City Planning: 3 Unique Ways Your Cost of Living Can Change When You Move
Whether you are moving from one suburb of a city to another or a completely different city, there are many ways that your cost of living might change.
Some of the obvious ways are rent or house payments and even utility bills, but there are also a number of hidden costs you might not be aware of.
Sometimes these costs will go up and sometimes they will go down. Here are 3 unique ways your cost of living can change when you move.
Auto Insurance
Auto insurance rates are set based on the zip code that you live in and statistical data that is collected about that area.
For instance, if you move to an area that has a statistically higher rate of accidents—for whatever reason—then your collision coverage is likely to rise even if you personally have never been in an accident.
On the other hand, if you move to an area that statistically has a very low rate of theft or vandalism, then your comprehensive coverage rates might go down.
Services
It is easy to understand how the cost of certain utilities might go up or down when you move to a new city.
What you might not expect, however, is that the cost of certain services such as plumbers may also go up or down drastically.
This is largely due to factors such as a plumbers’ union, which can give service providers collective bargaining power and allow them to better regulate the cost of their services.
Conversely, however, the cost of services going up is not necessarily a bad thing.
Many services such as plumbers or electricians have very little government regulation, which means you may be hiring someone who has no certification and possibly no formal training.
Where there are unions, however, there is also more internal regulation over the service providers.
This means while you may pay a bit more for a plumber or electrician in an area regulated by a union, you are also far more likely to be paying for a reputable, knowledgeable professional.
Taxes
While sales taxes may not necessarily change drastically when you move from one area to another, there are a number of other taxes that might.
Even sales taxes, however, can change drastically if you move from an area with no sales tax just as Oregon, Montana or New Hampshire to an area with high sales taxes such as Arkansas, Tennessee or Louisiana where the sales tax is nearly 10%.
That means an almost automatic increase of 10% on the price of everything you buy.
Property taxes and vehicle taxes are two other taxes you might either get hit with a significant increase or decrease on.
In some cases, your property taxes can increase drastically just moving a few miles or across a county line, even if the home you move into is less expensive.
Moving just a few miles down the road can create a drastic change in your cost of living.
In some cases moving to a more affordable home may not make the change you think it will because your other expenses may rise.
In other cases, you may be able to afford a much larger or nicer home without a significant income change just be moving to an area where other cost of living expenses are lower.
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Category: Family Finances
