amount of interest you’ll pay.

 

Personal loans can be obtained from banks, credit unions, and online lenders. The application process is usually easiest with online lenders, but overall they’re much quicker than other loans. Sometimes the approval process might just take a few days.

Credit Cards

A credit card (sometimes multiple cards) might seem like a good way to pay for your move quickly. You might even be thinking about the potential to earn rewards in the process. But it’s not always the best idea.

Credit cards offer revolving debt, which means that, unlike personal loans, you don’t have to re-apply for credit when you need more money. The downside to that, however, is a higher interest rate. A good credit score will get you a credit card with an APR around 18 percent to 20 percent, while a personal loan can be closer to 10 percent.

Personal loan
Monthly payment    Details           Term                  Interest Paid
$98.22                        11% APR       36 months        $535.78

 

Credit card loan
Monthly payment    Details                                                    Term                  Interest Paid
$120                           12-month 0% intro APR, then 21%    36 months        $979.92

 

Credit card loan
Monthly payment    Details                                                     Term                 Interest Paid
$300                           12-month 0% intro APR, then 21%     10 months      $0

Let’s say you’ve crunched the numbers, and you expect your total expense to be $3,000. (That’s pretty conservative, even for an intrastate move.) And the largest monthly payment you can afford is around $100. A personal loan with an 11 percent APR and 3-year term will get you a monthly payment of $98.22. Over the life of the loan, you’ll pay around $536 in interest.

Most zero percent introductory credit card offers run from 12 to 18 months. So if you could afford to pay around $300 toward your balance every month, you could benefit from a credit card because you wouldn’t incur any interest. If not, a personal loan offers a lower payment and saves more than $400 over the life of your loan. Plus, you can’t be tempted to swipe a personal loan at the department store and add to your debt.

Here’s the bottom line: You should only use a credit card with a zero percent introductory interest rate offer for larger expenses, like relocation, when you can afford to pay several hundred dollars on your balance every month. (Ideally, you should pay it off completely before the 0% intro period ends.)

Don’t forget to ask about relocation assistance

If you’re relocating for work, don’t forget to ask about relocation assistance. It can be difficult to ask for help for fear of sounding demanding or greedy, but remember, the worst your employer can say is no.

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Photo Credit: Pexels

7 Handy Tips to Smooth Your Downsizing Move

By Michael Longsdon

 

As you transition into your golden years, you might consider downsizing your home. A recent article from USA Today highlighted how downsizing can be a good option to save money on taxes, improve access to health care, and save money on monthly utilities, which is especially true if you’re moving to a small space due to medical conditions. In order to avoid the stress of moving, here are a few ways you can make the transition smoother.

Find Your New Home Online

 

Before heading out to look at houses, research homes online in the area you’d like to move to. You can get a more accurate idea of what the price range is, as well as what size you’d like. This can save you a lot of time and energy on narrowing down houses and give you an idea what to expect. Homes in Burlingame, California, have sold on average for $2 million in the last month, and having that knowledge can help you decide if you can afford your dream house.

 

Focus on Function

 

Downsizing experts mention that downsizing can give you an opportunity to find furniture and design rooms that are focused on function, accessibility, and simplicity. Look for homes that will suit your physical needs. By doing so, you can figure out which of your items to get rid of. If they don’t have a practical function or hinder your movement/accessibility in any way, then they can go. Although saying goodbye to items you’ve accumulated over the years is difficult, doing so will give you a comfortable, clutter-free space to work with when you move in.

 

Plan for Extra Costs

 

Go beyond the down payment and mortgage. If you need to hire a moving team, rent a space to store your things, or pay for utilities before the new move-ins arrive, then plan for it. These are all expenses that some people might not necessarily factor into their financial downsizing plans. There are a lot of unexpected costs that can creep up when you move, so make sure you make room in your budget for any potential hiccups.

 

Reuse Old Boxes

 

You don’t always have to purchase boxes for your move. Sometimes, local business will have excess boxes you can use. Also, sites like Craigslist will sometimes have people giving them away, and U-haul even has a customer connect forum where you can get them. In fact, you may have several boxes left over by the time you’ve finished decluttering your old home. Then, after you’ve moved and unpacked, you can offer these boxes to other people.

 

Move Stuff a Little at a Time

 

If you already have a location picked out and have paid for the house, then giving yourself wiggle room regarding the move will help reduce stress. This works best if you live close to your new location. You can move your items over the course of one week or even a couple of weeks, depending on your situation of selling your current house.

 

Sell Things Online

 

Get your family involved and move room by room to find things that might have some value on eBay. This can result in some extra money to help you pay for additional (and unexpected) costs as you go through the downsizing process. Only sell items that are in functioning order and donate or throw out the ones that you second-guess.

 

When downsizing your living situation, there’s a lot to keep track of. You’re trying to figure out what to do with all your extra stuff, account for extra costs, pay attention to your medical issues, find a great new place to live, and get all of your stuff in there. You can make a move a lot easier to handle by planning ahead, being smart about downsizing, and focusing on your budget. Although saying goodbye might be tough, a brand new life lies ahead!