This post includes affiliate links. If you purchase anything through these affiliated links, 247wallst.com may earn a commission.
24/7 Wall St. Key Takeaways:
- When choosing a new city to move to, consider your lifestyle preferences and financial goals.
- Be sure to consider factors like tax structures and the housing market to accurately predict the real cost of living in a city .
- Also, read " The Next NVIDIA ."
After your income, where you live can have a huge impact on your finances. Some places are simply more expensive than others, which means that more of your income will need to be spent on necessities like housing and food.
One Reddit post I came across recently asked for advice on how to assess where they should move from a financial standpoint. The poster mentioned factors like tax rates, property prices, and living expenses, but was feeling overwhelmed by all the numbers.
Here's my structured approach to making a well-informed decision about where to move. Always consult with financial advisors or tax professionals before making any major financial decisions.
1. Establish Your Priorities
Like our Reddit user, you should start by highlighting your key lifestyle factors. According to the Reddit post, these are:
- Bigger home with a backyard
- Good public schools for future children
- A more affordable cost of living
2. Understand Your Financial Baseline
You also need to consider what you're starting with. The Reddit user and their partner have a high household income of $535K, putting them in a strong financial position. You should also know your current expenses and any expected new expenses (like daycare).
These expenses will help you determine how cheaper or more expensive potential moving locations may be.
3. Research Tax Structures
One of the major challenges raised in the Reddit post was understanding tax rates. These can differ dramatically depending on the state, city, and even specific suburbs. You'll need to consider these three taxes when researching potential moving locations:
- State and local income tax rates
- Property taxes
- Sales tax
4. The Housing Market
If you're planning on buying a home like our Reddit user, considering the cost of housing is essential. You can use online real estate platforms to explore the types of homes within your budget in different cities.
You should pay attention to the housing market's direction, though. If housing prices are rising or sinking rapidly, they may be different by the time you move.
5. Cost of Living Comparison
The cost of living is more than just housing or taxes, though. You also have to consider stuff like food! This can be challenging to figure out unless you visit the area extensively. Luckily, you can use online databases like Numbeo to estimate the cost of living for different areas.
Keep in mind that these are just estimates, though!
6. Consider Long-Term Financial Goals
When you decide to move largely based on financial goals, it's important to keep your long-term goals in mind. A lower cost of living doesn't mean much if you give into the lifestyle creep, for instance. It takes dedication to put the money you're saving into savings or investments.
It's these long-term goals that you should be oriented towards to ensure that the move is really worth it.
Essential Tips for Investing (Sponsored)
A
financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard.
SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get
started now. Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out
online brokerages . They often offer low investment fees, helping you maximize your profit.
Local News
Comments / 0