Is timing everything?
Is moving during an economic downturn a bad idea? When we first planned our move from Washington, DC to London, the economies in both countries were still moving in a positive direction. Now however, both the US and UK are already in or are heading for a recession, unemployment is up, wages are down and so forth.
So when is it a bad idea to move during a recession?
- You have no savings.
- You don’t have a new job lined up.
- The industry you work in is experiencing large job losses (e.g. the auto industry in Detroit or investment banking in London or New York).
- You own property or a business that would have to be sold at a large loss for you to move.
Some would say it’s reckless to move at a time like this. Financially, I believe we’ve prepared adequately for the move. We have all of our moving expenses and six months of living expenses set aside. But then again, we currently have two stable, decent-paying jobs in DC. Is it foolish to give these up during such a period of economic downturn? Not to mention that we meet one of the criteria I’ve listed above – since our move is still six months away that neither of us have jobs in London yet.
Here’s what we’re doing to prepare for a big change during a time of economic uncertainty:
- Cutting back on unneccessary expenditures and putting aside these savings.
- Only making new purchases that can easily be moved. This saves us money in two ways, first we’re not buying a lot of stuff and second we’ll be saving on shipping costs.
- Paring down our belongings to the essentials. This gets rid of clutter and again saves on shipping.
- Being organized. Knowing in advance what sort of paperwork and fees (passports, visas, international pet transport) will need to be completed beforehand may save your from having to pay expedite fees. Even more importantly, if you’re sufficiently organized, you may have to delay your move at considerable expense.
- Research salaries and rent/housing prices for your new location. Outlining a budget for what our expenses will be in London. In addition, we won’t be making any large purchases right away such as a car. Keep your expenses as low as possible until you have an idea of what your monthly income and outgo will be.
- Having a cushion of at least six months of living expenses. This money will certainly be useful for security deposits and giving us the peace of mind that we won’t need to take the very first job we’re offered if it’s not the right fit.
- Updating our skills and resumes.
- About six weeks before the move, begin aggressively networking and applying for jobs.
Interestingly enough, almost everything I’ve listed above about preparing for a move applies to personal finance in general. It’s always a good idea to avoid unnecessary expenditures and save as much money as you can. Building your skills and networking will always be useful even if you stay with your current job.
By doing the above, I feel that we have a workable plan to move our move as successful as possible. What would you add to the above?
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