Relocation Checklist

Moving to a new state can be filled with so much excitement, and also an enormous amount of stress and uncertainty. Before you make this big jump, consider all the implications of making a move and plan for each one. So, what financial matters should you keep in mind before packing up and moving?

Cost of Living

Before making a big move, its important to consider the differences in cost of living from your current state or city relative to your new one. Everything between housing costs, groceries, healthcare, and insurance should be considered when evaluating a realistic standard of living and lifestyle. Online calculators, like this one from Nerd Wallet, are useful for identifying the expected cost differences.

For example, transportation expenses are often overlooked when evaluating costs. Not only should you research the cost of gas and public transit, but you should also consider the difference in walkability. For example, your cost for transportation if you live in San Francisco may be low if you mainly walk (even though gas is relatively more expensive here) but you might spend more if you live in an area with lower cost of living that isn’t as walkable.  

Income Tax

Cost of living isn’t the only consideration when thinking about your budget in a new state. You should also consider the state tax (and local tax) for the state you will be living in.

Another planning item to address is if you are staying with the same company but move to a new state is to update your W-4 (or speak to your HR department about updating your address). Depending on the two states you are moving between, you may underpay if your new residence’s state tax is higher or vice versa.

Estate Plan

If you already have estate documents in place before moving to a new state, you may want to visit an estate attorney and have them review your current plan. Many estate documents, such as wills and trusts, are written based on the laws in the state in which you live. As it relates to Powers of Attorney for healthcare and property, if these documents are requested by a financial institution or medical practice, delays can occur as the organization may be required to review them from a more scrutinizing lens.

Community property is another area of consideration if you are moving into or out of one of the nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) that observe community property rules. For these nine states, property and assets accumulated during a marriage are deemed to belong to both partners, regardless of the person who purchased them. Examples of community property include wages earned during the marriage and property purchased by either spouse with money earned during the marriage. Inheritance and gifts given to only one spouse and assets acquired before marriage are considered excluded from community property. In contrast, common law states (the remaining states) consider property and wages to be separate if they were purchased/earned by only one of the spouses (unless they title the property jointly).

If you are moving from a community property state to a common law state, assets and wages acquired prior to the move will be considered community property and anything earned or purchased after the move to a common law state is considered separate. The opposite is applied when you move from a common law state to a community property state.

Other Logistical Considerations

Insurance Coverage

While purchasing a new homeowners insurance policy will most likely be an obvious consideration, policies like car insurance might not be top of mind – but they should be! Insurance policies are priced based on a number of factors, including where you live. In addition to the cost of premiums, each state has different minimum auto insurance limits that must be obeyed. You typically have between 30 and 90 days (depending on the insurance company) to update your policy before your coverage potentially becoming void.

Moving Costs

Moving between states, especially if you’re moving across the country, can become costly. Things like hiring a moving company and travel expenses can add up quickly! Additionally, if you are planning on buying a home in your new state, but haven’t purchased one yet, the costs of renting short-term should be added to the budget.

After taking the time to plan and reflect on all the considerations here, and the numerous others, create a budget and establish a plan for taking your new city by storm. And if you need help crafting that plan, the Yeske Buie Team is available to support you in that process!