You’ve been offered a fantastic new job with the company of your dreams—and, on top of that, it’s thousands of miles away. Along with the excitement and anticipation that comes from uprooting your life and starting over, you’ve got to think about how this will affect you financially.
Should you accept the position, you’ll need to make some major financial decisions and changes. So you can breathe easy while working on the other aspects of the move that will keep you busy—like packing away your whole kitchen into a few boxes—try these four money moves to help you avoid any financial bumps on your road to relocation.
Step 1: Clean up your old finances (so you can start over fresh)
Restructuring your budget to pay off debt as you plan for new expenses can decrease stress and improve your overall financial health. If you haven’t gotten around to refinancing your student loans, for example, do so before the big move to lock in a lower interest rate. If you took out a federal direct subsidized loan in 2006-2007, for example, the avermorage interest rate was 6.8%. Today’s students are signing these loans at almost half that rate. The government won’t reduce the rates of those loans—even if you consolidate them there—but by refinancing them with a private lender, you can get today’s competitive interest rates and perhaps even a shorter loan term.
If paying off high-interest credit card debt is a problem, apply for a credit card consolidation loan before hitting the road. Flexibility is important, especially if your move means adjusting to a higher cost of living.
Step 2: Set your moving budget
Moving across the U.S. can be pricey—moving calculators estimate the cost of packing and moving a four-bedroom home from New York City to Los Angeles to be at least $13,000.
To prepare for the trek, find out what, if any, relocation assistance your new employer offers. A relocation package could cover everything from packing and moving expenses to the cost of pre-move visits and temporary housing. Although fewer employers reimburse new hires for relocating today, you might be surprised by how much some companies cover. As a result of its 2016 survey of relocation professionals, Atlas Van Lines found that 36% of companies fully reimburse relocation expenses of new hires, while 38% partially reimburse, and 45% give a lump sum.
Negotiating for relocation costs can be intimidating, even for the most confident employee. So to maximize your savings while minimizing your discomfort, seek out a career strategy expert who can walk you through salary, benefit, and relocation package negotiations before you officially accept the job offer.
If your employer doesn’t provide relocation assistance, consider a relocation loan to help you get through the transition. With a set amount of cash on hand to cover your expenses, you can stress less about costs and focus more on getting your new home together.
Step 3: Do your mortgage-shopping homework before picking out your new home
Start by assessing your savings and investment accounts, checking your credit report, and verifying the estimated resale value of your current home, if applicable. Also, gather your tax returns from the last two years, recent bank statements, and your last two pay stubs. That information will help you and your mortgage lender map out a game plan, including your ideal down payment, mortgage type, and price range.
Then, when choosing a mortgage loan, look beyond lenders with the lowest interest rate. Additional factors to consider include qualifications, lock-in periods, fees, and the lender’s track record. Mortgages are not one-size-fits-all, and your life will change with a new job, so err on the side of versatility and look for a trusted, stable lender. This way, when you get into your new home, you’ll be much more settled on the financial side of things. (Well, at least from a mortgage standpoint—you’ll still have to decide if you want to ship all your furniture or ditch some in favor of getting new furnishings on the other side.)
Step 4: Gear up for a whole new financial world
Your new company may offer short- and long-term investment opportunities. When negotiating your compensation package, remember that non-salary compensation is incredibly important. In fact, most benefits and investment options add roughly 30% to the package value.
In addition to traditional medical benefits, wellness programs, and perks, some companies offer matching contributions to a 401(k) retirement account. Consider your age, health, and life goals when determining fund aggression and risk.
Some organizations also offer employees discounted share prices for stock in the company, or an opportunity to buy stock at a retroactive rate. If the company is consistently innovative and you see their potential for growth, consider buying some stock, but be careful not to invest all your money in one place. Diversifying your investments is a smart way to protect your profits moving forward, whether you stay with your new gig for a year or a decade.
After relocating, your new job and social landscape will demand much of your attention. So take time now to clean up old debts, shop smart for a mortgage, negotiate for the best relocation and compensation package, and plan your investments. Before you know it, you’ll be focused on enjoying your new job and city—without the background noise of financial stress.