Along with determining if a corporate relocation is right for your family, you also need to consider the cost of living in the new city. Forgetting to analyze this factor could create financial problems in the future. With that in mind, here are a few things to contemplate before agreeing to a corporate relocation:
If you're moving to an area with high housing prices, it could be difficult to find a place that's affordable. Compare how much you'd have to pay for rent or a mortgage with what you're currently paying each month. If the cost is a lot higher, do you make enough money to cover the extra expense? Determining the price of your house or apartment in advance will save you from any nasty surprises.
Taxes vary from state to state, but you'd be surprised how the percentage can impact your income. It's particularly striking if you were previously living in a state with no income tax. The amount taken out of your paychecks could put a strain on your finances if you're not careful. You should also look at the state's sales tax. A high charge on shopping purchases could also reduce the amount of money you have to spend each month. On the other hand, the state you're moving to may have a lower income and sales tax than your current state, which would be beneficial.
"Public transportation may cost more in a new city."
Another aspect to factor into your cost of living is your new commute. In your current city, you might only have to pay $100 a month for your train or bus ticket, but public transportation prices may be a lot higher in the new city. With the additional cost in mind, you either need to determine if you can afford a higher commute or find a place to live that's relatively close to your office.
Even if you can afford the extra costs associated with a new city, you should figure how much money you'll have left over. Are you and your family trying to save for anything? If so, make sure you'll still be able to set aside a portion of your income each month. Meticulously determining how much of your pay you'll have left at the end of each month will make managing your finances in the new city a lot less stressful.
Negotiating relocation reimbursement
The move itself is another aspect of corporate relocation that can put a dent in your finances. This is why you should negotiate a relocation package if you're thinking about taking the offer. According to the 2015 Atlas Corporate Relocation Survey, 66 percent of businesses fully reimbursed employee relocation expenses, so it's worth discussing with your company.
If you figure the costs and realize living in the new city will exceed your current budget, you're more likely to gain a relocation package deal than you are to receive a raise for your move. An increased salary would be much more expensive for your company in the long run.