Money Management

It’s a huge decision to make. 

The decision to move from one part of the country to another is a big one. You’re talking about potentially selling a home and buying a new one, or if not, at the very least, packing up your entire life and having to adjust to new surroundings.

Now there are different factors that may be motivating you to contemplate a move. But a recent CraftJack survey found that the most common reason Americans move is for a job. And if you’ve gotten an offer that will require you to relocate, you might have a tough decision to make. Here are some pros and cons of moving for a job opportunity.

Pro No. 1: Getting to advance your career

Moving for a job could mean advancing your career and setting yourself up for many years of success. It may be that jobs in your industry are tough to come by where you live. If you relocate to a part of the country where your industry is thriving, you might buy yourself more long-term job security and opportunities.

Pro No. 2: Potentially getting to boost your income

A new job won’t always mean a boost in pay. But often, it does. If that’s the situation you’re looking at, and the raise at hand is substantial, then it’s worth considering. A much higher salary could help you meet different financial goals, whether it’s saving for retirement, buying a home, or simply getting to lead a lifestyle that doesn’t leave you reliant on credit cards.

Pro No. 3: Getting to move on somebody else’s dime

The job you’ve been offered may be in a city you’d like to move to. If you take that offer, you might get the chance to move on your new employer’s dime. It’s common for companies to offer some sort of relocation package that could include not just moving costs, but also temporary housing as you settle into your new city and role.

Con No. 1: Taking the risk that you won’t like the area

It’s one thing to relocate to an area you’ve spent time in before. But if that’s not the case, you’re taking the risk that your new surroundings won’t suit your needs, whether due to a lack of amenities or issues with the climate.

Con No. 2: Uprooting your life for a job that may not work out

Any time you move from one job to another, you run the risk of not liking your new job, or not being able to meet expectations. The stakes get much higher, however, when you’ve uprooted your life to take that new job.

Con No. 3: Having to bear the cost of a move

Just because you have to relocate for a job doesn’t automatically mean your new employer will pick up the tab for your move. Granted, this is something you can, and should, try to negotiate into your employment package. But if your employer won’t budge, you may have to shell out thousands of dollars simply to have your belongings transported from one place to another. And that doesn’t even include the cost of finding a new place to live.

Clearly, moving for a job can be a mixed bag. If you’re thinking of doing it, consider these pros and cons carefully before making your decision. And also, if you have a family, talk things over with them. The way your spouse and children feel about a move is something you should take into account.

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Going overboard on this expense could be problematic. 

Most of us have things we pay for on a regular basis that aren’t needs, but rather, wants. These include things like streaming services, meals at restaurants, and vacations.

It’s a good idea to put the needs you spend money on ahead of your wants, since those are expenses you can’t function without. But financial guru Suze Orman insists there’s one need that a lot of consumers get wrong. And that’s a mistake that can prevent them from meeting their financial goals.

Are you overspending on your vehicle?

Unless you live in a city with a solid public transportation network, you probably need a car to get to work, run errands, and just plain function. But you may not need as expensive a car as you think you do.

In a recent blog post, Orman talked about consumers’ tendency to overspend on a vehicle. She said, “The biggest need that I see people get wrong is their car(s). The average monthly loan amount for a new car is now more than $650 a month…That just smells of people treating themselves to a nicer car than they need.”

She makes an important point. Car prices are up these days, so if you take out an auto loan to finance a vehicle purchase, you could end up with a series of monthly payments that are higher than what you may have been looking at a few years ago.

But that doesn’t mean you should be signing up for an auto loan that costs you $650 a month. And to get a smaller loan, you’ll need to buy a less fancy car. It’s that simple.

Now you might argue that it’s worth splurging on a car since it’s something you use all the time. So if you’re looking at a $650 auto loan payment each month, but you can swing that payment all the while continuing to add money to savings and avoid credit card debt, then sure, go for it if it’ll make you happy. But if that $650 payment makes it so you can’t contribute to your IRA account, then it pays to consider getting a less expensive car.

It pays to err on the side of being frugal

While Orman says it’s common to see people spending a lot of money on their vehicles, it’s not just cars where people tend to go overboard. Rather, the mentality that it’s okay to spend extra can trickle down into different spending decisions both large and small.

Orman gives this example on her blog, “You’re at the grocery store and pick up the more expensive brand and tell yourself it’s just $1 or $2 more and you deserve it. I agree, you do deserve it. But if you stand in your truth, do you need it? That $1 or $2 per item can add up to $20 or more per shopping trip. Over the course of a month, or a year, that can add up to significant savings that could go toward paying down debt and saving.”

She makes a really good point. If you’re going to splurge on something that makes you happy, limit it to a single item. If you allow yourself to spend extra every time the opportunity comes up, you might hurt your ability to make progress on your financial goals.

In fact, before you make your next car purchase, think about what spending less on a monthly auto loan payment might do for your finances. If you can score a $450 monthly payment instead of $650, you might tell yourself you’ll put $100 of that into your savings account and spend the remaining $100 on takeout meals from your favorite restaurants.

And if you do decide to move forward with a more expensive car, just promise yourself you’ll cut back in another area. Otherwise, you might end up sorely unhappy with your financial situation down the line.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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If you struggle to save for taxes, give this a try. 

Freelance life comes with many perks — a flexible schedule, the ability to choose what projects you take on, and more control over your income potential. But it also comes with added responsibilities. Freelance workers must save up for and make their tax payments. But it doesn’t have to be challenging to do so. Keep reading to learn more about a savings technique that helps me stay on top of my freelance tax payments.

Put your savings on autopilot

Self-employed workers, independent contractors, and freelancers must pay their taxes themselves. Unlike traditional salaried workers, their taxes aren’t deducted from their paychecks. It can take time to get used to this responsibility.

If you’re a new freelancer, the last thing you want is to realize that you don’t have enough money to make a quarterly payment. This kind of situation just adds to your stress. But it’s possible to avoid this and be prepared.

Here’s what works for me: I put my savings on autopilot. I work with an accountant, so I know my tax liability. Through my bank, I have bi-weekly transfers set up to automatically transfer money from my checking account to my savings account. When it comes time to make my next quarterly tax payment, the money is ready and waiting for me to schedule the payment.

It’s free and easy to automate your savings. If you’re not yet using this method to save money for your freelance taxes, you may want to try it. You’ll likely feel more prepared once you set this up. It’ll be one less thing to worry about in your hectic life.

Treat your quarterly tax payments like a bill

Another practice that helps me prioritize saving enough money for taxes is to treat my taxes like a bill. It’s not something that I can put off without consequences.

Some bills like my mortgage, car insurance, and utility bills are expenses I must pay regularly. I also treat my tax payments the same way. My quarterly tax payments are bills that must be paid, not something I can ignore or delay. With this kind of thinking, saving up enough money for your taxes can be a lot easier.

What happens if you don’t prioritize these payments? You may be penalized if you skip quarterly tax payments or underpay. That means you’ll owe even more money to Uncle Sam. It’s best to stay on top of your quarterly tax payments. Otherwise, you’ll create more problems for yourself, and you could negatively impact your personal finance situation.

Don’t miss out on interest

If you’re setting aside money for upcoming quarterly tax payments, don’t miss out on the opportunity to earn interest. Don’t keep your money in your checking account. While a checking account is a secure place to keep your money, most checking accounts don’t earn interest.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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They’re important ones to run through. 

Although taxes are not due this year until April 18, the IRS will begin accepting tax returns at the end of January. And so it’s not too soon to start thinking about filing your return.

But should you file your taxes solo or hire a professional? The benefit of going the latter route is being confident that you’re filing your taxes correctly. And a tax professional might manage to get you a higher refund — not by breaking the law, but by being more familiar with the tax code than you are.

But there’s a cost involved in hiring a tax professional, and it’s one you may not want to bear — especially at a time like this, when living expenses are up across the board due to inflation. And so you may decide to just tackle your taxes on your own. But before you make that call either way, ask yourself these three important questions.

1. Do I have income from more than one source?

If your sole source of income for 2022 was a salary you collected at work, then you can probably do your taxes on your own. After all, all you really need to do is copy a single number from the W-2 your employer provides you with and call it a day.

But if you have multiple sources of income to report, then hiring a tax professional could be a smart bet. Many people picked up side hustles in 2022 to cope with inflation. If you went that route, getting help with your taxes could be in your best interests.

2. Do I have business expenses I’m looking to deduct?

If you own a small business or are self-employed, there are certain expenses you may be eligible to deduct on your taxes. These include everything from the cost of traveling to see clients to the cost of buying tools and office supplies to get your work done.

If you’re in a position where you’re able to deduct business expenses, then it pays to hire a tax professional for assistance. That person can guide you through the deductions that are legitimate versus those that are not. And a tax professional might identify expenses you never would’ve thought to write off.

3. Am I itemizing for the first time?

If you’re used to itemizing on your tax return, then you may not need the help of a professional this year. But if you’re itemizing for the first time, then it wouldn’t hurt to get assistance.

Let’s say you bought a home in 2022. You may now be eligible for a host of new deductions, like the interest on your mortgage and property taxes. But you don’t want to get those deductions wrong. And hiring a tax professional will help ensure that your return is as accurate as you want it to be.

There’s no rule stating you must spend money on a tax professional to file a correct return. But before you make that decision, run through these questions. You may decide that getting help is worth it for the stress relief aspect alone, and there’s nothing wrong with that.

Our picks for best tax software

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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