I’m a Financial Advisor: 3 Times Moving May Be the Best Path to a Financial Reset
Wherever you go, there you are. There’s some truth in this old adage — changing your location doesn’t automatically erase bad habits, especially when it comes to money. Yet there are times when loading up a U-Haul, like a modern-day version of the Beverly Hillbillies can put you on the path to a necessary financial reset.
Switching ZIP codes or even entire states may sound extreme, but financial experts say that in certain circumstances, a move can be just the jump-start you need to rethink spending, reset priorities and put your finances on firmer footing.
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You Need To Downsize
Your personal and financial lives intersect at key moments. A divorce or separation. A roommate moving out. A job loss. Rising property taxes or insurance costs in your current area. Whatever the trigger, it’s often an event that makes downsizing your home not just emotionally logical, but financially smart.
For Daniel Gleichman, former CEO and current board member and shareholder of Madison Trust Company, downsizing can become part of a broader financial strategy.
“A saver may consider relocating if a move could impact their balance sheet tremendously,” said Gleichman. “For instance, moving may be enticing if it would result in freed-up capital, make the cost of living more sustainable, or grant access to better financial opportunities.”
You Can Free Up Money for Other Goals
In his work at a self-directed IRA custodian, Gleichman has seen people use moves as a catalyst for broader financial change, such as freeing up money to boost their retirement savings.
“In some cases, investors will take their newfound influx of available cash and redirect it toward additional contributions to their retirement accounts or into alternative investments,” said Gleichman.
Simply put, disciplined savers tend to think holistically about their future. They’ll make decisions — even big ones like moving — if it allows them to save more aggressively or invest more strategically for their long-term goals.
You’ll Enjoy a Better Cost of Living
Cody Schuiteboer, president and CEO of Best Interest Financial, acknowledges that uprooting your life to move states is a major decision. But if you’re feeling burdened by a higher cost of living, moving can provide a welcome financial reset.
He points specifically to remote workers struggling to make ends meet in high-cost metro areas. To illustrate, he outlines some hypothetical costs faced by households earning around $180,000 in cities like New York, Boston, San Francisco or Los Angeles:
10% to 13% in combined state and local income taxes
$4,000 to $7,000 per year in commuting costs
$3,500 to $4,500 per month in rent for a modest two-bedroom apartment
“The same household relocating to Raleigh, Nashville, Indianapolis or Tampa will experience an average 30% to 45% reduction in rent,” said Schuiteboer. “[They could] lower state income tax by 5 to 10 percentage points (or eliminate it entirely in states like Tennessee, Florida, Texas or Washington).”
Beyond housing and taxes, Schuiteboer estimates that leaving a high-cost city could potentially generate anywhere from $30,000 to $60,000 in additional annual cash flow — by relocating without reducing gross income.
“That’s the math of a reset,” he said.
However, Schuiteboer emphasizes one key point: For a move to deliver this level of savings, your income must be portable — meaning your work should be remote, contract-based or in a field valued in your new location.
“If a family moves from tech in San Francisco to a small Midwestern town and then loses remote work access, they're in a worse spot than before because their income dropped by 30% to 40% to match the lower cost of living,” said Schuiteboer. “Income portability is key.”
The Bottom Line
Who would have thought that renting a U-Haul could be a savvy money move? If you’re downsizing, struggling with a higher cost of living or trying to free up extra income to meet life goals, you might benefit from uprooting yourself. That said, make sure your income is portable — and that the move truly improves both your finances and your lifestyle before making the leap.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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