Money Milestones: How to Budget for Moving to a New Home

Introduction

When you’re trying to buy a new home, it’s easy to get caught up in the details of down payments, mortgages, security deposits, or lease agreements. But after you sign a lease or close on a mortgage, you’ve still got the hard work of moving into your new digs. Getting into your home (and actually affording to live there) involves careful planning and strategic money moves. Here’s how to prepare financially for moving into a new home.

Create a Moving Budget and Start Saving

Create Your Budget

You need to have an idea of how much moving will cost. Ideally, you should start tallying up moving expenses several months ahead, which will give you the opportunity to save up a moving fund. Create your budget by adding up anticipated moving expenses along with well-researched cost estimates. Expenses may include:

• Van rentals
• Hiring movers
• Gas and food
• Lodging if moving a great distance

Be sure to include costs associated with vacating your current home, such as making repairs or renting a storage unit.

“There are obvious moving costs like renting a truck, hiring movers, and travel. However, the easily forgotten costs like packing materials and real estate agent fees should not be forgotten,” said Sahil Vakil, founder and CEO at MYRA Wealth.

Don’t forget the things you’ll need for your home as soon as you move in, including furniture, groceries, and appliances. Remember, you don’t need to fill your home up all at once. Some things like additional furniture, art, and kitchen gadgets can be acquired over time.

Image Description: Illustration showing a sample moving budget with various expenses.

Start Saving

Once you have a budget, you should start saving with the intent of meeting your goal by the time you move. It may help to have a separate savings account specifically for moving purposes (it will also help to add a little cushion for unexpected costs).

Vakil recommends having a separate line item in your monthly budget for setting aside cash for moving. Being able to pay for your moving expenses with cash can help avoid going into debt.

Get Rid of Your Unwanted Stuff

Getting rid of unwanted stuff can make moving easier as you’ll have less cargo to haul to your new home. But if you play your cards right, you can squeeze money out of used items as well.

Sell or Donate Items

• Sell Online: Unload unwanted valuables and furniture for cash via sites like Facebook Marketplace or Craigslist.
• Consignment Stores: Sell your clothes via physical consignment stores or online marketplaces like Thredup and Poshmark.
• Yard Sale: Go old school and have a yard sale.

Local charities may accept donations of gently used items, including clothing and furniture. Some may even come to your house to haul away your unwanted stuff. You can write these donations off on your taxes if you are eligible to itemize your deductions.

Image Description: Infographic showing options for selling or donating unwanted items before moving.

See if Your Employer Will Cover Moving Expenses

Are you moving for your current employer or starting a job with a new employer? Check to see if your employer will cover some or all of your moving expenses. Employer relocation packages can take many forms:

• Lump-Sum Relocation Package: Can be used to pay for moving costs, but any moving expenses that exceed the payout will have to come out of your pocket.
• Dollar-for-Dollar Reimbursement Packages: Can cover packing and moving expenses, short-term storage unit rentals, meals, and travel costs.
• Third-Party Contractors: May be hired by your employer to coordinate moving logistics.

“While your employer may reimburse many relocation costs for you, check into the fine print to see what's actually included. If it's a long trip across the country, they may not include hotel stays and food costs along the way,” said Vakil.

Any relocation benefits you receive are considered taxable income and must be declared in your wages. Members of the military can still exclude reimbursements for qualified moving expenses from their income if they are on active duty, moving in accordance with military orders, and if the expense would qualify as a deduction if the service member didn’t receive a reimbursement.

Image Description: Illustration showing types of employer relocation packages.

Create a Budget for Living in Your New Home

If you don’t already have a monthly budget to track your income and expenses, now is a good time to create one. You can use our simple spreadsheet to create a budget. Make sure to account for rent or mortgage payments, bills and utilities, groceries, savings, and other necessities.

Adjust Existing Budget

If you already have a monthly budget, you should adjust it to account for your new reality. Updating your rent or mortgage payment is obvious, but your bills may also change based on the size of your home, whether you’re signing up for a different internet or cable package, if you will be using well water or city water, and other factors.

Don’t forget the hidden costs of your new home such as homeowners association fees and insurance or property taxes, which can increase every year.

Image Description: Infographic showing how to create and adjust a budget for living in a new home.

Increase Your Emergency Fund

Emergency savings funds can act as safety nets that prevent financial hardship. They can help you get through times of financial struggle like losing your job and help you afford unexpected financial burdens like car repairs or replacing a home appliance.

Building an Emergency Fund

You should be saving up several months’ worth of expenses in your emergency fund, which can help you prepare for unexpected costs of moving into your new home. Even if that seems impossible, you should set some funds aside. Moving is a valid reason to dip into an existing emergency savings fund, but you should work on beefing up your savings ahead of the move to avoid depleting it.

Image Description: Illustration showing steps to build an emergency fund.

Work Out a Financial Agreement with Roommates

Living with roommates? Every tenant should understand their financial obligations. Putting an agreement in place can help you afford your home and avoid disputes. Leases typically don’t outline how to split expenses with roommates, so it’s a good idea to have a written agreement even if it isn’t a formal legal contract.

Financial Agreement Tips

• Reimbursement: Ask your roommates to reimburse you for their fair share of rent and utilities once a month.
• Split Bills: Put certain bills in your name and others in your roommates' names for easier management.

Image Description: Infographic showing tips for creating a financial agreement with roommates.

Get Insurance

You need to protect yourself and your property with insurance. The type you need depends on whether you’re renting or buying your home.

Renters Insurance

Whether you rent a room, an apartment, or an entire house, renters insurance is a good idea. It can cover property damage and losses resulting from a burglary, medical costs due to an accident incurred by a guest in your home, and even the costs of food or lodging if your home becomes unlivable due to certain types of damage. Some landlords require their tenants to have renters insurance.

Homeowners Insurance

Homeowners aren’t legally required to get homeowners insurance, but your mortgage lender may require you to get some level of coverage. Homeowners insurance covers your home and belongings if they are damaged, destroyed, or lost due to burglary or natural disasters and can protect you against certain legal liabilities as well. Some types of disasters, such as floods, may require separate insurance policies.

Even if you pay for your home with cash upfront, homeowners insurance will protect you from future financial disasters.

Image Description: Infographic showing the types and benefits of renters and homeowners insurance.