It's hard to believe that only five months have passed since I was known -- among Fools -- as idxbuster. Waaay back then, I was already a confirmed Fool, but I was also safely tucked away, in my private office, in my comfortable career with a Fortune 500 manufacturing giant, in a small Midwestern town.
Today, as TMFBuster, I come to you from my open desk in a buzzing newsroom-like office at the Motley Fool, near the heart of Washington, D.C. You might guess that such a transition would be tough on a guy and his family, and you wouldn't be too far from the mark. The whole truth, however, is that the destination has been "easy street" compared to the transition -- the move.
Uprooting one's family and moving them across the country is a project -- like picking a spouse, deciding when to retire, or building a dream home -- that presents itself to most people only a few times in life, preferably only one time. All projects are difficult until you develop a system for attacking them, usually through experience. But, these once-in-a-lifetime tasks defy this standard growth path. Hardly anybody is really good at them.
One day, my wife and I were agonizing over whether to spring for Cheerios or just buy the generic equivalent. The next day, we found ourselves confronted with "the move," a seemingly endless string of time-constrained, multi-thousand-dollar decisions. We learned a great deal and, in the spirit of Fool-to-Fool growth through experience, we want to share some of it here.
We certainly hope to have no future need for this stuff ourselves...
Internet-accessible banking and charge card accounts
For a month, during our transition, my family and I were separated by a thousand miles. And, during this period, we moved large sums of money -- larger than we're used to, anyway -- as our old house was sold and our new house was bought. Moreover, we both found ourselves managing temporary budgets in new environments. We could have never pulled it off so seamlessly without our Internet-enabled accounts.
By the way, the best thing about Internet-only banking is that, when you move, there is nothing to change but your home address!
Managing your family flow ratio
You learned all about the corporate Flow ratio at the Fool, right? Well, when your cross-country move arrives, it'll be time to learn about the family Flowie! The idea for families is the same as it is for corporations: make money off of your short-term cash holdings and limit interest costs in covering your short-term cash needs.
If your timeline is less than a month, credit cards are the perfect vehicle for covering short-term needs. Of course, you have to be ruthless when it comes time to apply the offsetting income to the charge account. Failure to deposit the check and pay the credit balance promptly will result in some painful interest charges, particularly if you are floating a large sum.
If you have followed Foolish teaching and established a family emergency fund of two to three times your monthly expenses, this will be your second best source of emergency cash. Dipping into this fund, however, will cost you some interest income. Credit cards are still best, provided you trust yourself beyond a doubt to pay them off on time.
In general, you'll never be happier sleeping on top of an emergency fund than you will during a cross-country move. But, try to keep it in the bank if at all possible.
Also, on the subject of cash flow, do what you can to ensure that large checks due to you are deposited quickly. When we closed the sale of our house, I was offered the option, for a small fee, of having proceeds wired to my mortgage holder. Being penny wise, I turned down the offer.
I also failed to set up a direct deposit of our cut -- the money left over after our mortgage was paid off. By the time I received this check and got around to depositing it, more than two weeks had elapsed. The interest lost during this period on the sizable sum, at 6%, would have covered the wire transfer fees with money to spare. Lesson learned.
Rolling over employer-sponsored retirement plan savings
There is at least one key exception to the moving-time cash flow rules. Unless you know exactly what you are doing, you do not want temporary possession of any money in employer-sponsored retirement accounts. If you want to move these funds, it's usually best to request a direct transfer from your old company plan to a self-directed rollover IRA at the brokerage of your choice.
Also, it's safest to establish a "conduit" IRA (i.e., the funds are not mixed with other IRA funds) so that you can roll the money back into your new employer's retirement plan, if this turns out to be your best option.
Holding or cashing a rollover check -- during the hectic period around your move -- could result in some nasty tax consequences. If you want more details, our Foolish tax guy provides an excellent summary of IRA rollover rules.
Real estate agent or sell it yourself?
There are three tricks to selling a house: finding potential buyers, negotiating a good price, and careful attention to contracts and other paperwork. With sufficient study and time (both before and during the sales process), a diligent Fool can handle the contracts and other paperwork complexities that might arise on a moment's notice. Short on time or inclination, the same Fool can find a good lawyer to handle the paperwork for a small fraction of an agent's cut.
So, in my mind, the choice between selling a home yourself or through an agent comes down to finding buyers and negotiation skills. If you are in a tough market, short on time, and lack negotiation skills, an agent is probably a wise choice.
On the other hand, if demand for your home is high, you live on a busy street, and you are not pressed for time, you may want to skip the agent. If potential buyers are ringing your phone off the hook, you'll find that the negotiating will come easy, especially when you consider the large real estate commission that won't be coming out of your proceeds!
A small grab-bag of extra tips
Try extra-hard to be easy on the young ones, and expect toddlers to regress a little. For them, the stress of relocation is profound and their need for attention will increase -- precisely at the point where you have the least time to give.
When you hold the garage sale, use the high-volume, low-margin approach. Price everything at $2 or less. People will buy stuff simply because they can't believe how cheap it is, even if they don't really need it. I'm convinced that this strategy doubled our total take.
After the moving truck pulls away from the curb, you may think that you have only a day's cleaning left and a few trash bags to fill. Multiply these estimates by three.
Get rid of all your funky trash -- paint cans, oil and gas, chemicals, etc. -- well ahead of time. You don't want to be faced with a tough decision at a critical time -- like, say, whether to lose half a day when you can least afford it, driving 60 miles each way to the designated drop-off or to, well... do something else with the slimy stuff.
A final thought
This wraps up the potentially useful part of story. I just wouldn't be a struggling, wannabe writer, though, if I didn't make at least one attempt at being profound. So, here goes.
The designer of our world made little kids really cute for a reason -- to protect them from their parents when they have egregious potty accidents. In the same way, I think there may be a purpose behind the pain of moving. It left us too exhausted to be melancholy as we pulled out of the driveway for the last time, leaving behind our cherished home of days gone by. And, by the time we gained enough strength to deal with the loss, it was too late for such idle thought. We were already swept up in the challenges and opportunities of today's new home!
Related Fool Links:
Buying a Home
Online Banking
Choose a Discount Broker
Pay Off Credit Cards
See Also