Moving can be rather expensive, so moving on a low income budget can really squeeze your purse strings. There are multiple ways to save money and even spend none at all during your move. Don't stress about spending your hard-earned cash. With some helpful tips, your move will be cheap and comfortable.
And while preparing your budget is important, you should also first understand the financial logistics of moving.
Use money saving tips when moving on a low income budget
As you consider moving, you will eventually need to create a moving budget. This budget will include information about the financial needs of your current home, costs associated with moving and expenses that you incur after moving into your new home. The first step in any budget should be creating realistic goals and engaging money-saving habits. Organize expenses in a workable budget where 10 to 15 percent of your income is left at the end of the month for your savings account.
- Don't buying packing supplies. Free boxes are available. You can also save used newspapers to wrap fragile items instead of buying bubble wrap. If you use old boxes, however, reinforce the bottom with duct tape to make them sturdier.
- Move during the off-season. From fall through winter, moving companies do not charge as much, because families with children prefer to move between school years. Low income households can move on a weekday (Monday-Thursday) for more savings. Movers charge less during for mid-week jobs, because customers do not like to take off work to move on these days.
- Donate and sell unwanted items. Before packing, split your belongings into two piles -- wanted and unwanted. If the items are worth something, sell them. If not, donate them. Selling your items is a great way to put some extra cash in your pockets while donating will save money by decreasing the weight of your move. You can write off any donations on your tax returns as long as you get a receipt from the charity.
Compare all options to find movers that match your budget
Run the numbers! Hiring a professional moving company might be a strain on your wallet, but you won't know until you get quotes. Although in-home estimates are the most accurate, a quick over-the-phone estimate can give you a general idea what it will cost. Don't forget to compare at least three companies to make an informed decision.
Check for flat rate movers in your area. If a moving company does not offer a binding estimate, the price can change considerably, but a flat rate mover provides an all-inclusive price which is guaranteed -- regardless of bumps along the way.
TIP: A binding estimate is fixed and remains that way no matter what changes occur during the course of the move.
Ask the moving company about income-based discounts, such as reduced rates for:
- College students
- Active duty military and veterans
- Senior citizens
- Special needs
- Charity cases
TIP: Don't be afraid to ask. They might have a seasonal promotion or coupon if they don't offer discounts.
If you cannot afford a full-service move, you still have several options.
- Rent a truck. You can hire moving labor or load it yourself. Optionally, laborers will drive it for you.
- For a totally DIY move, employ friends and family to pack and use their personal vehicles.
- Ask someone else who is moving to the general area to share their extra truck space.
- Use the shipping container method where you pack up a portable storage unit that companies like PODS will move for you!
Keep saving money to move in the future
If you want to move sometime in the future, then the best option is to keep saving. Having a savings account will help you budget better for your move. Your savings account can also function as an emergency fund for any unexpected moving costs.
If you can't afford to wait, or the move is an emergency, ask a religious organization or charity for help. Faith-based groups like churches or synagogues will help in a lot of different ways:
- Cash assistance for rent, utilities, medical bills and more
- Storage for your belongings
- Meals, from canned good donations to mobile food units
- Shelters for temporary housing
TIP: Religious groups also offer emotional and financial support to no-income individuals, like for those struggling with homelessness and runaway teens trying to successfully transition into the adult world.
Determine what you can afford before the move
Before you can move, you'll need to determine what type of home you can afford. Closely and honestly examine your finances and understand how your financial history will be evaluated. If you are feel ready to buy or even rent a home, do the following:
- Maintain a stable job. When you apply for a mortgage, or a landlord runs a background check, they are looking for more than just whether or not you are employed. Generally, lenders and renters utilize a two year rule. This means they look at your past two years of employment. If you changed jobs, the change needs to make sense - either a lateral move in your field, a promotion within your company or a switch from a part-time to full-time position. Advancing your career is a sign of stable income.
- Check your credit. There are credit reporting services, like Credit Karma, that can provide you with your credit score. This score will be checked by mortgage lenders, banks and others as an indication of your financial health. Your credit score will play a major part in determining the amount of money you receive from lenders, as well as your monthly mortgage interest rate. Your employment history indicates the ability to pay, but your credit history represents your willingness.
- Prepare for a down payment. Whether you are renting or buying, a down payment is almost always required. If you are renting an apartment, it is standard to pay a month and a half of rent as a down payment. If you are obtaining a mortgage, the cost will vary, but be prepared to offer 10-20 percent of the total asking price. Because large down payments lower the risk for the lender, they often come with perks -- such as lower rates and no PMI (Private Mortgage Insurance).
- Create a budget. You will need to create a budget to itemize your current expenses, moving expenses and immediate fees that will be due on the day of your move. Don't forget the hidden fees. For example, even the most professional moving companies charge additional fees for things like long hauls, stairs and packing materials. Rental trucks charge an environmental fee as well as a re-fueling fee.
- Plan your search. Determine the type of home that you're looking for and where you want to move. This will help you determine your most realistic housing options geographically speaking. What is more important to you -- size or location? For example, a large home in the country will cost less than a small home in the city. It's also important to check property taxes for the area.
- Consider the future. Don't go for broke to purchase a new home. It is common for many people to stretch their budget, but you want to make sure you can reduce and eliminate debt within a reasonable amount of time. If you are renting, look for leases that won't obligate you to more terms and conditions than you can reasonably commit to. If you are buying, make sure to locate mortgage payment options that will greatly reduce your payments each year.
Prepare yourself financially and emotionally to move
Moving to an affordable home requires that you are financially stable and prepared. For first-time home buyers, there are online calculators that will assess your income and debt obligations. The assessment will be based on your down payment amount, annual homeowner's insurance, terms of your new mortgage, interest rates on your new mortgage and estimated annual property taxes.
If you want to buy your home and need a mortgage lender, then that lender will be looking at your:
- Bank and investment statements
- Child support payments
- Credit rating, credit history
- Debt Ratio
- Down payment amount, PMI
- Employment history
- Loans (auto, student, etc.)
- Possible property tax
- Credit rating
Moving is a multi-faceted process. It can be complex, but having a realistic understanding of how moving into a new home will impact your finances will make you better prepared for relocation. Creating a financial plan for the future will make you more confident about your move and the new investment worthwhile.