There are two ways to avoid being broke in life. One is managing what you have with integrity and living below your means.
And the other is clearly…
🎶🎵🎶 Money-money-money-money, MONEY ! 🎵🎶🎵🎶 (If you don’t sing-song this in your head when reading, we are not on the same wavelengths).
When relocating for your livelihood, the salary should play a huge part in the decision making. It’s not the only thing that matters, but if the numbers aren’t right, there is no reason to even consider moving.
Before we can jump into the nitty gritty on determining your salary range, you’re going to need to have an idea of your true current expenses. If you have a budget, get it out now to review the big buckets: Income, Bills and Necessities Expenses, Savings, Slush Fund.
We are not going to talk about cutting expenses or eliminating your fun money in the article. The point is to know exactly what you are spending now and how that will change in the new location.
You’ll also want to consider that when moving to a new city, you’ll want to explore the area, so your “slush” fund should be even higher for a while.
Research and Prepare
If you haven’t already, check out this article about the cost of relocating and this one about determining the cost of living in your new city.
The tips shared will give you the foundation for your research to be sure that when you are negotiating for your new salary, you know exactly what your walk away number needs to be. Here is a summary of what you should be jotting down during your research:
Moving Expenses: If the company isn’t offering a relocation package, what will be your out of pocket expense? Think about
- Temporary housing
- DIY move or professional
- Breaking a lease or deposits on new home
All of these add up quickly and can eat up the initial bump in pay before you know it.
Non-Salary Benefits
- Signing Bonuses: A signing bonus can help offset initial moving expenses.
- Relocation Packages: Some companies offer comprehensive relocation packages that include moving services, temporary housing, and other support. This is ideal, but I have personally not had this option for any of my career moves.
- Flexible Work Arrangements: If the new job offers hybrid or flexible schedules, these benefits can reduce commuting costs and improve work-life balance.
- Cost of living decreases: In the rare instance that you taking the role would mean a major decrease in the cost of living, this should be a big factor in whether you accept the role. In my household, if we were to accept a role in a state that did not have state income tax, without an increase in salary on paper, we would take home 6K more per year… The more you earn, the bigger that number becomes. This makes a major difference in quality of life.
Evaluating the Decision
Deciding whether to relocate for a job requires a comprehensive evaluation of both financial and non-financial factors. To start, let’s review the financial implications.
Create a Budget
If you don’t have a budget ready. Do so now.
We don’t want to know your “ideal” spending, but exactly what you are spending today. Look back over the last 3 months of bank statements and get a range of what you are spending across all the main categories: Housing, utilities, groceries, insurances, car payments and gas, pets, kids, shopping, dining and other entertainment.
Estimate Expenses
For the new location, estimate the main costs for the non-negotiable bills and non-slush fund expenses. I like to do this in an excel sheet where I can compare my existing expenses vs the new estimated expenses
From your research above, you should have a range of what to expect for the cost of the actual move. Jot that down in the same excel sheet. I want to be able to see all the facts at once.
Compare your current salary to what you would need to earn in the new location in order to maintain your existing quality of life. Look at your total take home pay needed, not just the gross income.
At this point you should have a rock bottom salary number needed to relocate to the city and maintain your same financial lifestyle.
But what about the non-financial aspects?
Assess Quality of Life
Consider your personal and family preferences regarding climate, lifestyle, and proximity to family and friends. Also consider the laws and political stances in that state that might be different from where you currently live.
When it comes to Career Advancement, will this move open more opportunities for you within the company or externally? Evaluate the potential for career growth and long term development in the new position.
Discuss With Family
The hardest part of relocating for career growth, personally, has been discussing the potential moves with my spouse. Right now we are in the middle of contemplating moving away from the South East and into the Midwest. We would be even further from all of our family. The conversation is not easy and there are lots of things to consider.
One of the main factors for us is salary, and professional development options. But for you it could be access to grandparents for them to be involved in your kids’ lives, or proximity to the beach for your yearly vacation. Everyone’s conversation will go differently, but make sure you have one despite how uncomfortable it might be.
Seek Professional Advice
Use relocation specialists provided by the employer to assist with logistics and cost management. Typically this will be an option if you are offered a relocation package.
If you are like me though, you won’t have this option. It’s 100% possible to do the research and compile all the needed information to make an informed decision on your own.
Avoid Being Broke After Relocating
Relocating for a job can be a significant life decision with substantial financial implications. By carefully evaluating relocation costs, cost of living adjustments, and salary negotiations, you can make a well-informed decision that aligns with your financial goals and personal aspirations.
To avoid being broke after relocating you need to accept an offer that meets (but hopefully exceeds) your rock bottom salary number.
Preparation and research are the key to ensuring that the move is not only a career advancement but also a financially sound choice.
BK
P.S. Have you ever relocated and ended up in a financially worse situation? Tell me your story!