Relocating gives you a chance to change your entire life, including your budget – for better or worse. So you ought to consider the financial angle of your next move before you make it.
“Moving is an opportunity to make smart decisions that can have a disproportionately large positive impact on your finances,” says Natalie Colley, a financial analyst with financial planning firm Francis Financial, based in New York.
First, you need to think about what you really want out of your new hometown, and that depends on your stage of life. New grads looking to launch their adult lives, new families hoping to lay some roots, new retirees seeking a nice spot to land after exiting the workforce or just anyone in want of a new start – they all need unique qualities from the places in which they choose to settle. “For retirees, they have to take very good care of what they’ve got, their nest egg,” says Bert Sperling, founder and chief executive officer of Sperling’s Best Places, a research firm focused on demographic data. “For young folks, it’s all about looking to maximize their opportunities.”
Indeed, young people often need to trade affordability for a good career start. Areas that are well-known as bountiful job markets are often equally notorious for high living costs. And so the purchasing power of your salary may not equate to as much as you think. “It’s absolutely critical to understand how far your dollar will go in the city you are moving to before you make any big decisions,” says Taylor Schulte, a certified financial planner based in San Diego. “A $50,000 salary in Tucson, Arizona, is not the same as a $50,000 salary in San Diego, even though it’s only a six-hour drive.”