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How to pay for relocation costs

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Moving is one of the most stressful life events you can endure, especially if you aren’t confident you can afford it. Whether you’re moving for a new job or personal reasons, there are a variety of factors that affect the cost and timeline of your move.

As a result of tax reform, Americans can no longer deduct moving expenses. Depending on how much help you get from your family, friends or your new employer, the entire cost of the move might rest on your shoulder. Thankfully, some quick, effective options may help ease the financial burden of moving.

The repeal of the moving expense deduction

Under the previous law, taxpayers were allowed to deduct some of the costs of moving their goods and effects, plus certain travel expenses. But as of 2022, the exclusion for qualified moving expense reimbursements and deductions are both suspended until 2025. The one exception is members of the military on active duty who move due to a military order.

The cost of moving

Whether you’re moving across state lines or locally, moving can be expensive. For instance, the average cost of an interstate household move costs $4,590 as of Feb. 17, 2022. The average cost of a local move ranges from $875 to $2,350.

Although moving costs vary, here are six common expenses to help estimate what your move might cost:

  1. Hiring movers is one of the most important expenses you’ll make because, generally, you get what you pay for. HomeAdvisor found that the average cost of movers ranges between $857 and $2,316, but costs vary widely based on distance, location, how much stuff you’re moving and if you elect for extra services.
  2. Travel. Gas, lodging, and food can add up quickly. And if you’re flying, it’s easy for a small family to rack up over $1,000 for a one-way domestic flight. Travel to your new home has the potential to be one of your biggest moving expenses.
  3. Boxes. Boxes can generally be obtained for free from grocery or department stores. If you need containers for transporting fragile items, remember that durable plastic tubs can cost more than $20 each, depending on the size.
  4. If your move takes longer than expected because a house closing is delayed, for example, you might have to put some of your belongings in storage. The cost of a self-storage unit varies widely and depends on the location.ConsumerAffairs says a self-storage unit that’s 10 feet by 10 feet has an average monthly cost of $160.
  5. Item replacements. Odds are, at least a few things will be broken during your move. Remember to set aside some money to cover replacements.
  6. Deposits and fees. It’s possible that you may have to pay early termination fees for services like cable or utilities. You might even have to put down a deposit for services at your new place prior to moving in.

Instate vs out of state long-distance moving costs

According to HomeAdvisor, these are the average costs for local and interstate moves. Local moving is any move under 100 miles within the same state and interstate or long distance moving across the country or over state lines.

Type of mover Average charge Extra charges
Local/Intrastate $50-$100 per hour +25-$50 extra per additional mover
Interstate/Cross country $2,600-$6,600 per load

Costs of moving based on house size

These are average costs for moving based on house size, according to HomeAdvisor. The chart is based on average hourly rates charged by local moving companies.

Size of house Estimated time of move Average price range
1 bedroom apartment 3-5 hrs $240-$500
2 bedroom apartment 4-7 hrs $320-$700
3 bedroom house 6-8 hrs $480-$800
4 bedroom house 8-12 hrs $640-$1,200+

How to pay for your relocation

While moving can be expensive, there are a few ways that you may be able to get the money you need.

Personal loans

It’s ideal to pay for your move upfront, but that’s not always possible. If you need to finance some or all of your move, applying for a personal loan is one of the best options to consider. Personal loans are either secured or unsecured loans that are paid off in equal installments, usually over two- to five-year terms. The monthly payments include principal and interest.

The main benefit of using a personal loan for your move is the interest rate. Borrowers with excellent credit scores can score rates around 10 percent. Those with good credit scores often secure rates within the 13 to15 percent range. By contrast, the average credit card interest rate as of February 2022 is 16.28 percent. Over the lifetime of a loan, just a few points can make a big difference in the amount of interest you’ll pay.

Personal loans can be obtained from banks, credit unions, and online lenders. The application process is usually easiest with online lenders, but overall personal loans are much quicker than other loans. Sometimes the approval process might just take a few days.

Credit cards

A credit card might seem like a good way to pay for your move quickly. You might even be thinking about the potential to earn rewards in the process.

Credit cards offer revolving debt, which means that, unlike personal loans, you don’t have to reapply for credit when you need more money. However, the downside is that credit cards typically come with higher interest rates than personal loans.

Let’s say you’ve crunched the numbers, and you expect your total expense to be $3,000. The largest monthly payment you can afford is around $100. A personal loan with an 11 percent APR and 3-year term will get you a monthly payment of $98.22. Over the life of the loan, you’ll pay around $536 in interest.

Most 0% interest credit card offers run from 12 to 18 months. If you could afford to pay around $300 toward your balance every month, you could benefit from a credit card because you wouldn’t incur any interest. If not, a personal loan offers a lower payment and saves more than $400 over the life of your loan. Plus, you can’t be tempted to swipe a personal loan at the department store and add to your debt.

You should only use a 0% interest credit card for larger expenses, like relocation, when you can afford to pay several hundred dollars on your balance every month. (Ideally, you should pay it off completely before the 0% intro period ends to avoid paying interest.)

Relocation assistance

If you’re relocating for a job, ask your new employer if it’ll cover some of your relocation costs. Some employers offer a relocation package, which reimburses some or all relocation expenses, as an incentive for you to accept a job. Alternatively, you can ask for a sign-on bonus or negotiate a higher salary, and then use some or all of the extra funds to cover your moving costs.

Bottom line

Moving can be expensive, and it can seem particularly overwhelming if you do not have the savings or company assistance to pay for all of the costs.

If you need to consider financing options, carefully evaluate what option will work best for your financial situation. Consider factors such as monthly payments, due dates and your other bills. If your finances get muddled with multiple bills from loans and credit cards, you can also consider a debt consolidation loan to help manage your payments.