Here are some financial points to keep in mind after accepting a relocation assignment
With any job offer, one of the most important factors, if not the most important, is the salary. The number one reason employees seek a new position is to increase their pay. But what if you have to accept a relocation assignment in order to make that leap in the pay range? It is common for employees to consider moving to get a higher salary, better promotion, or a more enjoyable work environment.
Whatever the reason, relocating for a job from a new company (or promotion from your current company), there is no doubt that finances will be top of mind. The first thing that must be kept in mind is that moving can be expensive if the company does not offer corporate relocation assistance. When interviewing for a position in a different state or country, be sure to get crystal clear explanations of what type of global mobility benefits are provided.
But even after making the move official, there will still be money management skills that should be practiced. Here are a few financial tips when considering the relocation costs for a domestic move or an international assignment.
Do Thorough Research on the Cost of Living
The adjusted cost of living is the most obvious factor in accepting or rejecting a job in a new location. Before taking a giant leap, you’ll want to research some ordinary living expenses in the new city, such as rent/home prices, cars, gas, utilities, childcare, and other everyday expenses. If you are working with a relocation management company (RMC) to assist you in your move, it will be worth asking if they can provide a cost-of-living calculator.
Plugging some numbers into a relocation technology tool can help you understand how much money you’ll have to make and spend in your new destination. Once you have a clear picture, you can begin navigating your finances into a monthly budget that assures you’ll be stable in your new home.
Finding a Budgeting Style
In preparation for relocating, it is recommended to have a budgeting technique and do your best to stick to it. Setting a budget within your new cost of living allows you to see the scope of your finances to their extent.
Popular Budgeting styles and techniques:
- Envelope method. Categorize envelopes for different expenses (e.g., rent/mortgage, groceries, gas, travel). Allocate money from paychecks to each. This method aids in monitoring spending and encourages mindful spending behavior.
- 50/30/20. Divide your paycheck into three parts: necessary costs (50%), leisure and pleasure (30%), and savings/debt repayment (20%). Adjust the percentages as needed; if you have more debts, increase the amount allocated to that category. This system is customizable and can be tailored to your individual needs.
- Zero-based Budgeting. Budgeting using zero-based systems divides your income into more minor, less expensive expenses. Record your income, then list the categories you need to spend each month. Estimate how much you will need to pay for each type until your total is zero. This way, you can be sure that every dollar will go somewhere, like your savings, rent, or groceries.
- The Pay-Your-Self-first Budget. A great way to put money aside to pay down debt and build your savings. Once you’ve paid off your debts, you can use the rest for anything.
GMS Can Provide Cost of Living Analysis
As stated above, it is always a good idea to get a scope on the cost of living for the desired state or city you are looking to move to. Global Mobility Solutions (GMS) is proud to call itself the leader in the relocation industry regarding technology. We are the pioneers of relocation technology.
Our cost of living calculators can get you to point in the right direction from the start. From there, you can decide whether the relocation process suits you for this particular job. Our calculators are constantly updated and tested to ensure realistic answers. Please contact us today if you want more information on receiving a cost of living analysis for a new city. And always be sure to check our Knowledge base, where we post blogs about countless relocation topics.
Our cloud-based MyRelocation® relocation technology is designed to help you streamline your company’s relocation management. Schedule a demo with a Mobility Pro for a no-pressure look at how our technology can help you.