What’s the cost of living in Tennessee?
Wondering about the cost of living in Tennessee? This article summarizes everything you need to know, from tax rates to healthcare costs.
When considering a move to a new state, understanding the cost of living is vital for effective budgeting and financial planning. If you’re planning a move to Tennessee, here are some current statistics related to the cost of living in the state that could help you make up your mind.
The average cost of living in Tennessee
Tennessee is home to over 6.9 million people and is among one of 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.
While 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.
Housing costs in Tennessee
As of March 2023, the average home value in Tennessee is estimated to be around $291,354, according to the Zillow Home Value Index as of March 2023.
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:
| City | Average Home Value |
|---|---|
| Memphis | $148,368 |
| Nashville | $426,695 |
| Knoxville | $324,261 |
| Chattanooga | $280,686 |
| Clarksville | $294,739 |
The average price of rental apartments nationwide is $1,702. The average rent for an apartment in Nashville is $1,787.
In addition, understanding these costs in relation to the average salary in Tennessee is crucial for realistic budgeting.
Utility costs 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.
| Utility | Average cost in Tennessee |
|---|---|
| Energy bill | $130.98 |
| Monthly water bill | $43 |
| Internet | $30 |
| Natural gas | $66 |
| Phone bill | $114 |
| Streaming | $47.50 |
Grocery and food costs 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.
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.
Gas prices in Tennessee are typically in and around the national average. 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.
Healthcare costs 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 advisable to research and consult with healthcare providers and insurance companies to obtain accurate cost estimates.
MIT estimates:
| 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 |
Childcare costs in Tennessee
Families in Tennessee currently pay around $6,926 per year for childcare for one child. This figure doubles for two children.
However, it's important to note that this figure can vary across the state.
Taxation in Tennessee
Tennessee has no state income tax rate.
Here's a comparison of income tax rates among some neighboring states:
| State | Income Tax Rate |
|---|---|
| Tennessee | No state income tax |
| Alabama | 2% - 5% |
| Kentucky | 2% - 5% |
| Georgia | 1% - 5.75% |
| Mississippi | 5% |
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.
The bottom line
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.