What Is the Cost of Living in Tennessee?

Tennessee offers natural beauty, a rich cultural heritage, and a growing economy, attracting many individuals and families. Understanding the financial landscape is important for anyone considering living in the state. The cost of living covers basic expenses like housing, food, taxes, and transportation. This overview clarifies what one might expect to spend to maintain a standard of living in Tennessee.

Key Components of Living Expenses

Housing represents a large portion of living expenses in Tennessee. The median home value was approximately $300,000 as of early 2024. For renters, a one-bedroom apartment statewide averages around $1,300 per month, and a two-bedroom apartment costs about $1,500. These figures can fluctuate based on location, amenities, or property age.

Utility costs vary by usage and location. The average monthly electricity bill is around $140, depending on home size and climate control. Water and sewer services add $50 to $70 per month. Natural gas expenses, primarily for heating and cooking, range from $60 to $100 monthly, especially during colder months. Internet services cost between $60 and $80 per month, and trash collection is $20 to $30.

Grocery costs are part of a household budget. Weekly expenses for an individual range from $70 to $90, a monthly food bill of $300 to $400 for a single person. For a small family, these costs can double or triple, depending on dietary preferences and shopping habits. A gallon of milk averages around $3.50, and a loaf of bread is about $2.50.

Transportation expenses depend on commuting distances and reliance on personal vehicles. Gas prices in Tennessee track the national average, ranging from $3.00 to $3.50 per gallon in early 2024. Public transportation exists in major metropolitan areas but is less common elsewhere, requiring personal vehicle ownership. The average monthly car insurance premium is about $150, varying by driver’s record, vehicle type, and coverage.

Healthcare costs are a consideration. The average monthly health insurance premium for an individual is around $550, though subsidies may reduce this for eligible individuals. Out-of-pocket expenses, including co-pays, deductibles, and prescription medications, add to overall spending. A doctor’s visit without insurance might cost between $100 and $200. These figures do not include specialized treatments or chronic conditions.

Tennessee has no state income tax on wages and salaries, resulting in savings compared to states with high income taxes. However, the state has a higher sales tax rate, with a statewide general sales tax of 7% on most goods and services. Local jurisdictions can add up to 2.75%, bringing combined rates to 9.75% in some areas. Property taxes average about 0.67% of a home’s assessed value, lower than the national average, making property ownership more affordable.

Regional Cost Differences

Cost of living varies across Tennessee’s regions, influenced by population density and economic activity. Major metropolitan areas like Nashville, Memphis, Knoxville, and Chattanooga have higher living expenses. These urban centers feature more expensive housing markets, with median home prices and rental rates above the statewide average. For instance, a one-bedroom apartment in downtown Nashville can exceed $1,800 per month, reflecting demand in a thriving job market.

Transportation costs are higher in urban areas due to traffic congestion and higher car insurance rates. While public transportation is more robust in these cities, it may not fully offset vehicle ownership or ride-sharing costs. Services like dining out and entertainment also cost more due to increased business overhead. Concentration of amenities and employment opportunities contributes to their elevated cost of living.

Suburban areas surrounding major cities offer a moderate cost of living, balancing affordability and access to urban amenities. Communities outside Nashville or Memphis often have lower home prices and rental rates than urban areas. Residents may enjoy reduced property taxes and lower daily expenses for groceries and services. Commuting from suburbs to urban employment centers is common, but introduces variable transportation costs depending on distance and fuel prices.

Rural parts of Tennessee have the lowest cost of living, especially for housing and property taxes. Median home prices in less populated counties are lower than the statewide average, making homeownership more accessible. Property tax rates are also at the lower end, easing the annual financial burden for homeowners. However, this often means limited access to services, specialized healthcare, and diverse employment opportunities.

Rural residents may incur higher transportation costs due to longer distances to workplaces, shopping, and medical facilities. Public transportation is often nonexistent, making personal vehicle ownership a necessity. While daily expenses like groceries may be slightly lower, overall cost savings in housing and taxes often make rural living attractive. Regional differences highlight the importance of considering specific locations.

Personal Spending Factors

Individual lifestyle choices impact the actual cost of living in Tennessee, beyond averages and regional differences. Discretionary spending on entertainment, such as concerts, sporting events, or theme park visits, can inflate a personal budget. Frequent dining out, especially at higher-end restaurants, also adds expense compared to preparing meals at home. Hobbies requiring specific equipment or travel can further increase monthly outflows.

Shopping habits for clothing, electronics, or personal care items also determine spending. Opting for premium brands or frequent purchases leads to higher expenditures. Conversely, a frugal approach can reduce overall living costs, allowing for greater financial flexibility. These preferences directly influence disposable income after covering essential expenses.

Household size and composition influence expenses. Households with children face additional costs for childcare, ranging from several hundred to over a thousand dollars per month depending on age and type of care. Educational expenses, whether for public school supplies or private school tuition, also contribute to the family budget. Healthcare costs increase with more dependents, including additional insurance premiums and out-of-pocket medical expenses.

Existing debt obligations are a fixed financial burden to factor into a cost of living assessment. Monthly payments for student loans, credit card balances, and auto loans reduce income available for other expenses. Managing these debts effectively helps maintain financial stability and impacts affordability. High debt levels can constrain discretionary spending and affect the ability to cover essential costs.