Young Americans are the best at budgeting for this one big expense — while baby boomers are the worst. Here's what it is and why it's important to plan for it

Why is it important to budget for a move?

If you don’t have a moving budget, it can take a surprising amount of time to financially recover from a move. And if you go over budget, you could end up dipping into your savings or emergency fund to finance unanticipated expenses.

Aside from the upfront costs, it can take several months for the average American to recover financially from a move, the Lemonade survey finds, with nearly half of baby boomers (49%) taking more than four months to recover financially. And 14% of baby boomers take more than 13 months to recover financially (compared to just 1% of their Gen Z cohorts).

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Estimating your moving costs

A moving budget should factor in the cost of movers (or rental vehicle, if you’re not hiring professionals), as well as packaging materials, moving insurance and other fees.

You can expect moving costs to be higher if you have a larger home, which is typically the case for baby boomers. Empty-nest baby boomers own 28% of three-bedroom-plus homes in the U.S., according to a Redfin analysis, versus just 0.3% of Gen Zers with kids.

A moving estimate is typically based on the number of bedrooms and labor costs. For local moves, you’re typically charged by the hour, so you can get an estimate by multiplying the hourly cost of the movers by the number of hours you expect the move will take.

For long-distance moves, many moving companies charge a flat rate, which can help with budgeting (but keep an eye out for extra fees in the contract). However, if your long-distance move isn’t actually that far — say, less than 100 miles — or if you’re moving out of a small apartment, an hourly rate may be more cost-effective.

Tips on how to budget for a move

If your movers charge by the hour, you can save money by packing up your belongings ahead of time. If you don’t plan on using professional packing services, you may still have to pay for the cost of packing materials, which can quickly add up.

Keep an eye out for hidden fees or surcharges, such as fees for stairs, oversized items and the distance between a home and their vehicle. You may also be asked to pay extra to move specialty items, such as a piano or grandfather clock.

Even if you decide not to hire movers, you’ll still need a moving budget. You’ll have to rent a moving vehicle and pay for gas. If you’re relying on family or friends to help you move furniture, you might want to factor in the cost of their help — such as paying for pizza and beer after the move.

For a long-distance move where you pay a flat rate, you’ll still need to account for the cost of your own travel, including accommodation and meals. And, if your new home won’t be ready when you get there, you’ll need to budget in the cost of temporary housing and storage.

Once you’ve come up with a moving budget, you might want to top it up with a buffer for any unanticipated costs, such takeout or tips — so you can enjoy your new digs with peace of mind.