A lump sum relocation package has many benefits. However, if allocated poorly, it can end up costing money and adding stress. Many people underestimate how complicated and expensive moving can be. According to HealthStatus, moving is the third most stressful event one can experience. So using all your resources efficiently is important to having a successful move to the USA!
Each lump sum package is different and depends on a variety of factors, such as the company, your position, if you own a home, and your family size. All packages have several attributes in common. First, they are considered taxable income. This means that you will be taxed in the U.S as if this was part of your paycheck. However, some services are considered tax deductible so make sure to keep all your receipts.
To make the most of your lump sum relocation package, it is important to plan out all of your moving expenses and create a realistic budget. To do this, you need to know what parts of the relocation will cost you the most. The part of relocation that requires the most attention and has the highest associated costs are housing, moving household goods, and the sale of your old property.
1. Selling/Renting Your home
If you own a house in your home country, you must decide if you are going to sell or rent the property. Renting appears to be the easier option, but managing the renting of your home and being a landlord while living in another country can be stressful. If your home needs immediate attention, such as a major repair, you will have to manage the process long distance. This emergency situations can end up costing you.
Selling your home comes with a few costs as well. You may need to pay for an inspection of the house, and for any repairs that need to be completed to sell. Selling also takes time, research and typically you need to hire a realtor. The earlier you start the process of selling your home, the higher chance you have of minimizing your costs. However, if you do sell your home early, you may find yourself paying for a temporary place to stay in your home country before you move abroad.
2. Finding a Home in Your New Country
Whether you are looking to buy or rent, finding a home in the United States can be costly and time consuming. Start by establishing a budget and making a list of what you need in your new home. Consider the following factors:
– Do you have pets?
– How many bedrooms?
– Are you looking to be close to a city or live in the suburbs?
– What schools are available in the area?
Once you figure out the answers, it’s a good idea to start looking. If possible, you should budget for at least two trips to the United States; one to look at housing and one to arrange for necessities in your new home. If you are moving with family, it is a good idea to bring the family members along during the second trip to help them feel involved in the process.
If you are not able to arrange for housing prior to your move, you will need to temporary setup housing. Remember to allocate money from your budget for this. The budget should include money for rent, bills, food, and transportation.
3. Moving Household Goods
Do your research and obtain at least three quotes from reputable moving companies so you can compare them to find the best value. As your move approaches, begin packing. Packing early will ensure that your move is organized and that you do not forget to ship important items. Shipping goods internationally costs thousands, so you might want to sell or donate items you no longer need. Depending on the price, it might be cheaper to buy certain items once you arrive and sell your old items before leaving.
When creating a budget for allocating your lump sum relocation package, there are a few other major items to keep in mind.
2. Utility bills (electric, heat, water, etc.)
It is also a smart idea to set aside money for unexpected and emergency expenses. You should always be prepared for anything, especially when relocating to a foreign country.