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Relocating to another state is a big step to take. It means adjusting to a new culture and leaving friends and family behind. But of course, there could be huge advantages.
One big advantage that is a driving factor is the lower cost of living. If you live in an expensive state such as Hawaii, New York or California, you could save huge amounts on your monthly bills just by moving to a cheaper state. Getting more for your money could allow you to create a better life for yourself – you may be able to afford a bigger house, a better car and go on more vacations.
But is moving to another state always financially worthwhile? It depends where you move from and where you move to. Below are a few financial considerations to make before moving to another state.
Which expenses could you save by moving to a different state?
There are many expenses that can vary depending on the state that you live in. These include:
Rent/mortgage
Property prices vary massively across the country. In California, the average home is priced above $500,000. In West Virginia, the average is $130,625.
This has a big impact on rent and mortgage rates. In California, it’s not uncommon to pay $2000 per month on rent. In West Virginia, the average monthly rent is under $1000. This guide lists some of the cheapest states to buy and rent property for those who may be tempted to relocate.
Energy bills
Average energy bills also vary from state to state. This is partly due to households using more electricity in certain states, however much of it comes down to the cost per kWh – which is three times higher in some states than others!
For example, in Utah, electricity is 10.44 cents per kWh, which is relatively low. In Hawaii, it’s 30.28 cents per kWh, the highest in the country.
Water bills
You could pay less for water in some states than others. Water supply is more scarce in some states leading to higher bills. Lower levels of rainfall can also affect household water consumption for things like watering lawns.
In Oregon for example, it’s not uncommon to pay $76 per month on water bills. In Vermont meanwhile, many households pay less than $20 per month.
Fuel
You could also spend less on gas by moving to another state. Gas prices vary across the country. In California, expect to pay well over $5 for a gallon. In Mississippi, the average right now is just over $3.
Of course, you may find that you also use a car less in some states. Some states have much more walkable cities and better public transport systems, which may even mean that you don’t even need a car.
Groceries
The cost of groceries also varies a lot from state to state. This is something to also consider if you’ve got a big household.
New York is often regarded as one of the most expensive states for groceries, where a carton of 12 eggs can cost almost $7. Meanwhile, in Oklahoma, you can buy a carton of 12 eggs for less than 2 dollars.
Insurance
Location can play a big part when it comes to rates for home insurance, auto insurance and health insurance. In some cases, moving to another state could greatly reduce your rates.
In fact, just by moving from New York to the neighboring state of Vermont, you could save $600 per year on your auto insurance. This is simply because the rate of accidents is so much greater in New York than in Vermont.
Will your wage be affected?
While you could end up spending less per month by moving to another state, it’s important to consider whether your wage is also likely to be reduced. While rent is almost double the amount in California compared to other states, California is known for its relatively high wages.
The ideal scenario would be to have a job that you can work remotely from anywhere in the US. For example, you may be able to get a job in California and continue working that job in West Virginia while taking in the same wage.
With jobs that cannot be worked remotely, you don’t have this option, and you should research exactly what you’re likely to be earning first.
How much will it cost to move?
There are cases where you could save $4000 in a year by moving to another state. However, given that the average cost of a long distance move is $4300, you likely won’t see any savings in the first year.
If you’re planning a long-term move, it may still work out to be an investment that is worthwhile. But if you were planning to move away for a year to save some money, you may find that it has no real financial benefit.
Of course, if you haven’t got many possessions to bring and are thinking of moving to a neighboring state, a short-term move could still be a way to save some money. It can sometimes be great for those who are young with no commitments looking to build some savings.
Should you move to another state?
If your objective is to save money, you should make sure to carefully select the right state. Research all the different expenses and consider the ones that are most likely to have an impact on your life (for instance, if you’re likely to do a lot of driving, fuel costs and auto insurance rates could be important to consider).
If you need to get a new job, look into the average salary so that you know what to expect when it comes to pay. Make sure that you’re not saving $2000 per year, but also earning $2000 less. On top of this, factor in the cost of moving if it’s a short-term move. Doing all of this will ensure that your move to another state is financially worth it.
