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Home > Relocation-Planning
Relocation Planning
Relocation Planning made simple
The importance of planning and analysis
You may be considering relocating to a new residence. Moving can be stressful and has been recognized as one of life's major stressors (Holmes & Rahe, 1967). Additional stressors often accompany a move, such as marriage, divorce or retirement. A side-effect of high stress levels can be a temporary deterioration of objectivity or sound judgment. When considering relocating, careful planning and research are essential to maintaining restoring one's ability to make informed decisions. This article suggests economic questions which should be answered prior to move.
California Home Loan Tip: When you begin your search for a new low interest rate California Home Loan, be sure to talk with your Mortgage Consultant about your short, medium and long term financial goals. Review your options for both fixed and adjustable interest rate home loans and do a cost analysis of a no point loan and an interest rate buy down. Taking the time to review all your options will open you up to possible loan structures you may not have been aware of. Your Mortgage Consultant should provide all the information needed to make a decision as to which loan is best for you. And if you're prepared, that decision is that much easier.
Financial Analysis - Benefits of a Financial Analysis:
- This article emphasizes the importance of obtaining an individualized, accurate, after-tax (federal, state, local and Social Security taxes) financial analysis of the changes in your living situation resulting from a job-related move. The analysis should consider all family members--including children. Will your spouse need to find a job? Will your children require additional school- or activity-related expenditures? Only by obtaining an accurate analysis can you make the decision which is best for you. The analysis can also be a valuable tool when negotiating with your new employer. It can help the employer better understand what they're offering you.
Don't settle for superficial, before-tax financial analysis. Such an analysis will inaccurately represent your new situation, perhaps leaving you with an unacceptable living standard. Don't accept the argument, "Others in this area in this job earn this much. . ." If your new employer could find someone in the area, they wouldn't be offering you the job! If you settle for a cursory analysis and end up with less than what you're accustomed to, you could be unhappy, less productive, back in the job market, or relocating again. The following pointers help underscore these important concepts.
- Cost of living and salary considerations:
- A lower salary may be a blessing in disguise. If you're moving to an area with a lower cost-of-living, you may be able to increase your disposable income, providing more money for essentials and investments. If you're moving to a higher cost of living area, you'll want to be equitably paid, or at least have the potential to soon offset the increased cost of living. Your analysis should include changes in:
- Recurring income and expenses:
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- Income from all sources: salary, wages or business income.
- Automobile and transportation expenses: personal and commuting distances, insurance premiums, maintenance, employer reimbursements, depreciation, etc.
- Benefits: medical, dental and life insurance, retirement, day care.
- Housing:
- Compare your current home with a similar one in a similar neighborhood.
- Be aware of increased rent, mortgage payments, property taxes, insurance premiums, upkeep and maintenance, etc.
- Non-recurring (one-time-only) income and expenses:
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- Capital gain and capital gain tax upon the sale of your current home if you purchase a lower-priced home.
- Capital gains and capital gains taxes upon the sale of other assets. For example, you sell a rental home because you can't manage it from your new location.
- Moving expenses: movers, hotels or temporary living quarters, travel expenses, telephone activation, etc.
- Non-recurring fees associated with purchasing or leasing a new home.
- Non-recurring fees associated with selling your current home.
Ideally, you'll be reimbursed for non-recurring expenses, and your new salary will provide you with at least a familiar standard of living.
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