Moving is a mammoth task. When you consider moving from one place to another, you will realize that there are several decisions which need to be made and several aspects that need to be considered. What you should be primarily asking yourself is, how are you planning to finance your move? After all, moving can be quite expensive.
We’re not denying that money management can become more overwhelming when you decide to move to a new house. There are several variables that have to be considered while planning your finances for moving. So here’s all you need to know about how to finance your move and some of the hidden costs of moving we often tend to overlook.
Things To Keep In Mind When Financing Your Move
Whether you move within the state or out of the state, you can expect the move to cost you anywhere between $2,000 to $4,700, depending on the distance and bulk of your move. At the same time, cross country moves can stretch well beyond $20,000 if you have many belongings and you’re moving with your family.
Your basic expenditure includes having to hire professional movers, paying for expensive moving equipment and buying the essential insurance policies. Unfortunately for your bank account though, that’s not all. So before you start thinking about how to finance your move, you need to think about all your expenditures.
1) Packaging supplies
If you are moving by yourself, you will be the one packing all your stuff. You probably might just fail to account for the cost of all the packaging supplies. It is important that you buy good quality packaging supplies in order to prevent bigger financial losses caused due to damaged expensive objects.
2) Extra Charges For Heavy Items
A moving company will most probably cover all the basic items like furniture or cupboards in its moving charges. However, if you own some very heavy and bulky items like an ATV or a grand piano, it is possible that the company will charge you extra. This happens because the company has to send some special equipment and bigger trucks to pick up and load your possessions.
3) Conditions Of The home
Do you live in an apartment on the 10th floor or are you planning to move into an apartment which is in a high-rise building? If this is the case, you can expect to be charged with extra elevator fees which range from $50 to $100, depending on the movers. The company will most probably charge you extra for navigating the staircases and the elevators.
4) Storage units
It sometimes happens that there is a major delay in the schedule and your new house isn’t ready for you to move your stuff into it. In this scenario, you might have to rent a storage unit to temporarily store your stuff. A storage unit might cost you about $80 to $150 per month.
You have to remember that companies do not include the fuel charges in the estimates. Generally, prices of fuel tend to be different at different fuel stations. Consequently, the movers add the costs of fuel once the move is completed. Make sure that you enquire about the fuel costs before assuming that the amount given in the estimate is the final amount that you have to pay.
6) Unnecessary Parking Tickets
Most of the time, movers will park the truck in the close proximity of your house. The reason is simply to make the process of loading and unloading easier. Moreover, if the truck halts in a street which is a no parking zone, you would have to be the one paying the parking ticket.
7) Damage of Items
Even though good moving companies have a tendency to give insurance for expensive items, the insurance might be very minimal in nature. So unsurprisingly, it’s upon you to ensure that you purchase some additional insurance, or else you might end up with a huge financial loss if your expensive items are damaged or lost.
You can’t forget about the special requirements of your small buddies. Before you transport the little furry and feathered friends to the new place, you have to make several visits to the vet beforehand and get all the necessary vaccinations. Moreover, sometimes you will need a boarding kennel while you move them to a new place, which again might cost you a little bit of extra money.
9) Hotel Stays
You can’t assume that you can sleep comfortably in the mess that is your new house, even if you have moved all your belongings there. On the day of the arrival, you would probably just want to book a room for the night in a hotel, as you might want to unwind after a long tiring day of moving.
10) Con Artists
If you don’t research well, you might hire a moving company which is out there to scam you. This company might pick up your possessions and drive off with them. Some might not steal the entire lot of items, but might just hold your things hostage till you pay a large sum of money. There are no limits to the ways in which you can get scammed, nevertheless you must be cautious at all times.
Getting Assistance To Finance Your Move
Once you get the estimates from the moving companies and figure out the other surplus charges of moving, you can go ahead and determine the rough cost of your move. Once you have that in your mind, you can evaluate ways to generate finance for your move. So let’s now get into the thick of things about the easiest ways to generate finance for your move. We will first address a question which most people understandably have.
Can you get a relocation loan?
We can’t all always get the longer end of the stick. As much as we would like to, saving money for a move is easier said than done. If you can’t manage to save as much but are someone who has a good credit score, applying for a personal loan is certainly a possibility. Given your specific situation, it could be the best option too.
The interest rates charged on these loans are drastically lower as compared to interest rates applied on credit cards. Again, you should be able to commit to making timely payments to the bank and you are good to go! The maximum amount of money that you can borrow and the interest rates charged on that differs from lender to lender.
Let’s not forget, your credit score will play a huge deal in helping you get a loan for the amount you desire. The best way to fund your move would be to check with the credit union or the banks that you deal with on a daily basis. Funding your move via these institutions just might cost you a much lesser amount, as you have a professional history with them.
For instance, if you are a regular customer of the bank and share a well-established connection with its employees, it is likely that they will give you a loan with a discounted rate of interest. It is always best to realize how valuable these personal connections are and how they will help you out when you are in dire need.
Use Credit Cards For Transactions
If you do not have enough money to finance your move at the moment, there’s no reason to worry! In this case you can always use a credit card. A credit card would allow you to borrow money from the bank and let you spend it on things that you need. You can pay for your move regardless of your account balance. However, you will have to pay this money back to the bank in a stipulated period of time, or else the bank would start charging you interest on the borrowed amount.
Before you use a credit to pay for your move, check up on the interest rates that are being charged on that particular card. It would be counterintuitive to use cards that have a high interest rate, as the move will then cost you much more than your original estimate. Your expenditure could end up exceeding your original estimate by more than hundreds of dollars, which of course is not something you would want.
However, credit cards can still be used for your own benefit. Enquire with your bank about whether you can apply for a credit card that gives 0% promotional rate. With this, you can successfully avoid interest payments and you will be able to fund your move interest free. Nonetheless, it’s important to keep in mind that if you do not pay off the card before that promotional period expires, the interest rates will shoot up and the deal won’t be beneficial.
Some cards apply the interest rates to the entire initial balance even though you might have just a few dollars left to pay off. This is called deferred interest. For instance, if the promotional period is for 15 months and you spend $3,000, you will have to repay $200 per month for a duration of 15 months in order to clear your debt. If you fail to do so, you will be charged with interest. Timely payments are key to enjoy the benefits of this scheme.
Overall, using credit cards can be a great option especially if you don’t have enough money at the moment, but can very easily pay off the debt in the long term. Moreover, credit cards are also the only available alternative for you when you don’t have a good credit score. Timely payment of the credit bills would also help you to improve your credit score and help you avail loans the next time you need money urgently.
Liquidation of Assets: Physical and Financial
Generally, each one of us has some kinds of assets that we have accumulated over a long period of time, be it physical or financial. Let us discuss physical assets first. If you look around in your house, you will realize that there are a lot of things that you don’t need. These things can generate finance when you need to make some urgent expenditures; for instance – financing your move. Your first task would be: make a list of things you don’t need.
Some of these items could be the things that you used, but don’t need to use anymore. For example – toys. Others could be the luxury items that you bought when you succumbed to consumerism for a moment. These could be things like elaborate dinner sets, expensive gadgets, fancy sheets, etc. You can then hold a garage sale/yard sale where you thrift these things off in your neighborhood. Make sure you publicize the event enough so that people actually show up on the day of the sale.
Now coming to your financial assets. Again, make a list of all the financial assets that you can convert instantly into cash. It is the best way to pay and liquidating financial assets is the best way to generate cash. Your financial assets may include real estate which has no future benefits, investments in stocks and mutual funds, insurance policies you bought to save taxes, provident funds and bonds, among others.
Select assets to liquidate on the basis of the amount of money you need to generate and the level of importance each asset has in your life. Try avoiding the usage of funds from your retirement accounts and any other securities (mainly long term) if they penalize you for financially liquidating them. Weigh the long term pros and cons of each financial asset before you go ahead and liquidate them.
Sometimes, you might want to move across cities or even countries for professional reasons. It could very well be an employee transfer due to promotion or some other reason. For that matter, it could also be because you finally got your dream job in a different place. Keep in mind that your employer can be asked to cover a portion of your moving bill.
There are times when employers desperately want certain employees to start working in the new place immediately. So given their urgent requirements, they are mostly willing to cover your entire cost of moving. If by any chance your employer is apprehensive about financing your move, don’t worry! You can always try to negotiate a job relocation package with them.
For instance, you can promise to forgo a week of paid leave in exchange for the company covering the costs. There sure are companies that voluntarily provide job relocation packages. But even if the employer isn’t happy about financing the whole process, figure out and try to get him/her to cover at least a sizable chunk of it, if only to make your life easier.
Other Ways To Finance Your Move
If you are anticipating a big move in the near future, the smartest way to generate finance would be to start saving up. Apply for a new savings account if you don’t have one already. This process is absolutely easy and can be done over the phone or in person at the bank. It would be ideal if you find an account which charges low fees and has high interest rates.
You simply have to submit the application for the account once you figure out what kind of savings account is perfect for you. While opening a new account, you will need your social security number, proof for identification and proof for citizenship/residency. You can start depositing your money in the savings account as soon as the bank activates the account.
A word of advice though – make sure that you use your savings only when it’s necessary, ideally when you want to move. A few banks charge you a transaction fee if you withdraw or transfer your money multiple times. Remember this and avoid paying this fee by settling the moving bill once and for all towards the end of the move.
Saving up a substantial amount of money takes time. Therefore, it would be wise to anticipate the move and start saving up early. Saving up your money beforehand is a responsible choice which can save you from going into debt and eventually paying a higher amount of money in the years to come.
See also: How Much Does it Cost to Move
Cash Is A Savior
Generally, most of the people spend a huge chunk of their life repaying debts; be it student loans, credit cards, housing loans or car loans. If you can anticipate the move well in advance and set aside a bundle of cash for it, you can avoid going into unnecessary debts. This is especially applicable for short distance and light weight moves.
There is no denying the fact that financing your move entirely with cash will require meticulous financial planning. You will have to set aside some amount of cash every month for this. You might also have to save up by leading a minimalist lifestyle for a few months. However, you will realize that a few months of planning and careful execution will help you settle your bill once and for all. The feeling of relief experienced once you know that there are no more pending payments to be made, will definitely make your move stress free.
Moreover, some movers tend to have some discount offers for clients who prefer paying in cash. While these discounts aren’t usually very big, every saved penny counts!
Reduce your Own Costs
While planning a move, examine your spending needs. Think about ways in which you could cut costs in various scenarios. If it is a small distance and lightweight move, see if there’s an opportunity to DIY the move and carry out the entire process by yourself. If possible, get some helping hands. Invite some friends or family members over to help you out and together you can figure out the entire move.
If it’s a long-distance move, maybe you could save up money by packaging your things carefully by yourself (or with the help from your social circle). In this way you would just have to pay for the rental truck and the movers who would be driving the truck. Unless you or your entourage has enough experience or skill in packing fragile items, it is best to let that task be left to experts.
Look around in your house and identify things that you don’t actually need in your new home. You could either donate these items to a charity so as to reduce the bulk of your move. Conduct your own research and compare the quotes and the quality of work offered by different movers. Go with the company that costs you the least and serves you the best.
There is no one correct way of financing a move. Some options are bound to suit you better. There is no hard and fast rule that you have to stick to only one way of generating finance. At the end of the day, you get to decide whether you are going to use one single way or a combination of the above-mentioned methods to finance your move. It is best to weigh your options correctly and then decide how to finance your move.