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In this Tennesee focused article, we’ll break down the cost of living here locally, including housing, utilities, getting around, healthcare, and more life costs that come with the relocation. We’ll explore why Tennessee is such a perfect option for people looking for affordability and a Southern lifestyle.
Tennessee Living on a Shoestring
Tennessee is an unexpected yet wonderful state for people looking to relocate across the country. Whether you are looking for a slower pace of life from NY/LA, looking to raise your kids with Southern charm, or simply got a great job offer out here, we know you will love TN.
With its cute little small towns, impressive cities like Nashville, great music scenes, and no state income tax, Tennessee offers a great quality of life at an affordable price for everyone.
If you are reading this article to understand if TN is a potential future home, read on. Understanding the cost of living is essential for making an informed decision on relocation to Tennessee.
1. Housing Costs in Tennessee
We all have to live somewhere, right? One of the main things that makes Tennessee so appealing as a spot for relocation is its extremely affordable housing market. Whether you’re looking for an apartment in Nashville or a house in a quiet suburb to escape the noise, you’ll find plenty of affordable options of all styles.
Home Prices: Tennessee’s average home price for purchase is around $350,000, significantly lower than the national average of $420,000.
This makes Tennessee a beautiful option for people relocating from more expensive areas like California, New York, or Washington D.C. who don’t want to give up on the city life yet need to save. Nashville has seen rising home prices in 2024 due to increased demand. Still, overall, the state is affordable for buyers.
The sooner you buy in the sooner you can lock in early 2025 prices. TN isn’t the best price for ROI from rentals, but if you are urchasing your own family home, this is a great state to save.
Renting in Tennessee: Renting is also quite inexpensive compared to other parts of the U.S. In cities here like Nashville, the average rent for a one-bedroom apartment is around $1,500 to $1,800 monthly.
In Knoxville and Chattanooga, you’ll find rents closer to $900 to $1,100 monthly for similar apartments outside the big city. Be sure you check out the transportation options before choosing your area.
2. Utilities in Tennessee
Utility costs in Tennessee are on the lower end of the spectrum, making it a cost-effective state. The state’s average monthly electric bill is around $150, which is lower than the U.S. average of about $250.
You are saving thanks to the state’s reliance on hydroelectric power. The average cost of electricity is about 10 to 12 cents per kilowatt-hour.
Water and sewage bills cost about $40 to $60 per month for wate depending on usage.
3. Transport in Tennessee
Tennessee has pretty affordable transportation costs, whether you choose to drive your own your car or rely on public transportation.
Tennessee gas prices are consistently lower than the national average for gas. The average price of regular gas is around $3.10 per gallon, which is well below the national average of about $3.50 per gallon but can fluctuate based on world politics. Since gas here is cheaper, people that live on the state lines tend to cross over to fill up their gas tanks.
Public transportation options are available in larger cities, but they are not very extensive and if you need to get somewhere, it may require a few busses or modes of transport. Nashville has a public bus system, and cities like Memphis and Chattanooga also have bus services.
That being said, owning a car is still necessary if you want ot get around simply or have kids. Don’t worry, car insurance in Tennessee is affordable, costing around $1,100 per year.
Tennessee has no major toll roads, so travel between cities is free. In big cities like Nashville, parking can be expensive in the downtown, where parking rates are around $10 to $30 per day for parking lots and garages.
You can find local initiatives that offer personal parking spots for a fraction of the price.
4. Healthcare Costs in Tennessee
Healthcare in Tennessee is very accessible for all and generally more affordable than in many other states. That is a big plus to living in TN, where you have great doctors and hospitals thanks to the universities.
The average cost of health insurance in Tennessee is $450 to $600 per month for a single person which is pretty average in the US and usually depends on your employer.
Tennessee locals can expect to pay around $100 to $150 per doctor’s visit without usign insurance. Prescription costs are lower than in other states, and healthcare services are available without long lines for doctors.
For grandma and grandpa, it is good to know that Tennessee participates in both Medicare and Medicaid programs, which has affordable healthcare options for eligible residents. Be sure their residency status counts for the program.
5. Taxes in Tennessee
No matter how ruch you are, taxes is that one thing that always gets you. Tennessee is one of the few states that does not have a state income tax, making it a attractive spot for those looking to maximize their income.
You will find many offshore companies that need a US address registering in TN thanks to this huge bonus. This lack of a state income tax is a major draw for both residents and businesses, allowing people to keep more of their earnings in their pockets.
While Tennessee does not have an income tax which is amazing, it does have one of the highest sales taxes in the country, with a state-based sales tax rate of 7%.
Local areas can add additional sales taxes, with some cities like Nashville having a total sales tax rate of 9.25%. Despite this, the overall costs of living balance out this extra tax.
Property taxes in Tennessee are low too compared to many other states. The average property tax rate is around 0.7%, while the national average is at 1.1%.
This makes owning a home in Tennessee a more affordable option for locals compared to states with higher property tax rates. All in all it pays (via the lack of taxes) to set up shop here in Tennessee.
6. Other Costs of Living Life
You have to eat and enjoy life, am I right? Grocery prices in Tennessee are generally average, though some items may be slightly cheaper or more expensive depending on the region. According to national averages in the US, expect to pay around $300 to $400 per month for groceries for a family of four.
Eating out is affordable in Tennessee, with things at inexpensive restaurants costing around $12 to $18 per person.
A nice night on the town might cost $40 to $70 for a themed night at great restaurants. Nashville and Memphis may have slightly higher restaurant prices due to the increased demand and tourism but you can always find a bargain. Try out the Sunday brunch options in the city, you can’t go wrong.
Tennessee is known for its country music scene, and fun options are everywhere so you will have to control your own budget. If you are new here, start by exploring Nashville’s live music venues or visiting the Great Smoky Mountains. You might just run into Taylor Swift!
7. Education Costs
Tennessee is very invested in education, and the University of Tennessee and other state universities offer low in-state tuition compared to private schools.
Public schools in Tennessee are funded by local taxes, and education costs for families vary by school district. You won’t generally find significant additional costs for public school beyond the usual school supplies making it accessible for families of all economic backgrounds.
The University of Tennessee has an incredibly low in-state tuition at about $10,000 per year for undergraduate students, which is very affordable.
Many young adults are choosing to move out to TN work for two years to establish residency and then sign up to save thousands of dollars. There are also tons of community colleges and technical schools with even lower tuition rates.
Frequently Asked Questions
What is the average rent for an apartment in Tennessee?
The average rent for a one-bedroom apartment in Tennessee varies by city. In Nashville, expect to pay around $1,400 to $1,600, while rents in smaller cities like Knoxville or Chattanooga are closer to $900 to $1,100.
Are taxes high in Tennessee?
Tennessee has no state income tax, making it one of the most tax-friendly states for residents. However, the state has a 7% sales tax and property taxes are relatively low at around 0.7%.
How much does healthcare cost in Tennessee?
Healthcare premiums in Tennessee average between $450 to $600 per month for a single person, with doctor visits costing around $100 to $150. Prescription drug costs are generally lower than in many other states.
Is Tennessee a good place to retire?
Yes! Tennessee’s lack of state income tax, low property taxes, and affordable housing make it an attractive place for retirees looking to stretch their retirement savings.
What is the cost of utilities in Tennessee?
The average cost of utilities, including electricity, water, and internet, is around $150 to $200 per month, making it more affordable than in many other states.
