How to Save Money on Moving

The following is a guest post from Tim Johnson, Managing Editor at Relocation.com.

With some American cities starting to resemble a setting from a Dickens novel, more and more people are willing to pull up stakes and move to take a new job, or move to a place with better job opportunities.
 
I faced a similar decision 10 years ago. 

I was unemployed and living in Minnesota, when I got a job offer in New York City.

I had a keen desire to live in New York, but I didn’t have a lot of money. I wouldn’t be renting a truck or shipping my stuff via parcel post, or hiring a moving company.

So I pared down my already meager possessions to fit into two suitcases and a huge backpack, put the rest into storage, and took a bus to the airport.

When I landed in New York, I then took another bus, train and subway to my temporary digs on the Upper East Side. After two buses, a train, a subway, and several curious glances from fellow passengers -- my move was done. 

I learned a lot that day, and I draw on that experience when corresponding with people who are trying to save money on their own relocations.

Although in previous years I would hear from people who were moving to take advantage of a larger house or better school system, today I hear more from people who were in my situation a decade ago: they need to move to start a new job, or to move to an area where they might have better job prospects.

And, of course, like me, they have limited means.

Everyone has to do their own evaluation of whether the reward of moving (a new job, a better job), is worth the risk (spending money on a move and not getting a new job, or living in a new place that you hate).

If you do decide to move, you want to do it cheaply, but smartly. Here are some tips to cut moving costs, and some ways to finance a move if you’re short of cash.

• Pare down your belongings. A good rule of thumb is to get rid of anything that you haven’t used in a year. I don’t even know you, but I can bet you’ll never need or use the following things in your closet: your breadmaker, those college textbooks; that ThighMaster; or your high school letter jacket. Junk 'em.

• Look at alternative ways to move. If you don’t have a lot of stuff to move (and now you shouldn’t, after the tongue-lashing above), check out ‘self-service’ moving companies. You’re in charge of packing up and loading a moving van or a portable storage unit, and someone else will drive it to your new home. It can be a significant savings, and not having to drive is a relief.

• Many people move junky furniture. Consider getting rid of what you have now, and buying new when you get settled in at your new place. You won't have the expense or hassle of moving it, and you can buy stuff that's appropriate for your new place.

• Use short-term or long-term storage. When you get the cash flowing in your new job, pick up your belongings. Storage facilities will often give you a deal if you agree to stay a certain period of time, say a year. Or better yet, inquire about that space in your cousin’s basement – it’s free.

• Airplanes are fee-happy now with checked luggage. Compare the costs of checking luggage vs. shipping it. And if you're near a major train line, check freight costs for shipping.

If you’re really short of funds for your move, consider:

• Put your moving costs on a credit card. I can hear the personal finance purists fainting as I write this, and I would rarely, if ever, advocate the use of credit cards for something you might not be able to pay off immediately. However, if the only thing standing in your way of a new job opportunity is a fear of plastic, give it up. It’s a short-term loan that will be paid back once you have the cash flow.

• Borrow from family and friends. You’re not vacationing in the Bahamas – you’re moving for a new job. You might be surprised how willing people are to help, particularly in this economic climate. For a little extra cash, throw yourself a going-away party – people will definitely chip in to help you on your way.

• If you have an IRA, consider tapping it. More personal finance heresy, but a 10% penalty and more taxable income should not stand in the way of something you feel will truly benefit your life. And you can avoid the tax and penalty if you're able to roll over that cash into a new IRA within 60 days. This is a good option if you need to pony up for a deposit and first month's rent in your new home.

• Some states offer relocation funds for people who are moving for job opportunities. It’s often for people moving in-state, but check with the same office that offers your unemployment benefits.

• If you have a job offer, ask for an advance. But be VERY careful about this – this could be a red flag to an employer, so get a lay of the land before even broaching the issue.

• Remember, your moving expenses are probably tax deductible. That’s not great for your cash flow now, but it should make you feel less guilty about tapping an IRA or charging your moving costs, because you’ll recoup some of that cost eventually.

In many ways, now is a great time to get a start in a new location. The cost of housing has fallen most everywhere, making it easier to get on your feet in a new place. And if prospects are particularly grim where you live, there's little downside to trying out a new city where you've always wanted to live.  

Comments

[Stephanie]

interesting point with the credit card thing. If you are moving for a job than yes this makes sense, if you're not then I dont think it's wise. I love ur blogs though, easy to read and good info!

[LotharBot]

When it comes to the "compensation" part of a job interview, that can be a good time to request relocation money. Don't phrase it as an "advance", just phrase it as part of the total compensation package. A lot of employers expect such things and budget for them.

And, of course, friends and family can often spare some cash to help ease the transition. A few years back, my brother was trying to move his family across the country (reversing a rather foolish move they'd made before) but couldn't get together the cash to do it. I gave him a decently sized Christmas check explicitly marked "for moving expenses", and they moved shortly thereafter. As a grad student, I didn't have a lot of extra income, but getting my brother into a better situation was worth what I did have.

[NYM]

The best thing to do is make sure you are hiring a reputable and trusted mover. So many moving companies out there just want to rip you off. Do some research and find a company with references or a BBB listing, that should help

[Jean]

My suggestion on the actual moving is to look into a POD. They deliver a container to you (various sizes are available), you fill it up, they pick it up, store it and deliver it to you at your new location. I LOVED that I could walk into it at street level-no ramp, no steps! The price was good, too. Not as cheap as DIY, probably, but less than a moving company. Definitely worth checking out.