Are You Financially Ready to Leave California?

Are You Financially Ready to Leave California?

Moving out of state is not something that you should do on a whim. You need to make sure that your new home will be a lasting one where you can feel financially stable. Before you start packing to move out of state, take a careful look at your financial health to see if you are ready to leave California.

Examine Your Income

First, take a careful look at your current income and how it relates to the cost of living. You need to make sure that you live within your means wherever you move. A good ratio to use for your income is 50% to cover necessary expenses, 30% for things you want, and the remaining 20% to pay off debt or save. This last amount should also include a 10% to 15% investment in a retirement account.

Due to differing costs of living, you may not find a job with the same salary that you make in California, but the lower salary will cover the same expenses in your new home.

Consider Your Mortgage and Cost of Living in Your New Home

Part of the necessary expenses that you have should include no more than 40% of your income on your mortgage, wherever you live. If you are spending more than this in California, you’ll need to find a home in another state where you’ll spend less than 40% on your monthly payments. Due to rising housing costs, especially in California, you may have an easier time finding a more affordable home in another state.

Look at Your Emergency Financial Plan

Lastly, you’ll need to have an emergency fund. In California, wildfires and earthquakes can disrupt daily life and put you out of work for weeks. You’ll need money to live on in these situations. Similarly, you will need emergency funds when you leave California to cover the costs of any unexpected events that may require extra money. For instance, you need additional savings to cover unexpected medical bills or home repairs.

If you don’t have enough in your income for your emergency fund, you should evaluate your spending and see if you can move into a home with a lower mortgage elsewhere to allow you to save more money.

Get Help When You Leave California from IMPACT Properties

When you leave California, you shouldn’t try to do the process by yourself. Get help from IMPACT Properties. Contact us to find out how much you can get for your California home and for assistance with various parts of the moving process. Make your move as easy as possible with professional help from us at IMPACT Properties.