Packing your bags and relocating to a new city can be an exciting adventure. But if you’re headed somewhere with a steeper cost of living, it can also put a serious dent in your checking account. There’s plenty you can do to prepare your finances for the big move, though, such as adjusting your budget as soon as you’ve made the decision to skip town. Here’s a look at where to get started.
Ramp up savings before moving
Start bolstering your savings as soon as you’ve made up your mind about moving. Try to figure out how much more you might be spending on essentials like rent and groceries in your new location. This will help you determine how much cash you’ll need to save for immediate expenses once you move. Your new apartment’s security deposit, for example, may equal one month’s rent. Factor in moving costs as well, and consider getting quotes from movers to get an accurate estimate.
Find a roommate
Try to find a roommate to cut down on housing costs. This will be especially important for people heading to cities with astronomically expensive rental markets, such as New York or San Francisco. When looking for new digs, try your best to spend no more than 30% to 35% of your pre-tax monthly income on rent. If you need to go over that figure — and you very well might if you’re headed to a large city — cut back on other nonessential expenses, like eating out and shopping trips.
Save money whenever possible
As you’re settling in to your new hometown, take advantage of deals and discounts whenever possible. If you use public transportation, consider getting a monthly or annual pass. Pack a lunch instead of going out, and brew your own coffee. Ask yourself whether you really need a gym membership, or whether walks or jogs around your new neighborhood would suffice. These kinds of money moves may not sound like much, but they may help you keep things affordable.
The bottom line
Moving to a new city may require quite a few adjustments. Of those changes, reconfiguring your budget may be one of the most important. That doesn’t mean that it has to be the most difficult, though.
Saving up in the months leading up to your relocation, finding a roommate and cutting back on unnecessary expenses wherever possible are great places to get started. You’ll be able to kick back and enjoy the change of scenery in no time.
Produced by NerdWallet