Congratulations! You finally decided to take a big step in your career and take the opportunity out of state. Your company is offering a great salary, benefits, and $20,000 to help you relocate. It is now up to you to start making accommodations for your family, vehicle, pets, and additional expenses. Initially, $20,000 sounds like you will be able to cover everything but how do you know for certain?
During this exciting and eager time in your life, make sure you understand how to manage effectively your lump sum and enjoy a stress-free move.
What is a lump sum relocation package?
A pre-specified amount of money to cover relocation expenses incurred during your move. Lump sum packages help with moving, traveling, and temporary living expenses that may incur during your move. Lump sum payments are common for individuals relocating for corporate jobs. Expenses can be more or less but allocated to help with the move.
Managing your expenses
With that type of money on hand, it can become easy to mishandle the money and fall short of completing your relocation. Since you will be collecting a lump sum, it will benefit you to calculate how much expenses will cost and allocate funds accordingly.
Moving expenses are tax deductible. For tax purposes, keep all your receipts during the relocation process as it will help you during tax time. Your employer may not tell you but your lump sum is considered taxable as earnings. For a better understanding, speak with your accountant about tax deductions on your move.
Preparing for the unexpected is always a good idea when relocating. Things happen; and being ready is the best solution when it comes to moving. With your lump sum, be hesitant on spending all of it quickly because you can run in to obstacles finding residence, home repairs, utilities, transportation, and more. If you aren’t sure what covers your expenses, have a conversation with your HR department on best practices.
Picking a mover
To save money, the first thing individuals do to cut cost is look to find the cheapest mover. Naturally, hiring a moving company could take the largest percent of your lump sum but going cheap could actually end up costing you more in the long run. The most important part of relocating is making sure your belongings get to the final destination safely. Invest the time and money in to making sure you find a professional and reliable moving company.
Before selecting a moving company, visit ProtectYourMove.gov to ensure that they are legit. This Federal Motor Carrier Safety Administration (FMCSA) has a ton of resources that will help with your move like finding registered movers, filing a complaint, and protecting your move.
Speak with your employer for recommendations on long distance moving companies that they may have a partnership with. Most employers have developed relationships with van lines. You may receive additional discounts and perks you would not get otherwise. Moving companies may offer assistance on budgeting, planning, and tax counseling for your move.