Many couples who reach retirement age can’t stand the thought of moving out of their family home. Not only is that where all your memories have been created, but now that the kids are gone, you get the entire place to yourselves. Also, there might not be enough money saved up to live the retirement lifestyle you first envisioned, much less come up with the cash to purchase a new home in this financial environment of high-interest rates.
But if you’re 62 years of age and find yourself staying awake at night wondering how you’re going to pay for retirement, you might consider applying for a reverse mortgage. What’s a reverse mortgage?
According to the professionals at All Reverse Mortgage Inc., a reverse mortgage is a loan that allows seniors 62 and older to borrow against their home’s equity. If approved, you need never pay a monthly mortgage payment again. You can take your proceeds in one lump sum or equal monthly disbursements. What’s more, you don’t have to pay the loan back until you move or die.
But what if you decide that staying in the family home is not an option? What if you’d rather sell and move to a more tax friendly state like Florida, for instance? If that’s the case, there will be some major expenses you need to be aware of. In a word, you need to create a moving budget.
According to a new report by Forbes, moving can be an overwhelming experience for a multitude of reasons, the major one being that it can become an expensive endeavor without doing the necessary planning. But if you create a moving budget prior to purchasing boxes and packing even one box, you will hone in on the many factors to consider when deciding on the total cost.
In general, a local move can range anywhere from $500 to $2000, depending on the scope and size of the move. Long-distance state-to-state moves can run up to $6,000 or $7,000, depending on where you are going and the scope of what’s being moved.
Here are some tips for creating a budget for your big move.
Conduct a Detailed Inventory
Before searching for the best moving companies and comparing prices, you need to determine what’s coming with you and what gets tossed out. It’s a best moving practice to create an inventory list of everything that will be accompanying you to your new home.
You can start with oversized items like furniture, beds, and bedding, plus specialty items like desks, pool tables, pianos, vehicles, and more. Once that’s done, you can whittle your list down to smaller stuff like lamps, kitchen appliances, clothing, and other relatively small items. Make sure you go room to room to make sure you don’t miss a thing.
Come Up with a Moving Budget Template
Says Forbes “Home,” there no need to utilize the latest software or calculators to make a “moving budget template.” Whether you decide to create a template on an online spreadsheet or write it down on paper, both approaches will make life easier for you and your spouse.
Here are some instructions for setting up a moving budget template:
–Category and Cost should go at the top of your page
–Now add three main sections to the first column under the headings, Self-Moving, Professional Movers, and Other Expenses.
–You then make certain to fill in the prices for the moving items listed under the applicable section.
–After that make a row you can title Subtotal beneath each section.
–Calculate all the self-move costs plus the professional-move costs using a simple calculator or the formula that’s available on your spreadsheet, and make sure to place this value under the Subtotal heading.
–You should finally create another Subtotal that’s called Contingency. Multiply the total cost by five or even ten percent just to be safe. Add that number to your subtotal.
Here’s what a sample moving budget will look like:
Self and Professional Moving fees: $500
Self and Professional Packing Services: $300
Moving Insurance: $100
Specialty Services (such as drivers to transport your car to another state): $500
Hidden Costs: $200
Contingency (5%): $80
Total Cost: $1,680
Basic Moving Costs to Keep in Mind
It should come as no surprise that your moving costs will be far different if you move yourself or hire a reputable professional mover. As you create your moving budget template, you will see where to trim your expenses and determine which option works best for you.
Working with a Professional
It might seem an expensive proposition at first, but working with a professional moving company, especially if you’re going a long distance, can save you money when it comes to moving costs, time, and sweat equity. Many movers work by the hours, which means you can save on costs by doing your own packing, furniture breakdown, and storage way ahead of time.
Choosing to Move Yourself
Choosing to move yourself might seem like the cheaper alternative, but it isn’t free by a long shot. You will not only be spending money on packing materials, but you’ll need to rent a big box truck that needs a lot of gas, plus do all the heavy lifting on your own. You will be spending a lot of time packing and prepping prior to moving day. When that day comes, you’d better hope for good weather.
Whether you choose to stay in your family home after retirement, or you decide to pull up stakes, and move to a cheaper state is up to you and your spouse. Just make certain that you make the time to create a proper financial plan for both options.
We hope you found this blog post on Tips on Creating a Budget for Your Big Move useful. Be sure to check out our post on Budgeting When Moving Into a New Home for more great tips!
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