You’re eyeing a new neighborhood, you’ve gathered all your important documents, you’ve estimated the cost for movers – you’re all ready for your new start. But did you remember to save room in your budget to buy trashcans when you arrive at your new place? How about stocking your new cupboards with pantry basics? Do you have a plan for how you’ll pay your last utility bill?
“There are actually a lot of financial considerations that people don’t think about when they’re planning a move,” shared Gwen Donnelly, Senior Lending Leader for Direct Installment Loans with First Merchants Bank. “And some of those are things you really do not want to be blindsided by as you settle into a new home.
To help you prep for these unexpected scenarios, we’ve compiled a helpful list of five financial responsibilities to consider before you move.
1. Pay Your Bills Now.
Maybe you’re not moving imminently – maybe it’s just a “maybe someday,” or a future dream or goal. Or maybe you’re actively looking for new jobs, hunting for apartments, or browsing properties for sale in your target city.
Regardless of your situation, one of the best ways to prepare for a future move is to pay close attention to your current bills.
“Take special care to pay your bills and to pay them on time,” Gwen explained. “Because by doing that, you can help either establish a record of payment that can be used in lieu of a credit history, or you can help boost your credit score – and that can help you get a better deal on your mortgage or your new home when that comes.”
A better credit score can be linked to lower interest rates, and lower monthly payments on mortgages – or may prevent you from paying a hefty deposit on an apartment or certain utilities.
But paying your bills punctually, every month, can also help you figure out your monthly expenses, which can help you build a strong budget.
“Having that budget can really come in handy when you move – because it can really let you estimate what you can afford when you move to a new place,” Gwen shared.
2. Research Your Cost of Living.
While you may have your budget finetuned to your current place of residence, have you considered how it might change once you move? Estimating the cost of living in your new town or city is an important step to having a solid financial foundation once you move. And, while cost-of-living estimators often compare things like rent and certain utilities, Gwen cautions that there are often categories many fail to consider.
“For example, if you’re going urban to metro – how is your transportation going to change?” Gwen said. “Will you need a more efficient vehicle? Will you be relying on public transportation? If you currently have more than one car, will you need to sell one?”
And a cost-of-living estimator may compare the cost of utilities, but does it take into account how things change seasonally?
“I like to share my own personal experience when this topic comes up with clients,” Gwen said. “Not too long ago, I moved from Columbus, Ohio to rural Indiana. In Columbus, my utility payments – heat, electricity, etc. – didn’t have a lot of variation from summer to winter. But when I moved, my new house was heated by propane, which meant that my utility bills in winter were much higher than they had been back in Columbus. This is something I really recommend that people think about when they move – because it can be a big hit to your budget if you haven’t prepared for it.”
3. Budget for the little things.
When it comes time to move, you’ve probably budgeted for big purchases like renting a truck, hiring a moving company, or purchasing furniture – but have you thought about the little things?
“When you make a big move, it’s not just about the four walls – it’s about all the things that go with those four walls that really make a house a home,” Gwen said.
“For example, do you have in your budget that you’ll probably end up spending $40 on trash cans if you’re like me and need one for every room,” she added with a laugh. “Those things are impactful.”
And, if you have budgeted for them – have you divided up how you’ll pay for them?
“Are you planning to save up for some of those purchases?” Gwen explained. “Have you decided if you’ll be saving money ahead of time for a lawn mower, or is that a purchase that would go on a credit card? These are important considerations to try and hash out ahead of time, so you don’t find yourself scrambling at the last minute.”
Build a budget with our budget calculator!
4. Consolidate your debts.
A lot of people consolidate their possessions before a move – choosing what to keep and back and what to donate or sell – but have you done the same thing with your debts?
“Prior to moving, I would recommend you think about what debts you want to consolidate so that you aren’t taking those with you to the new location,” Gwen advised. “Items like unpaid doctor’s bills, outstanding phone bills, and even parking tickets. Those are all examples of loose ends you might want to tie up so that your past isn’t moving cross country with you.”
There’s nothing worse, she added, than an unexpected collections notice popping up in your mailbox or on your credit report. Especially since those could prevent you from securing a mortgage or a new apartment or could result in hefty security deposits for utilities.
5. Tap into Your Equity
Once you’ve made the move and have started to settle in, it might be worth it to tap into your home’s equity through a home equity loan or home equity line of credit.
“Your mortgage gets you physically into your house – but these are things that will give you that cash or credit on hand to tackle any repairs that you might need to make, or to make those home improvements that really make your house a home,” Gwen explained. “They can also provide that safety net if your water heater breaks unexpectedly, or a storm hits just after you’ve moved in, and you need to repair your roof!”
First Merchants Home Equity Loan Calculator | First Merchants HELOC Calculator
Don’t Forget Your Local Bank!
As you’re enjoying this new chapter of your life, don’t forget your old local bank!
“Just because you’re moving away doesn’t mean you have to leave us,” Gwen said. “When you move you may feel you have to change all your financial services – but that’s not true. With online and mobile banking, it’s really possible to keep banking with us, even if you now live outside our service area.”
“And, of course, if you move into our service area, we’d love to see you at one of our welcoming local banking centers,” she added.
