You’ve finally received the recognition you’ve long deserved and been offered a promotion at your job. Unfortunately, there is also a catch. You have to move to another part of the country.
While getting a promotion can be exhilarating; it can also be a little bewildering if you have to relocate to another state.
On one hand, you’re a little closer to the American Dream, something that fewer people have a chance to achieve these days of economic flux. In addition, you may get a handsome increase, adding thousands of dollars to your annual income and a chance to move up in your career.
On the other hand, things may not be as wonderful as they first appear to be. Besides assuming more responsibility and uprooting your family who have developed a network of close friends over the years, you also have to decide if you will actually be earning more after factoring the difference in the cost of living, income taxes, and housing. In addition, you also have to assess whether the quality of life will go up or down.
Here are 4 things you need to research before you agree to accept the new position:
1. Cost of Living
Cost of living is difficult to calculate before you move because it covers a broad spectrum of things. You could end up getting ahead, breaking even, or taking a step backward.
One way to get a rough idea of the difference is to do a sample analysis of your change in utility rates.
Your electric bill will depend on your rate of consumption. You will be paying for air conditioning in summer and heat in winter. You will also be paying to power all your appliances and electronic devices.
Fortunately, there are many ways of lowering your electricity cost. If you’re moving to a state that has deregulated electricity, then you could cut down on your expenses. If, say, you’re moving to Texas, then you can choose electric rates in Texas that would help you save on your monthly electric bills. Besides getting a lower electric rate, you could also do things like turn off lights when leaving a room, power down all appliances before you retire for the night, and use energy saving light bulbs.
So assuming that you are using exactly the same appliances and your family spends the same number of hours at home, then research the difference in electric rate. Also, see if you have the option to shop for competitive electric rates.
Other things to compare include cooking gas, Internet, Cable, water, and trash disposal.
2. Tax rates.
Your tax rates may be similar or only a slight amount higher or lower. However, if you’re relocating to a state that has no income taxes, then you’re going to come ahead financially. If you actually have a choice on where to relocate for your job, then pick Alaska, Nevada, South Dakota, Texas, Washington, or Wyoming. While Florida doesn’t have personal income taxes, certain business assets may be taxed. Two other good states to move to are New Hampshire and Tennessee, which has no state income taxes on wages but only on dividend and interest income.
3. Housing costs.
Your housing costs will depend on whether you want to buy or rent. Some cities have more affordable homes to purchase and some are friendly to renters.
4. Quality of Life.
Obviously, your neighborhood will have a huge impact on the quality of your life. Even if everything else checks out—cost of living and taxation—you don’t want to move to a neighborhood where there are low quality schools, high crime rates, and a dearth of community options. Besides your neighborhood, your quality of life will be affected by your closeness to family and friends, by what the city offers in terms of shopping centers, places of worship, cultural activities, health clubs, sporting events, parks, and entertainment.
Even if your company is covering all the moving costs and making it as convenient as possible to relocate and even if your career looks more promising, you should evaluate the cost of the move on the overall impact it will have on your finances and quality of life. Moving may be a mistake or it may just be the change you need!