Cost of Living in Tennessee: Can You Afford the Volunteer State?

Thinking about moving to Tennessee? Whether you’re drawn to the country music scene in Nashville, the scenic beauty of the Great Smoky Mountains, or the affordable lifestyle, Tennessee has a lot to offer. But before you pack your bags, it's essential to understand the cost of living in Tennessee and whether it fits your budget. This guide breaks down housing costs, taxes, groceries, transportation, utilities, and more to help you determine if you can afford to live in the Volunteer State.

1. Overview: How Affordable is Tennessee?

Tennessee is known for its low cost of living compared to other states. It ranks as one of the most affordable states in the U.S., making it a great option for families, retirees, and young professionals looking for lower expenses without sacrificing quality of life.

📌 Key Takeaways:
✔️ Overall cost of living is 10% lower than the national average
✔️ Housing is 20-30% cheaper than in major metro areas like New York or California
✔️ No state income tax, meaning more take-home pay
✔️ Sales tax is high (9.55%), which impacts groceries and daily expenses

💡 Pro Tip: Tennessee is one of the fastest-growing states due to its affordability and job opportunities, so expect housing prices to rise in the coming years.

2. Housing Costs: Renting vs. Buying in Tennessee 🏡

Renting in Tennessee

Renting in Tennessee is cheaper than the national average, but prices vary based on location.

📌 Average Rent in Tennessee (2025 Estimates):
✔️ Nashville: $1,660/month (1-bedroom apartment)
✔️ Memphis: $1,200/month (1-bedroom apartment)
✔️ Knoxville: $1,300/month (1-bedroom apartment)
✔️ Chattanooga: $1,500/month (1-bedroom apartment)

💡 Pro Tip: If you want affordable rent, avoid Nashville’s city center and look for housing in Murfreesboro, Clarksville, or Franklin, which are growing suburbs with lower costs.

Buying a Home in Tennessee

Tennessee is one of the best states for affordable homeownership, but prices are rising due to high demand.

📌 Median Home Prices in Tennessee (2025):
✔️ Nashville: $450,000 - $500,000
✔️ Knoxville: $320,000
✔️ Memphis: $250,000
✔️ Chattanooga: $300,000

💡 Pro Tip: If you’re looking for affordable housing, cities like Johnson City, Kingsport, and Cookeville offer homes under $275,000.

3. Tennessee Taxes: No State Income Tax = More Money for You! 💰

One of the biggest financial advantages of living in Tennessee is no state income tax, meaning you keep more of your paycheck compared to states like California or New York.

📌 Tennessee Tax Breakdown:
✔️ No state income tax on wages
✔️ Sales tax: 9.55% (higher than the national average)
✔️ Property tax: 0.68% (lower than the national average)

💡 Pro Tip: Even though Tennessee has high sales tax, low property taxes and no state income tax make up for it, especially for homeowners and high earners.

4. Cost of Utilities & Groceries in Tennessee 🛒

Utilities and groceries in Tennessee are affordable compared to national averages, but costs vary by city.

📌 Average Monthly Utility Bills in Tennessee:
✔️ Electricity: $190/month (higher in the summer due to A/C use)
✔️ Water: $35 - $50/month
✔️ Internet: $60 - $100/month (varies by provider)

📌 Grocery Costs in Tennessee (Monthly Averages):
✔️ Single person: $300 - $400/month
✔️ Family of four: $900 - $1,200/month

💡 Pro Tip: If you want lower grocery bills, shop at ALDI, Kroger, or local farmers’ markets instead of Publix, which is more expensive.

5. Transportation Costs in Tennessee 🚗

Tennessee is a car-dependent state, meaning transportation costs are an important factor to consider.

📌 Average Transportation Costs in Tennessee:
✔️ Gas Prices: $3.00 - $3.50/gallon (varies by location)
✔️ Car Insurance: $1,500/year (lower than the national average)
✔️ Public Transit: Only available in major cities like Nashville, Memphis, and Knoxville.

💡 Pro Tip: If you want to save on gas, consider living in walkable neighborhoods like downtown Nashville or Chattanooga, where you can bike or take public transit.

6. Healthcare Costs in Tennessee 🏥

Healthcare in Tennessee is slightly below the national average, making it affordable for families and retirees.

📌 Average Monthly Health Insurance Costs in Tennessee (2025):
✔️ Single adult: $400 - $600/month
✔️ Family of four: $1,200 - $1,800/month

💡 Pro Tip: Cities like Nashville and Memphis have some of the best hospitals in the U.S., including Vanderbilt University Medical Center.

7. Best & Cheapest Places to Live in Tennessee

If you’re looking for affordable living in Tennessee, check out these cheaper cities with great quality of life.

📌 Most Affordable Places to Live in Tennessee:
✔️ Johnson City – Low home prices, great healthcare, and a small-town feel.
✔️ Clarksville – Close to Nashville, but rent is 30% lower.
✔️ Kingsport – One of the cheapest cities in Tennessee with low property taxes.
✔️ Cookeville – Growing economy and affordable housing.

💡 Pro Tip: Avoid downtown Nashville and Knoxville if you’re on a budget, as prices are rising fast!

Final Thoughts: Can You Afford to Live in Tennessee?

✅ Tennessee is one of the most affordable states to live in, especially if you’re looking for low taxes, cheap housing, and a strong job market.

However, consider the following before moving:
✔️ Housing is affordable, but prices are rising fast in cities like Nashville and Chattanooga.
✔️ No state income tax saves you money, but high sales tax impacts daily expenses.
✔️ Utility and grocery costs are reasonable, but gas prices and transportation costs can add up.

Is Tennessee Right for You?

✔️ YES if you want low taxes, affordable housing, and job opportunities.
❌ Maybe Not if you prefer big-city living without a car or don’t like humid summers.

🌟 Thinking about moving to Tennessee? Contact us today to find your dream home and start your new life in the Volunteer State! 🌟

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