You got the offer. It`s the career opportunity of your dreams. There`s only one problem: You`ll have to relocate-to another town or another state.
How do you figure out what it will cost you to move, and what your living expenses will be when you get there?
And that salary increase that looks so good on paper. Will it keep you in steak and champagne or beans and beer in another city with a different cost of living?
A New England computer service says it has can give you the answers. For a fee, the company, Right Choice Inc., will provide a customized, after-tax financial analysis of how your move will affect your cash flow. The service was designed by James Angelini, a professor of accounting and taxation at Northeastern University in Boston.
In the six months since it opened its doors, more than 200 clients have used the service to decide whether to relocate and to negotiate salaries with prospective employers, said Michael Foley, sales director of the Derry, N.H.-based firm.
”Knowledge is power,” Foley said. ”We`ve found that most people do only a superficial job of analyzing the financial impact of changing jobs or moving.”
All the facts
You could say Right Choice goes to the opposite extreme.
By the time this company is ready to start your financial analysis, it may know more about your personal balance sheet than the IRS does.
Clients fill out a detailed questionnaire to provide income, fixed costs, living expenses, assets, debts and other financial information. They also must supply copies of their tax returns and W-2 forms, and those of any household members who should be considered in the analysis.
But all information remains confidential, Foley said, and the company returns tax and wage forms, keeping no copies.
The information is fed into a computer program to which taxes, average costs and other location-specific information from government and private databases have been factored in.
The client pays $125 for the analysis, which, including mailing time, may take several days.
Foley acknowledged that there`s no magic to the service; given the time and resources, people can conduct a similar analysis for themselves.
The benefit of using Right Choice, he said, is that ”for a little over $100, people can get it done correctly. It takes the guesswork out.”
Hidden costs add up
The ”hidden” costs of relocation and job changes can torpedo a budget. For example, a new job may turn a worker`s perks into daily expenses.
”An employee might have a different deal with a prior employer,” Foley said. ”One might pay commuting expenses, for instance, and the new one may not.”
Beyond such obvious considerations as salary and housing costs, people planning a move may be unaware that it also can mean changes in auto, travel, telephone, food and utility costs, Foley said. Relocation may entail whole new categories of living costs. New Hampshire residents, for example, don`t pay a state tax; they will if they move to most other states.
”People have some knowledge that it could cost more to live in another area,” Foley said, ”but they don`t know how much.”
Take Patrick Mariani, a Vermont resident who was considering a food service company sales job in the middle-class community of Kenilworth, N.J. A headhunter told Mariani he could expect a salary ”in the low 50s” should he accept the position.
Mariani sensed it would take more than that to support his wife and two children in the same lifestyle they enjoyed in their small hometown of Wilder, Vt. Indeed, Right Choice`s analysis showed that if Mariani accepted the job at a salary of $52,000, relocation would mean a net loss of $28,000 the first year, principally because of the difference in housing costs.
”The same house that cost us $110,000 in Vermont would cost us $240,000 there,” he said.
When the employer offered even less than $52,000, negotiations broke off. Mariani is still in Vermont, but he said he is so pleased with Right Choice`s service that he is considering using it again, this time to prospect a move to Atlanta.
Most are managers
Mariani is fairly representative of Right Choice`s clients. Most are researching relocation for white-collar, middle-management jobs with salaries of $30,000 and upward, Foley said. But relocation doesn`t always drive living costs up. Another Right Choice client learned his move from Lincoln, R.I., to Hunterville, N.C., would mean a net gain of about $10,800 in the first year.
In any case, Foley cautions, the analysis doesn`t factor in lifestyle issues like the quality of schools or proximity of cultural facilities. There, clients are on their own.
”That involves a lot of subjective analysis of what a person deems important,” he said. ”We`re not involved in that.”
Most of Right Choice`s clients to date have been individuals, but the company is targeting new business sources such as corporate outplacement services.
In the Boston area, for example, it is hoping to gain a foothold among the area`s computer companies, many of which are reducing their staffs.
”It`s a new field, but there`s a need,” Foley said.
”With people getting transferred within the same company or changing jobs voluntarily, there are millions of people moving every year.”
Further information on Right Choice is available by calling 800-872-2294.
