Are you thinking of making a move? Every year, 16 million American families move, nudged by a new job, family ties, or the lure of a better lifestyle. But before you pack the first box, research the price tag of that better lifestyle. If you move to an area with higher living costs, you could end up with a lower standard of living -- even if you're making more money. On the other hand, a lower-cost location can help you live rich -- even if you aren't.
How Much Will Your Lifestyle Cost There?
You need details to get a fairly accurate cost picture. The local newspaper is a great source; consider subscribing to your new town's newspaper for a month or two so you can check out grocery promotions, car ads, housing and employment classified ads, and news. Other tips:
As you uncover cost-of-living information about the location you're considering, put those figures into a worksheet. A worksheet will help you figure the income you'll need in the new location, and it will help you answer the should-I-stay-or-should-I-go question. Here are some key price points to consider:
Study Housing from Every Angle
The cost of housing is one of the easiest yet most complex parts of the relocation puzzle. Easy, because home-price comparisons abound on the Internet, in local newspapers and via real estate agents. Complex, because to find a comparable home, you must take in many factors besides the size of the lot or the number of bedrooms.
To find out what a home like yours would cost in a new location, quiz personal contacts and real estate agents (or both -- the more the better) about school districts, local parks and recreation, the crime rate, the proximity of stores, services, and places of worship and the age, education, and occupations of the neighbors. Ask about "hidden" homeowning costs, such as recreation fees, trash collection, and community services.
Finally, check out the costs of homeowners insurance and the mortgage itself -- both of which tend to vary by region.
Try to get year-round sample bills for the kind of home you're considering. Some people pay plenty for cable TV, others rely on satellite dishes, and still others live so far out in the country that they pay long-distance fees to get on the Internet and have their own pumps and septic tanks instead of community water service. If you're moving to an area that gets dark early, has lots of swimming pools, or is very hot all summer, you can expect higher utility bills.
Pay Attention to Taxes
But don't dismiss a high-tax environment. Those taxes are paying for something, and if you're picking up better schools, convenient swimming pools, good libraries, trash collection, and more, the benefits may outweigh the cost. Saving on taxes could lead to higher expenses in other categories.
Insurance Rates Vary
There are huge regional differences in insurance rates, and for several reasons: Insurance companies and state regulations may be different, and some areas -- such as those prone to flooding or packed with expensive homes -- are more expensive to insure than others. The more populated your area, the higher your auto insurance costs will be.
Transportation Can Add Up
In the nation's big cities, the cost of train fares, parking, and bus tokens can pull hundreds of dollars out of your monthly budget. A small-town commute, on the other hand, can be a short walk or bike ride. Gasoline prices can vary widely from one place to the next. And if you're moving into an expensive part of the country, remember that everyone there charges what it takes to afford their own lives. So you can expect your new mechanic to charge more than your old one did for the same oil change.
Can You Still Find the Tacos You Love?
Comparing food costs from one area to another isn't a simple matter of pricing hamburger by the pound. The food you like best might not even be available, or at least not at a cost you can afford. If possible, take a shopping trip to your target area, or ask somebody who lives there to price your favorite foods for you.
Lifestyle differences can affect your food budget, too. If you're moving to an area with many high-priced restaurants and an active nightlife, you might be tempted to spend more on eating out and less on home cooking than you would in your current home.
"Free Time" Has Its Price, Too
How do you and your family spend your free time, and what will it cost to pursue those interests in a new location? Some communities have inexpensive youth sports leagues, swimming pools, skating rinks, and more, but in other areas those facilities are more limited. You might have to join an expensive club just to get tee time or a reliably-available tennis court.
Will a move take you far away from dear friends and family? If you envision keeping in touch to a great extent -- frequent phone calls, flying back to spend vacations with loved ones -- be sure to allow for the additional costs.
Get Rough Estimates From the Internet
You can do a quick-and-dirty estimate on the Internet, where cost-of-living calculators abound. But remember, these are very general figures that won't take your specific housing situation or special needs into account.
What Will Your New Life Cost You?
Income Salaries Investments Other Total Income
Expenses Housing Monthly mortgage or rent Security deposit Condo fees Homeowners insurance Maintenance Water Gas Electric Trash collection Property taxes Income taxes -- state and local
Transportation Commuting costs, parking Gasoline Auto insurance Auto maintenance Auto registration fees
Everyday Expenses Food Childcare Private school fees Entertainment Restaurant meals Lawn service Cable television Hair care Medical care Orthodontia Kids' Activities Entertainment Family vacations Long-distance phone bills
Net cost: Total income minus net expenses
If the bottom line in your new location is negative, think twice about the move, expect a lower standard of living, or ask your prospective employer for more money.