How to Budget for Moving Expenses

Edited by Admin
How to Budget for Moving Expenses

Many Canadians don’t associate moving with banking, but a little-known fact is that certain bank accounts can make budgeting your moving expenses much more effective.

 

By using the right bank accounts, you can earn higher interest on your savings in a shorter amount of time. Other accounts can also help you save more money that can go towards your moving budget.

 

Since moving is a process that can take a few months (and in some cases years) to plan and execute, earning interest in the time between is a financially savvy move.

 

In this article, we’ll show you how to budget for moving expenses and how using the right bank accounts can make budgeting for your next move a seamless process.

 

Create a Moving Checklist

 

It’s important to consider that everyone’s living and moving situation is different from the next. For example, a family of four has different needs than a freshman in university, and that student will have different needs than a senior citizen.

 

The best way to find out what your specific needs are is by creating a moving checklist.

 

Outlining every last expense will make it easier to understand how much your move will cost. Accounting for all of your moving costs can help anyone not only plan for a move but remain within budget.

 

Below are a few aspects that anybody should consider before moving.

 


Distance and Transportation

Distance can make quite the dent on your moving budget.

 

If you’re moving a few blocks away from your current residence, your budget will differ significantly compared to someone who’s moving across Canada.

 

If you’re moving across the city or remaining in the same province, you’ll merely have to factor things like gas or vehicle rental.

 

However, if you’re moving from one province to another, you may have to consider things like accommodation and food, and other factoring aspects, such as flights, and shipping for your belongings, for example.

 


Labour

 

Labour is another crucial factor to consider in the moving process.

 

Comparing rates from moving companies can decrease your costs when the day to move finally arrives.

 

Another alternative is asking friends and family members to help you move. While this might not be a possibility for everyone, it’s certainly the cheaper option.

 

Storage

 

Storage is an underrated option that many people who are transitioning between living spaces can use to their advantage. Using storage can help your moving process work with extended time frames.

 

Should you have to move abruptly, using storage space can be a cost-effective means of making time work in your favour.

 

For the possessions that you don't have room for but can't part with, storage is the hero that gives you the best of both worlds.

 

Supplies

Boxes? Dollies? Shrink and bubble wrap? Moving supplies seems too obvious to include on this list, but accounting for these supplies makes a world of difference once you see how much these costs can add up.

 

These moving essentials can be expensive, especially if they’re go unaccounted. The cost of supplies, down to the permanent markers, is a crucial step in budgeting for moving expenses.

 


 

How Banking Products Can Cover Your Moving Expenses

Let’s say you, or, you and your partner, have $20,000 in combined savings and you’ve decided that you’ll be moving to a new home within a year from today.

 

Placing your savings in a high-interest savings account (HISA), a tax-free savings account (TFSA), or using a free chequing account all share significant benefits on your wealth and its potential growth, in the time between now and your move.

 

These three types of bank accounts can help you once you’ve created a budget for your moving expenses, but are also great to own for any and all savings goals.

 

High-Interest Savings Account

High-interest savings accounts (HISAs) are savings accounts offering interest at a rate higher than 1.05%. If you open an account with a bank or credit union online, you can earn anywhere between 1.05% to 3% on your deposits.

 

If you lock in a rate of 2.80% on your savings, you can earn up to $560 in one year. Using a HISA can cover a good chunk of your moving expenses, simply by placing your savings in a HISA.

 

Tax-Free Savings Account

A tax-free savings account (TFSA) offers interest without taxation on your earnings. The account also allows you to withdraw your savings as you’d like without any monetary penalties—if you keep your contributions beneath your yearly limit.

 

If you open a TFSA account online and invest $20,000 into an account with a return rate of 2.50%, you’ll be able to see a return of $500 in your first year. You’ll also be able to remove your savings at your discretion, without facing any penalties.

 

Free Chequing Accounts

The average Canadian spends around $15 on monthly chequing account fees, but using a free chequing account can drop that number to $0 in monthly fees.

 

That means using a no-fee chequing account can save around $180 a year in expenses, which can easily cover your moving supply costs.

 

Additionally, free chequing accounts usually come with unlimited transactions, another plus and way to save money on expenses when the big day to move finally arrives.