The True Costs of Relocating To Another Town

by Silicon Valley Blogger on 2008-01-0427

Someone in my family is picking up stakes and moving his family clear across the world to be closer to his in-laws. He’s also doing it because he thinks he’ll have better job prospects in a new country. Somehow, I’m not too convinced that it’s a good move, especially since he and his family will be living apart from the rest of us — his extended family — here in California. It’ll be quite a loss, especially for my children, whom I imagine would benefit greatly from long-term bonds with their relatives. But alas, the decision has been made.

So the reason is primarily financial, but even so, I ran the numbers for my relative and didn’t particularly feel it would be a fruitful move right off the bat. The cost of living is clearly 3 times higher in this new region where I was shocked to hear that for children to enter the school of their choice, business expats were donating up to $85,000 to administrators. Job competition is much higher and real estate is tight and therefore terribly expensive. They’ll have to be content with condo or apartment living with living options currently scarce. I don’t know, it doesn’t seem to be something I can get excited about and despite all these concerns, this family is forging on.

Sounds like a lot of stress and it is. If you check out our tables that rank the financial events in our lives, you’ll find that amazingly, the whole process of moving bundles at least FOUR major financially stressful events all into one process.

Expectedly, there will be a few dents to one’s finances as well. A study on relocation trends found that the average relocation took over $17,000 to manage. Where does all the money go?

relocating, moving with baby

The Financial Costs and Risks of Relocating

Moving expenses.
Would it make more sense to sell of all your stuff and replace them once you settle down? Or should you consider shipping your stuff instead? Such is the dilemma of many a traveler to a new destination. If you decide to ship your possessions to a new location, prepare to budget at least $10,000, which is the average charge for the service.

Travel costs related to scouting out your new town or city.
You’ll probably have many options to consider, which you’ll narrow down to a few neighborhoods. When you’re at the point of seriously considering where to live, you’ll no doubt be spending some time, effort and money on a few visits.

Loss of stability in business or employment.
If you are retaining your job with your employer then this wouldn’t be an issue. But as in the case of my relative, he’s moving cold turkey. He has no business nor employment ties worked out ahead of time at his destined place of residence; and he has a lot of guts doing this with a couple of kids in tow. He and his wife are doing this with blind faith based on basic impressions that business is better there for people with their skills. How much stability are you willing to sacrifice to make such a drastic move?

Actual cost of securing a new living space in a new neighborhood.
Beyond figuring in the cost of house hunting trips and checking out various places as part of your relocation budget, add on the costs of a new rental or a new mortgage at some point. If you decide to buy a new house, or if you’re forced to sell your old house at a loss, your bank account will be further impacted. As the saying goes, it can feel like being caught between a rock and a hard place.

Expenses related to finding new schools for your kids.
If you’re moving cross-country, such as to another state, you may have less to worry about. But if you’re like my relative who’s hopping clear across the world, you may be concerned about finding the right school for your children. Unlike them, I doubt I’d consider moving to a country that would expect me to pay hefty donations just to secure a place for my child in a favorable school system.

Costs related to selling your home.
What if you currently own a house and have only lived in it for a short period? A forced sell will be more costly tax-wise and you may not recoup the closing costs you paid on your home if you lived in it for less than 3 years. Also, you may have to brace yourself for losses from the sale of your property if you’re facing an ugly real estate market (such as today’s). Not only that: closing costs, fees and real estate commissions related to selling your former home and purchasing a new one can actually set you back at least $18,000!


It looks to me that transplanting your family from one place to another counts as one of those bigger expenses in life and would need tremendous preparation. The best way to handle this of course would be to get your employer or potential employer to shoulder as many of the costs as possible. But for some folks like my loved one, there won’t be any reimbursements in the horizon. Nevertheless, I’d like to discuss this topic further in another post, where I can relay some details and resources for those of you bent on going where the grass is greener. 🙂

Image Credit: Someone emailed me the above photo. I’m still hunting for the source so right now it’s by anonymous.

Copyright © 2008 The Digerati Life. All Rights Reserved.

{ 21 comments… read them below or add one }

guinness416 January 4, 2008 at 11:27 am

Don’t forget immigration fees. As someone who’s lived in four countries, I shudder to think how much I’ve spent on visas, lawyers, forms, hell even passport photos over the years. The costs of establishing yourself in terms of drivers licences, insurances (some countries don’t count your driving record at home), banking, etc will add up too – it takes a while in a new country to figure out where the best deals are.

Samantha January 4, 2008 at 12:19 pm

I think just picking up and moving and not having a job already lined up is a risky move. You don’t have the actual income figure to estimate your expenses of just regular life there.

On the other hand, there is a lot to be said for the family support structure. Maybe the wife feels that whatever they may have to give up is worth being close to her family again.

Our little family of 4 has moved across country twice (not to ANOTHER country, though!) and I am interested to see how your thoughts compare to our experience.

Silicon Valley Blogger January 4, 2008 at 12:50 pm

Excellent points. When the move is to a different country, you nailed it when you mentioned that lawyer fees, licenses, permits, visas and so forth can literally take over your life. Several thousands of dollars is not out of the question. I am myself a U.S. immigrant who landed here in the early 80’s and that time, the costs did add up to a noticeable amount. As I was still a dependent during that time, my parents had to shoulder more than one household just to get me and my siblings (who moved along with me) established here while we pursued our education.

Just reminds me of how much I owe my parents!

Yes, it appears that the pressure from my relative’s wife’s family is strong as that is also one reason for the move. Somehow they are convinced that their talents and skill set will find stronger demand at the place they are moving to. It’s a huge leap of faith but they feel well supported, so I’m at least comforted by that. But to make ends meet may take a while because they’re starting from scratch and will need to develop a new clientele.

My arguments have been against this move from the start but there may be other considerations I am missing out on which this family has mulled over, so I can only bid them a safe and smooth transition.

RacerX January 4, 2008 at 3:10 pm

We just movesd a year ago and it was especially tough on the family because; I moved out before them, my wife really had to organize the whole thing, it had to match what my new employer would pay for- lots of quirks- follow them or no $$, oh yeah…it was Christmas.

However, moving without family around is much tougher.

Robert January 4, 2008 at 8:30 pm

3 times the cost of living in CA? Are they moving to Japan?

Moving as an expat is much simpler if you’ve already got a job, as companies are more likely to pay for a lot of the extras, have people to help walk you through the process, etc. I worked in Dubai for a couple of years, but the cost of rent there is just absolutely terrible. Luckily, the company covered that. 🙂

Frugal Dad January 4, 2008 at 8:30 pm

You’re right, relocation is extremely stressful. A couple years ago I relocated, bought a new home, started a new job, and my wife and I had our second child all in the span of one or two months. Talk about stressed out!

Lazy Man and Money January 4, 2008 at 9:47 pm

It helps to have the military pay for all your moving costs.

Jonathan January 5, 2008 at 4:45 am

Relocating is certainly one of the least fun things I’ve had to do in a while. All the way down to having to make sure all your business contacts know you’re new phone number and your banks have your new mailing address. USPS Forwarding doesn’t always work!

Thankfully, our employer did shoulder most of the moving costs, and the new salary did manage to cover most of the cost of living increase.

rocketc January 5, 2008 at 5:04 am

I am considering a move from WI to CO – for less money. this article is going to have an impact on my decision.

thewild1 January 5, 2008 at 10:16 am

I couldn’t imagine living outside the united states.

wordup January 5, 2008 at 11:39 am

To thewild1:

I used to think just like you as well. I’m an American in investment banking and spent my first 8 years of work in NYC. Then I moved to Hong Kong to help manage our growing Asia business. I was extremely reluctant at first but we decided to go for it because of the professional opportunities. It turns out to have been a great decision. Honestly living in Hong Kong feels a lot like New York, and except for maybe two or three places in the States I would much rather living in Hong Kong than most places in the States now that I’ve experienced it. Costs here are high but as expats you typically get compensated much better or many things are paid for by the company. Any western thing you can think of is readily available here, just as easily as it is in the States. Some places here, like Singapore, are so western that if you were dropped in the middle of it you might not realize you weren’t in the States. Another big thing is money, especially with the rapidly growing Asian economies, pretty much any expat out here is making serious bank. My industry pays a lot on average but nonetheless if you’re in Hong Kong you’ll be getting roughly twice of what you would if you were in NY. In a few short years here we’ve managed to save millions of dollars that we wouldn’t be able to do back in the States because of the lower pay and lack of perks. Asia might still be a culture shock for a lot of Americans, but if you move to Europe you might never end up going back to the States based on what I see with my expat colleagues who went to London or Paris…..they love it more than SF or NYC.

Samantha January 5, 2008 at 1:17 pm

@SVB: Your comment on the wife’s family pressure to try their current country brought to mind something else husband and I discussed when deciding: Would we kick ourselves later if we didn’t! In relative’s case, would wife and family bring up their choice NOT to move during the inevitable “down” periods of life? What I mean is, would they say later, “If you had moved here years ago, you’d be in a much better position.. blah blah…” By moving and giving it an honest and full-tilt chance to work in the foreign country and perhaps THEN deciding it would be better back in the states, relative can say, “Well, we tried that already.” Move may or may not be the best thing financially (“leap of faith” was a good phrase to use), but giving it a serious go could net something money can’t buy: a quick end to an argument with the wife and inlaws! HAHAHahahah.

I wish your relative and his family well, though my national pride hopes they miss the USA.

Brip Blap January 5, 2008 at 8:27 pm

I have lived in Europe in 2 separate stints and other than one 12-year stretch in one town in my childhood-to-teens period I’ve lived in 8 different cities – and I’m not even in the military. Having relocated to a remote country (Russia) and come back, I would hesitate to “relocate” again. Picking up everything you own and moving it to a new location is a huge headache. If I were going to do it again, I would go lean – get rid of my stuff and try to head over with the clothes on my back (and the wife and kids, of course). I loved living in Russia but moving there and back was an awful, awful experience – from bribes to get my stuff in to bribes to get it out, stuff getting broken, etc. It is intensely stressful. I’m not even getting into visas, etc. as Guinness416 mentioned, and I was single at the time, without a house to sell, just a lease to break. I wouldn’t buy in a foreign country for anything until I had been there a decade, personally.

I dodged the drivers’ license question in Russia by carrying several crispy new Mr. Franklins with me whenever I drove, incidentally. After the first time I got shaken down for “your papers are not in order” I realized that the best document was one colored green…

Jason March 18, 2008 at 2:58 pm

1 grand…NO MORE!!!!

Webkinz July 1, 2008 at 11:36 pm

Are these costs offset if you sell your current house for more than you buy your future one?

Silicon Valley Blogger July 1, 2008 at 11:39 pm


That’s a good point!

I would think that if you end up making money on a house you sell, after which you move to a place that has a lower cost of living, then yes, you’d come out ahead.

Sam August 19, 2008 at 2:31 am

Well if they’re moving to Singapore, its a big mistake*laughs*. Are they? Unless they try third world developing countries like Philippines(where I live now) , Thailand or Vietnam where they can live like a King, moving to any 1st world Asian countries can really be a financial loss.

Fix My Personal Finance

Silicon Valley Blogger August 19, 2008 at 6:37 am


Your comment has intrigued me! I’d like to know why you think moving to a 1st world Asian country is a financial loss. Is it the competition?

And you must really be following my stories as yes, you guessed right — I’m referring to my relative who just migrated to Singapore with his family.

I was hoping you’d share more of your own thoughts and stories on how it is to be living and working in Asia. 🙂

annakat August 30, 2008 at 11:15 am

They must have some reason for wanting to move even if they do not tell you. I’d go ahead let them move tell the bye, give them a kiss and a wave. Even if they do not like it at least they tried, you’ll never be the reason they did not go. You have to let them make up their own minds what they want.

Walt Sims August 30, 2008 at 1:59 pm

It does look like it is going to be a financial strain on them. Have they got any savings or anything to back them up or any jobs when they get there? Especially when you have kids you need to make sure that you have a plan when you move, you can make do with only you, but kids are another story. Family is important and having a bond is something not to be taken lightly.

Dave August 6, 2009 at 8:36 am

Domestic relocation can be costly and stressful, but an international relocation must be even more so. Hopefully they will settle in well into the new area and not miss the USA too much! As once a decision like that has been made, it’s even more costly to try to reverse it. I wish them every success and happiness.

Leave a Comment