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.

Car Tax

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.

Car Insurance

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.

Daycare

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.

Mortgage Payment/Rent

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.

Gas price

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.

Grocery

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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6 Responses to “Financial Impact of Moving from New Jersey to Virginia”

  1. mapgirl |  Sep 11, 2009 at 2:45 pm

    1. Gas where you live should be some of the cheapest in the DC area. It gets more expensive in Arlington and DC.

    2. The savings in car insurance should cover most of your Personal Property Tax. It’s for cars, motorcycles, and I believe boats are also included. There is a waiver for the first $20K of the car’s value, and another $17K-20K in value for a clean fuel vehicle. So if you have an older car like I do, you will pay less than $125 for the car in tax, and probably $25 for the tax decal ($18 for bikes). Typically you have until November to pay it before the cops start checking stickers. Also they use published rates for car value, so you can figure this out. It’s $5 for every $100 of value.

    So for a $25K car, less $20K, the rest of the value is $5K. That amounts to $250 in tax. There is also another provision if your car is worth less than $20K, which reduces your tax by some graduated amounts. My 2001 Altima now pays zero tax and only the tax decal for $25.

    (I have the 2010 tax doc for my car in front of me. But I moved to DC so I don’t sweat it.)

    3. There should be some farmer’s markets in your area.
    http://vagrown.vi.virginia.gov/default.aspx?market_type=%27RFM%27%2C+%27WFM%27&rid=5

    4. Try the Wegmans in your area. There are some things you can get cheaper there than you can get at Giant. (At least compared to the ghetto Giant where I shop in DC.)

  2. Yvonne |  Sep 11, 2009 at 3:38 pm

    Seconded on Wegmans. Better quality and lower prices (if you can resist the dangerously tempting prepared foods area).

  3. SavingEverything |  Sep 11, 2009 at 10:19 pm

    You can also check out the area for closeby(?) Food Lion, Trader Joes, WholeFoods, and Safeway, in addition to Wegman’s. I’ve found Wegman’s in NY, PA, and NJ to be more expensive than others. For Giant, they should be familiar to you: it’s the same company as StopandShop, which was found in MA and branched out to CT, NH, NY, and NJ (merged with Giant in 2004). How close to MD are you and how far do you like to drive? You can consider The Great Atlantic & Pacific Tea Company’s SuperFresh, has 12 stores in MD (though i think they’re mostly northern MD). You can also consider Costco’s, Walmart Supermarkets (which include grocery stores). Is it true that: “fresh local produce sold at farmers markets and grocery stores, or basic, unprepared cold grocery foods, are taxed 2.5%”, includes local tax???

    The other factor you may have to consider is the fees involved to change over titles, registrations, and drivers licenses. It may be expensive in VA, compared to keeping your out-of-state license ’til expires. But, you’ll have to switch over based on VA’s rules. Also, do you have to pay a fee for car emissions inspection and regular car inspection per year?? per 2 years?? NJ it was free, right? Also, is the car tax or auto excise tax a 1-shot tax or is it like Massachussetts where they have an auto excise tax that residents pay to their towns every year??

    For State Income Taxes? Is there a City or County Income tax as well for people who both work and reside in VA? (MD has this. And, several cities have this like NYC, Philadelphia, to name a few.) Is there same deductions allowed in VA vs NJ?
    Enjoy your new home; and remember, if you ever visit NJ, PA, CT, MA, NH, that I believe these states do not tax your clothing purchases… and think Delaware and New Hampshire as the place to make your big purchases for sales tax savings. But, then again, we’re required to umm put that on our income tax.

  4. Mike |  Sep 12, 2009 at 8:38 am

    Regarding the credit card charges, $19/month savings.

    Sometimes you have to look at the overall benefits. If the day care is just a small mom/pop shop, a lot of times, I would use check/cash. You might have save $19/month but they are paying $50/month++ extra in fees.

  5. Kathy |  Sep 12, 2009 at 9:33 am

    In Manassas at the Manassas Mall in the back a new super Wal-Mart will be opening soon and you have Costco right down the street and the other option of Shopper’s Food Warehouse… So you get to come to the Battlefield and shop, and then make a day of it.. I am sorry that I can’t find what town you made your home? Manassas is 14 miles outside of Vienna.. Are you there?

  6. walkinwood |  Sep 17, 2009 at 1:05 pm

    What about property taxes in NJ?