Discovery Phase: Financial Impact

There are two types of financial assessments to make when planning your move. The first is to gauge one-time costs that will affect you immediately and the second is to understand the long-term impacts. Be sure to record your assessments on the Discovery and Decision form.  

Cost of Move

The costs associated with your move are ‘near-term’ expenses that will affect you immediately. You will need to account for these expenses with whatever cash you have on hand, assuming you are not being reimbursed for them through your employer.

  • Lease: contact your landlord to find out your cancellation obligation. Usually one to two months rent is typical, plus the remainder of your lease term in certain states. When finding a new rental, assume there will be two or three months rent up front. There are usually no finders fees needed, unless you use a real estate agent to help with your search. See Exiting your Lease or Your New Lease for more information.
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  • Real estate: calculate commissions and closing fees for selling or buying a home using a qualified real estate agent. Estimate 8 to 9% of the home value for selling, and 4 to 5% of the home value for purchase. These are rough approximations and will vary by region and home type. Also consider any gain or loss of equity from the sale of your home. See Selling Your Home or Home Purchase for more information.
  • Household goods move: the cost to move varies greatly depending on the size of your home, distance travelled, in or out of state locations, performing a self move and more. Because of the variables involved contact at least two movers for estimates. See Moving Companies for more information and Pre-Move Checklist for a complete list of movable items.
  • Travel and Living Expenses: estimate the cost to conduct several home search visits and at least one month of temporary living at a hotel in the new location in the event you can’t move into your new home right away.
  • Additional: estimate additional costs you may incur, including:
    • Duplicate mortgage payments or a bridge loan in the event you don’t dispose of your old home in a timely manner
    • Additional down payments for a new auto purchase or lease, or other large item
    • Incidental costs for auto registrations and license fees, club or gym memberships, and home items such as drapes, furniture, appliances, landscaping and other move in costs
    • Cancellation fees for exiting auto leases, private schools, gym memberships and more
    • Other costs and fees specific to your situation

Cost of Living

Cost of living expenses are ‘long-term’ expenditures that will affect your cash flow for years to come. Even a small increase or decrease in monthly costs will add up over time. If you are relocating for your employer, cost increases may be partly covered through a cost of living allowance.

  • Real estate: Mortgage payments are the largest cost factor to consider when moving. Any increase or decrease in interest rates will impact your monthly costs. See Home Purchase for more information.

  • Lease: the cost of a leased property is affected by many factors including location, municipality taxes, services included (e.g., cable television), amenities, proximity to commutation and more. See Your New Lease for more information.
  • Property taxes: all states have some form of property tax, although the amounts vary greatly. Tax assessments are imposed by a variety of entities, including cities, townships, counties and school districts. Some locations have discounts for elderly populations.
  • Other taxes: take into consideration other taxes that you will incur, such as a personal income on your wages. Additional sales taxes on items like fuel, cigarettes, clothing, consumables and services (e.g., repair work) can impact you greatly over time. Some states offer income tax credits, such as medical expenses and personal exemptions.
  • Goods and services: the cost of food, clothing, appliances, automobiles and just about anything you can think of all vary by region. The cost factors that impact these prices are varied and uncontrollable. Make the best estimate you can for the type of purchases that you are used to making.
  • Energy: determine the type of fuel you will use in your new home and then compare costs. Natural gas, propane, electricity and oil prices vary greatly by region and are susceptible to large price swings based on uncontrollable economic factors.
  • Transportation: travel by bus, rail or air may be needed for work commutation or to keep in touch with family and friends.
  • Auto purchase/lease: automobiles and the cost to finance them differ by region.
  • Activities: consider and compare the cost for all family member activities, including gym memberships, children’s activities, senior centers, club memberships and other activities you engage in.
  • Education: assess any cost differentials for private or parochial schooling, special needs assistance, and county or in-state college tuition. Certain states have sponsored college assistance programs that may be attractive over time. Some locations charge separately for kindergarten. Include the cost for nursery school and daycare as needed.
  • Other long-term costs specific to your situation or lifestyle.

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