Financial Pros and Cons of Relocating for Work

You just interviewed for a job with an out-of-town company. Or maybe your current employer set the wheels in motion needing you to relocate. Whatever your situation, before you pack your bags and head to a new city there are a few financial decisions you may want to consider before relocating for work.

In a recent meeting I had with a client, they were trying to decide which town would offer them the best value of lifestyle for their income. In order to narrow down the field, they needed an actual cost of living comparison. So we took a couple of different towns into consideration before they loaded those boxes into a moving van.

Here’s an example of what we did to make their decision more informed. Let’s say this client is a general dentist. So, here is what we know about “Dr. Smiles”. He earns $160,000 a year in Knoxville, TN. He now wants to sell his practice and migrate south to Cape Coral, FL. Using this simple cost of living comparison calculator, Dr. Smiles now knows how this move will affect his lifestyle. The calculator lets him compare his current and possible new city with other major cities in the U.S.

The first point to take note of is the cost of living is 15% higher overall. That means in order to maintain his current lifestyle, the good doctor would need to make an additional $24,000 a year. He can easily see that will present a problem when the average salary for a general dentist in that city is only $117,026. And that salary is on the high end of income earners in Cape Coral. So it’s easy to see that the doctor might not be all smiles if he were to make that move. For Dr. Smiles, Dallas and Phoenix would both be comparable to Cape Coral, however not nearly as cheap as Knoxville.

Whatever your reason for considering a move, preparation is key to making the transition smoothly. Take a little extra time to research the area. Make an informed decision on the location of your next job based on the cost of living. That way, even if your company moves you, at least you can make the proper financial preparations. The last thing you want to happen is that new job with a higher salary to cost you more than what you were paying before.

If you need help planning the finances surrounding an upcoming move, contact us and we will help you plan a financially simpler path.