Chicago Sun-Times

IS IT TIME TO MOVE?

The costs and ben­e­fits of choos­ing a new home dur­ing the pan­demic

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You may not have started 2020 think­ing about a move.

But like it or not, many of us have had to re­con­sider our liv­ing sit­u­a­tions dur­ing the pan­demic.

Maybe you’re one of the lucky ones who can work re­motely, or maybe you’re out of a job like mil­lions of oth­ers. You may be won­der­ing whether liv­ing where you are is re­ally worth it any­more.

Be­fore you de­cide to re­lo­cate, you have many things to con­sider: the cost of liv­ing, prox­im­ity to your loved ones — and whether you’ll need a win­ter coat.

Here’s how to go about mak­ing the de­ci­sion to move.

Fig­ure out your priorities

For some, mov­ing is the ob­vi­ous choice, whether “home” is the town you grew up in or where your fam­ily lives now. For oth­ers, it can be hard to zero in on a par­tic­u­lar place, es­pe­cially if your loved ones are scat­tered all over the coun­try or world.

Take the pres­sure out of the de­ci­sion — this move doesn’t have to be your last.

“Many peo­ple de­lay re­lo­cat­ing, even if it’s the right move to make, be­cause we can get stuck think­ing that it’s a permanent move,” says Phuong Luong, a cer­ti­fied fi­nan­cial plan­ner at Just Wealth in San Fran­cisco.

She sug­gests nar­row­ing your fo­cus to the year ahead and re­flect­ing on your priorities.

“What’s miss­ing where I am now? Is there any­thing I’ll miss about where I’m liv­ing now? Make a list of your re­sponses, be­cause this can help nar­row down your priorities that you’ll want your next lo­ca­tion to meet,” says Luong.

Don’t rush into homeowners­hip

His­tor­i­cally low mort­gage rates may tempt you to move so you can buy your dream home.

Mov­ing to a cheaper lo­ca­tion to buy a home can be a smart choice, but don’t rush into homeowners­hip if your fi­nances aren’t ready, cau­tions Elaina Jo­han­nessen, pro­gram direc­tor at Min­nesota non­profit credit coun­selor LSS Fi­nan­cial Coun­sel­ing.

A bud­get will help you fig­ure out what you can re­al­is­ti­cally pay for hous­ing and is bet­ter than lis­ten­ing to what a lender says you can pay, she says.

“If you can af­ford your pay­ment but you don’t have any­thing left over, it might not be the right thing to do,” Jo­han­nessen says.

Your bud­get ac­counts for ne­ces­si­ties like hous­ing pay­ments, gro­ceries and in­sur­ance; fac­tors in dis­cre­tionary ex­penses like ca­ble or or­der­ing take­out; and leaves room for sav­ings and debt re­pay­ment. (The 50/30/20 bud­get, which divvies up spend­ing into those three buck­ets, can help you get started.)

Don’t as­sume your salary will stay the same if your em­ployer al­lows you to re­lo­cate, says Lazetta Rainey Brax­ton, a cer­ti­fied fi­nan­cial plan­ner and co-CEO at 2050 Wealth Part­ners, a vir­tual fi­nan­cial plan­ning firm. You may find your pay ad­justed down if you move from an ex­pen­sive area to a cheaper one. Check with your em­ployer be­fore mak­ing plans.

Even if your em­ployer lets you re­lo­cate now, some com­pa­nies aren’t sure what their plans are af­ter the pan­demic is over, says Rainey Brax­ton. Have a con­ver­sa­tion with your em­ployer to know whether you’d be ex­pected to move back even­tu­ally and if you’d have to pay for mov­ing costs in that sit­u­a­tion, she says.

Factor in other costs

Mov­ing isn’t cheap. Use your bud­get to fig­ure out if you have the funds to get to a new place with­out pil­ing up too much debt.

And have a plan to build back your sav­ings once you move.

Ideally, you want to keep monthly hous­ing costs in your new lo­ca­tion be­low 28% of your gross in­come, leav­ing you enough room in your bud­get to build up sav­ings. An emer­gency fund of even $500, if you can af­ford it, will help you deal with sur­prise ex­penses and keep you from ac­cru­ing more debt.

Also, be pre­pared to ad­just your bud­get to ac­count for your new fi­nan­cial sit­u­a­tion.

You may be able to save on travel and child care costs if you move closer to fam­ily and friends. But you may also have new ex­penses, such as buy­ing and in­sur­ing a car rather than us­ing tran­sit, says Luong.

Mov­ing to a dif­fer­ent state af­fects other costs, such as how much you pay in taxes and your ac­cess to health in­sur­ance op­tions. You can use a cost of liv­ing cal­cu­la­tor to get a sense of costs in the new lo­ca­tion be­fore you pack your bags.

Long-term job se­cu­rity is also a factor in plan­ning a move or buy­ing a home. You can’t pre­dict the fu­ture, but do have a backup plan if you move to a city with fewer job prospects, Jo­han­nessen ad­vises. Ask your­self what other jobs you could find in the new lo­ca­tion if you were to lose your job af­ter mov­ing, she says.

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