What Is the Cost of Living in Tennessee? - SmartAsset

Tennessee is packed with a country and blues culture that’s centered around Nashville and Memphis. When it comes to the cost of living in the state, most costs are below the national average but home prices can be high, depending on where you live. Residents also spend more than the national average on utilities. If you’re planning a move soon then you can work with a financial advisor to properly prepare your finances.

Housing Costs in Tennessee

The median home value in Tennessee is $419,994, according to Redfin. These reports also indicate that there isn’t much upward variation around Tennessee’s largest cities. In Nashville, the median home value is $405,000, while Knoxville’s is slightly higher at $332,224.

Tennessee homes have seen good appreciation rates recently. As a matter of fact, NeighborhoodScout reports show that from 2013 to 2018, home values have risen by 6.43% annually. If you condense these numbers for just 2016 to 2018, the annual appreciation rates expand to 7.71%. Prices have risen 36.15% in the last two years and 160.71% since 2000.

The average rent for an apartment in Tennessee is $1,730. A two-bedroom home in Nashville averages out to be $1,510 and a one-bedroom’s average is $1,341, according to a study by Apartment List.

Cost of Utilities

According to the U.S. Energy Information Administration (EIA), the average monthly energy bill in Tennessee is $123.30, which is slightly above the national average. Numbeo.com data shows what the average monthly utility bills for a 915 square-foot apartment cost in Tennessee’s largest cities. In Nashville, residents can expect to pay $159.32, while $145.29. For comparison, the national average is $151.96.

Food Costs

The Living Wage Calculator from MIT lists a $22,369 living wage for a single adult in Tennessee. Of that income, about $2,994, or 13.4% goes to food. This estimation jumps to 15.2% for a family of two adults and two children, as MIT calculates a family of this size will spend $8,822 on food out of a $58,199 living wage.

Individual food prices vary by city. According to Numbeo.com (2019), a gallon of milk and a dozen eggs goes for $3.21 and $2.48, respectively, in Memphis. Chattanooga residents pay slightly less, as a gallon of milk there is $3.09 and a dozen eggs is $1.92.

Healthcare Costs

In much of Tennessee, healthcare costs come out right around the national average. According to a study by the Health Care Cost Institute, prices in the Nashville metro area sit at 7% above the U.S. median, whereas the Chattanooga metro area is 4% below that mark. The major outlier in the state is Knoxville, which boasts prices 16% less than the national median.

Cost of College Education

Want to pursue higher education in Tennessee, for yourself or your child? The highly ranked Vanderbilt University estimates its tuition and fees to total $84,412. That doesn’t even include the $934 First Year Experience Fee.

If you fear student loans, there are less expensive options in the Volunteer State. For example, there’s the University of Tennessee Knoxville, where in-state tuition is $13,224 for 2018-2019, compared to $31,664 for out-of-state students.

Taxes in Tennessee

Tennessee’s state tax system has been called the most regressive in the nation. A study by economists at the Federal Reserve found that Tennessee’s tax regime offsets 32.7% of the progressiveness of the federal tax code. In other words, the federal tax system aims to get wealthier folks to pay a higher percentage of their income in taxes. But when you add in the Tennessee state taxes, the inequality-compressing effect of the federal tax system is lessened by 32.7%.

There is no state income tax in Tennessee. Tennessee’s sales tax ranges from 8.5% to 9.75%, depending on the county in which you’re shopping. So although the base state sales tax is 7%, counties impose extra rates that range from 1.5% to 2.75%.

Miscellaneous Cost of Living Facts for Tennessee

Tennessee has plenty of attractions to keep tourists and residents happy. For one thing, there’s Graceland, Elvis Presley’s home. A ticket to Graceland will cost you $41 for the cheapest option.

Tennessee also has options for nature lovers. Admission to Great Smoky Mountains National Park is free. If you want to camp in the park, you’ll pay between $14 and $23 per night. Admission to the National Civil Rights Museum in Memphis is $15 for adults. The Hunter Museum of American Art in Chattanooga and the Frist Center for Visual Arts in Nashville are also $15.

The Bottom Line

Tennessee has traditionally been one of the more affordable states in the U.S. to live in across the board but the real estate costs have increased dramatically over the past several years. College tuition hasn’t increased much recently and there is no state income tax. All things considered it could be a great place to live but you should plan ahead and take all costs into account.

Tips for Planning Your Finances

A financial advisor can help you navigate big life changes like a cross-country move, or just help you to meet general financial goals like saving for retirement. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
For an overview of some of the top financial advisor firms in the state, stop by our lists for Chattanooga, Nashville, Knoxville and Memphis.
Georgia has a plethora of local banks where new residents can move their money to. Here are some options: SmartBank, CapStar Bank, Andrew Johnson Bank, Triumph Bank and First Century Bank. Be sure to pay attention to important factors like interest rates, ATM access and overdraft fees.