Financial Impact of Moving from New Jersey to Virginia
Though we have been in our new home in Virginia for only 5 days, I already noticed a few money related impacts the move had on us.
The move was mainly because of the relocation of my wife’s job at her employer’s request. But she didn’t get any adjustment of her salary. Of course, in this economic environment, an adjustment is probably too much to ask. We actually feel lucky that she still got to keep her job. That’s the most important thing for us right now. Besides, her employer offered $5,000 in moving assistance, which is more than enough to cover the moving cost. For me, the *new* job I got in VA pays a little more than i my old job did in NJ as I mentioned early. So overall, we made a little more now than before, but the spending increases as well.
State Income Tax
Though my wife’s salary didn’t adjust upward because of the move, she can still keep a little more on her paycheck, thanks to the Virginia’s lower state income tax. According to salary.com, New Jersey’s state income tax for our income level is 6.37% vs.Virginia’s 5.75%. That’s less than 1% difference.
State Sale Tax
We are also paying a little less for shopping in Virginia because Virginia has only 5% sale tax as compared to New Jersey’s 7%. However, back in NJ, we didn’t pay sale taxes for clothing and food. In VA, we have to pay taxes on pretty much everything. Here, the sale tax for clothing is 5% (VA does have tax holiday for cloth and school supplies in August though) and food 2.5%. For this part, we are likely to end up paying more than we did in NJ.
There’s no such thing as vehicle tax in New Jersey. But in Virginia, it’s a different story. I found a car tax is rather weird, but that’s what we have to pay. We don’t know how much the tax is yet as we are still using NJ plates.
Well, Virginia gives us a relief when it comes to car insurance premium. New Jersey is notorious for its high cost to insure cars. Though we think we got a good deal from Costco, we still pay about $555 every six months to insure our two cars (one comprehensive and the other liability only). Moving to VA actually saves us nearly $110 for a 6-month policy with exactly the same coverage. A big saving here.
So far as we can see, the biggest increase in spending is the cost to send our daughter to daycare. Though my wife gets a 10% discount from her employer, we are still paying $1,9112/month now. In New Jersey, the total cost was $1,350 a month. The good thing is the daycare center takes credit card (only Discover though). So at least I can get $19 back every month.
I am glad that we sold our house in New Jersey before moving down here so we don’t have to pay both the mortgage for our old home and rent for our new one at the same time, though the sale isn’t closed yet (hopefully it will soon). Our monthly mortgage payment is about $1,112 a month (I also make about $160 extra payment) plus $210 monthly association fee. In Virginia, our monthly rent is $1,421, about $100 more than before.
I always have the feeling that New Jersey is probably one of the cheapest place in the country to fill up cars, so I was a little surprised when I saw on gasbuddy.com that today’s average price for one gallon of regular gas in our old place is $2.48 compared to Virginia’s $2.39. However, I did pay more than $2.50 at a gas station here the other day. So maybe the saving won’t be that much, if any. The positive side is now we both have much shorter commute than before.
Back in New Jersey, we had a farm market nearby where we got our fresh vegetables and fruits every week with price much lower than other grocery stores. There was also a ShopRite not far away fro us to shop for other items. Here in Virginia at where we live now, the only grocery store I found so far is Giant which sells stuff at a relatively higher price than ShopRite does. And there’s no farm market as we used to have. There’s a Walmart about 10 miles away where we can get other household items and a Costco about the same distance in another town. Since food is only a very small portion of our spending, it won’t cost us a lot more even with the higher price and sale taxes.
So overall, I think it will cost a little bit more to live in Virginia with the largest increase coming from child care. Since we have only been here for a few days, I don’t know exactly how much the increase is. Hopefully, the increase in my salary is enough to cover it
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