What’s the cost of living in Tennessee? Key expenses to consider
Learn more about the cost of living in Tennessee. Or, if you’d like to speak to a financial advisor, answer a few simple questions below, and we can match you to an expert best suited to meet your needs.
Summary
Tennessee has a lower cost of living than the national average, with the yearly average coming in at just over $40,000.
The average home value in Tennessee is just over $319,000, while the average rent is around $2,000.
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What is the average cost of living in Tennessee?
Tennessee is home to over 6.9 million people and is among the more affordable states to live in.
According to 2021 data from the Bureau of Economic Analysis, the average cost of living in the state is $42,469.
According to data gathered in 2022 from MERIC, the Missouri Economic Research and Information Center, the state ranks 10th in a list of states with the lowest to the highest cost of living.
What are the average housing costs in Tennessee?
As of November 2024, the average home value in Tennessee is estimated to be around $319,000, according to the Zillow Home Value Index.
It’s important to note that housing prices can significantly differ across various regions within the state.
Here are some examples of typical home prices based on Zillow's data:
The average price of rental apartments nationwide is $1,748. The average rent for an apartment in Nashville is $2,195.
In addition, understanding these costs in relation to the average salary in Tennessee is crucial for realistic budgeting.
How much do utilities cost in Tennessee?
Utility costs play a significant role in Tennessee's overall cost of living.
According to Forbes, the average monthly cost is around $431 and can be broken down as follows:
| Utility | Average cost in Tennessee |
|---|---|
| Utility | Average cost in Tennessee |
| Energy bill | $130.98 |
| Monthly water bill | $43 |
| Internet | $30 |
| Natural gas | $66 |
| Phone bill | $114 |
| Streaming | $47.50 |
How much does grocery and food cost in Tennessee?
When it comes to groceries and food costs, Tennessee generally aligns with prices found elsewhere in the United States.
According to Zippia, those in Nashville pay $346 on average each month.
According to 2021 data from the Bureau of Labor Statistics, the average spending on food at home is $5,259 annually, or about $438 per month for US households.
What are the transportation costs in Tennessee?
Transportation costs, including gas prices and vehicle maintenance, impact Tennessee's overall cost of living.
According to MIT, a single adult with no children can expect to pay upwards of $5,400 a year on transport-linked costs.
Gas prices in Tennessee are typically in and around the national average. While Tennessee was below the national average at the time of writing, these prices fluctuate over time.
It is also worth noting that prices can vary across different regions within the state.
How much does healthcare cost in Tennessee?
Understanding healthcare expenses is crucial when considering the cost of living.
The specific healthcare costs in Tennessee can vary depending on factors such as insurance coverage and individual circumstances.
Therefore, it is best to research and consult with healthcare providers and insurance companies to obtain accurate cost estimates.
MIT estimates:
| Scenario | Annual healthcare expenditure |
|---|---|
| Scenario | Annual healthcare expenditure |
| One adult, no children | $3,213 |
| One adult, one child | $8,732 |
| One adult, two children | $8,743 |
| Two adults (one working), no children | $6,943 |
| Two adults (one working), one child | $8,743 |
| Two adults (one working), two children | $8,668 |
| Two adults (two working), no children | $6,943 |
| Two adults (two working), one child | $8,743 |
| Two adults (two working), two children | $8,668 |
What are childcare costs in Tennessee?
For families with children, childcare can eat up a substantial sum of their income.
Families in Tennessee currently pay nearly $7,000 per year for childcare for one child.
A report from the Tennessee Commission on Children and Youth in July 2024 found that families making the median income in Tennessee spent, on average, 40% of their household income on childcare from 2022 to 2023. This was an increase of 13% on the previous year.
The cost of childcare also varies across the state.
The 2024 County Profiles of Child Well-Being in Tennessee report examined childcare costs across Tennessee’s 95 counties.
It was found that Williamson and Fayette counties had the lowest cost burden in the state, with families in each state spending 19.6% of their median household income on childcare. Hardin County had the highest at 105.7%, an 84.4 point increase compared to the year before.
How much will you pay in taxes in Tennessee?
When calculating your taxes, the state income tax, sales tax, and property taxes are three of the biggest taxes you need to consider.
Tennessee has no state income tax rate.
The sales tax rate in Tennessee is 7%.
However, it's important to note that additional local sales taxes are imposed by counties and municipalities, which can vary.
Therefore, the combined sales tax rate, including state and local taxes, can range from 7% to 9.75%, depending on the location within Tennessee.
Property taxes are calculated based on the appraisal value of your property multiplied by the property’s classification.
The classification for residential properties is 25%.
How much does retirement cost in Tennessee?
Retiring in Tennessee is appealing due to its lower cost of living and favorable tax policies.
A significant financial benefit is Tennessee's tax-friendly environment. There is no state income tax, so income from retirement savings and Social Security is not taxed. Public and private pensions are also exempt from state taxes, allowing retirees to save more.
The state is ideal for those on a fixed income.
The overall cost of living in Tennessee is below the national average, making everyday expenses like housing, groceries, and healthcare more affordable. This helps retirees maintain a comfortable lifestyle without quickly depleting their savings.
Additionally, Tennessee does not have inheritance or estate taxes, ensuring that your estate can be passed on to beneficiaries without additional state tax burdens.
Get expert financial advice
The amount of money needed to live comfortably in Tennessee can vary depending on location, lifestyle, family size, and personal preferences. However, as the most expensive state in the US, you may need more than you first think.
It's essential to consider these factors, along with personal circumstances and preferences, when evaluating the cost of living in Tennessee. In addition, consulting with a financial advisor can provide valuable insights and assistance in managing expenses and financial planning.
Whether you’re retirement planning or considering relocating to chase a new career, Unbiased can assist you with your move's financial ins and outs. Find the right advisor for your needs today.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.