It’s essential to make long-term financial plans so you can expect a care-free lifestyle. One of them includes choosing the best place to live. The location of your home will determine how much time and money you’ll save in the long run, and use them in the best way possible. That’s why many people decide to move to a cheaper location to save and have more money to spend in their free time or to have a hefty little safety net when they get older. But, is moving really the right answer? Let’s see if moving to a cheaper city is worth it and if you should start looking for a new home.
The Living Costs
Relocating to a place with a lower cost of living implies that you will have to pay less for your housing, utilities, groceries, etc. However, that’s not always the case. It is also possible that a lower cost of living also means a lower salary. That’s why you should consider your income and expenses in both locations. Think about the items you spend the most money on, and compare the costs. Do detailed research on the bills you’ll have to pay after the move and see if it actually pays off to relocate.
Taxes
If you decide to move to another state, the taxes you have to pay may also change. There are currently 9 states with no state income taxes. But that doesn’t always mean that they are cheap places to live. For instance, Alaska has zero state income taxes and zero sales tax but the overall cost of living is relatively high. Remember, states have to pay for infrastructure somehow. Although they may have zero income tax, they may make up for it in some other way. Florida on the other hand also has zero state income taxes but targets its tax structure to benefit from tourists, so sales taxes and property taxes for part-year residents (i.e. snowbirds) are high. As far as other expenses, heating costs are virtually non-existent but cooling costs can make up for it.
Other states with zero income tax are:
- Tennessee
- Wyoming
- New Hampshire
- South Dakota
- Texas
- Washington
- Nevada
Nevada relies heavily on revenue from high sales taxes, sin taxes on alcohol and gambling, and taxes on casinos and hotels. South Dakota relies on revenue from taxes on cigarettes, alcohol, and property taxes but has lower than average sales taxes. Texas relies on income from sales and excise taxes and higher than average property taxes. Washington state residents pay high gasoline, sales, and excise taxes. It also has a higher-than-average cost of living and housing. Wyoming has low property, income, sales, and excise taxes since most of its revenue comes from taxing natural resources, primarily oil companies. In 2016, Tennessee eliminated its tax on investments in an attempt to lure more retirees to their state. But they do have high sales and beer taxes. New Hampshire doesn’t tax earned income but does tax dividends and interest but they are in the process of phasing that tax out. It does have excise taxes, including taxes on alcohol, and its property taxes are the third-highest in the country.
So you have to make sure you get the whole picture about not only income taxes but also property taxes, sales taxes and any other taxes in both locations to see if moving is a good idea.
Job Opportunities
Consider your job situation and see if moving to a more affordable city would also imply finding another job. Smaller, less expensive areas often come with fewer job opportunities. This is probably the main drawback of such relocation. But, if you work from home, have a good plan, or are thinking about starting your own business there, you may be able to make it work. It’s essential to look at employment numbers in general and the specific niche you’re interested in. Maybe the industry you’re looking for is well developed in the area, so you can find a way to earn as much as in the more expensive place.
Choosing the Place to Live
Big cities often come with a high rental/purchasing process of homes. They also come with smaller homes. When you decide to move to a cheaper city, you might be tempted to choose a bigger place for the same amount of money you’ve paid until now. You should know that this comfort comes with higher maintenance costs, too. So, decide if you’re moving to save money or live more comfortably. If you’re trying to save, relocating is the perfect moment to try to downsize your home.
Is Moving to a Cheaper Location the Right Decision?
This decision depends on a variety of different factors – make sure you consider them carefully first. Moving to a more affordable city comes with a set of pros and cons, which will determine your future lifestyle and your budget. Consider your work and life situation first, set your priorities, and decide what you expect from this relocation. The realistic, objective approach will help you determine if you need to relocate or find a more affordable home in the current place.
How to Make Moving Affordable?
Trying to save with this move starts with planning your relocation. There are several ways you can reduce your moving costs, so if you’re looking for an affordable moving alternative, try out these tips.
Plan the Budget
No matter how big your household is, it’s easy to spend more than necessary. Make sure you plan your moving budget in detail and find out what exactly are the services you are paying for. Many hidden costs can come with moving, so you have to be vigilant to avoid paying extra and dealing with unpleasant surprises. Get a couple of estimates to get an idea of the realistic price of your move. More importantly, talk to the moving team representative and see what is precisely listed in the contract. Some moving businesses can trick you into thinking you’re paying less for your move, when in fact, hidden costs and surprises are waiting for the final bill.
Do as Much as Possible on Your Own
Hiring movers is easy, yet it can be costly. The best solution for those on a budget is combining DIY tasks with professional moving services. Do as much as you can by yourself, and leave the heavy and bulky items to the pros. Remember, you should never risk your safety and health for a few extra saved dollars.
Downsize
Relocating to a cheaper city is the perfect opportunity to make your household more practical and cost-effective. This means you can downsize your home and pay less for the housing. To do this, declutter your home and get rid of the things you don’t need before packing items into boxes. If you keep only the essentials and things you use for real, you can expect to pay less for your move.
Get Free Packing Supplies
Even though these are not necessarily expensive, you might pay a lot for the packing supplies if you have a bigger household. That’s why you should try to find some free packing supplies. Ask friends or relatives who recently moved, or check out a local liquor store for some free boxes. Just be sure that the boxes you get are in good condition and can sustain the travel to another city.
Don’t Rush Making This Decision
Moving to a cheaper city can genuinely turn your life upside down. New environment, new work, and new friends – many changes will happen after you relocate. For that reason, be sure to consider all the aspects of this move, to tell if moving is worth it. It can be a huge money-saver, but sometimes this change doesn’t give as many results as you want. Give yourself some time to decide so you can organize the move without the rush and stress – and unnecessary costs.
You might also like:
- 4 Financial Hacks to Prepare for the Cost of Moving
- 4 Expensive Family Events & How to Save Money on Them
- How to Manage Your Family’s Budget during a Home Renovation
- Home Improvements that Will Pay for Themselves Over Time
- Finding Creative Ways to Save
- Is Downsizing Right for You?
- The Costs of Moving: 4 Thrifty Tips to Keep Your Next Move Cheap
