Tennessee, known as the "Volunteer State", is a booming no-income-tax state with affordable living and strong job growth. Here is everything you need to know about the cost of living in the Volunteer State — from housing and groceries to taxes, utilities, childcare, and what salary you actually need.
Here is what a typical month costs in Tennessee for a single person earning the median income of $59,700/year:
Each category shows how Tennessee compares to the national average. Green means cheaper, yellow means similar, orange/red means more expensive.
Adjust your salary to see a detailed monthly budget breakdown for living in Tennessee.
Select a state to see how much salary you would need there to maintain the same lifestyle you have in Tennessee.
The most popular cities for residents and newcomers in Tennessee:
Housing is the single biggest expense in Tennessee, as it is everywhere. The median home price in Tennessee is $375,000, and the median rent for a one-bedroom apartment is $1,100/month. With a housing cost index of 79, Tennessee housing is 21% cheaper than the national average.
Housing in Tennessee is a genuine advantage. The low cost of housing frees up income for savings, investments, and discretionary spending that residents of expensive states simply cannot afford.
Tennessee is one of only 9 states with no state income tax. This is a major financial benefit — a household earning $59,700 saves approximately $3,582/year compared to a state with a 6% income tax rate. This extra take-home pay effectively reduces your cost of living and increases your purchasing power.
The average single person in Tennessee spends approximately $390/month on groceries. A family of four can expect to spend $975-$1,170/month. The food cost index of 95 means groceries in Tennessee are 5% below the national average.
Gas prices in Tennessee average $3/gallon. For the average commuter driving 15,000 miles/year at 25 MPG, that is roughly $1,800/year in fuel costs.
Tennessee healthcare costs are 9% below the national average (index: 91). The average annual healthcare cost per person in Tennessee is approximately $5,460 including premiums and out-of-pocket expenses. Employer-sponsored health insurance covers the majority of working adults.
Infant daycare in Tennessee averages $800/month ($9,600/year). This is below the national average, making Tennessee more family-friendly from a financial perspective. Many families in Tennessee find that one parent staying home is more cost-effective when two or more children need daycare.
Tennessee offers a solid balance of cost, opportunity, and quality of life. With costs near the national average, you get the added benefit of no state income tax, access to growing job markets in Nashville and Memphis, and a cost of living that leaves room for saving and investing.
See all Tennessee financial calculators:
Tennessee (TN) has a cost of living index of 91, meaning it is 9% cheaper than the US average. Housing is the biggest factor with an index of 79. The median rent is $1,100/month and the median home price is $375,000. Tennessee ranks #17 out of 50 states for affordability (1 = cheapest).
For a single person, a comfortable salary in Tennessee is approximately $77,610/year ($6,468/month). For a family of four, aim for $131,340/year. This covers housing at 30% of income, groceries ($390/mo), transportation, healthcare, and a 15% savings rate. The median household income in Tennessee is $59,700.
The median rent for a one-bedroom apartment in Tennessee is approximately $1,100/month. A two-bedroom averages $1,485/month. Rent varies significantly by city: Nashville, Memphis, Knoxville are the most popular metro areas. Housing in Tennessee is affordable compared to the national average.
Tennessee is an excellent choice for affordability. With a cost of living 9% below the national average and median rent of just $1,100/month, your money goes significantly further here. The lack of state income tax is an additional major benefit. Top cities include Nashville, Memphis, Knoxville.
The most affordable areas in Tennessee are typically smaller cities and rural areas away from the major metros. Within Tennessee, costs can vary 20-40% between the most expensive city (Nashville metro) and more affordable areas. Chattanooga and Murfreesboro tend to offer lower costs while still providing good amenities and job opportunities.
The average monthly grocery bill in Tennessee for a single person is approximately $390 ($975 for a family of four). Tennessee food costs are 5% below the national average. Shopping at Walmart, Aldi, and local discount stores can reduce this by 15-25%.
The average monthly electric bill in Tennessee is approximately $135. Total utilities (electric, gas, water, internet) average $297/month. Tennessee utilities are 3% below the national average. Utility costs are manageable for most households.
Tennessee has NO state income tax, saving the average household $2,985-$4,776/year compared to states with typical income tax rates. This is one of only 9 states with no income tax. However, Tennessee may collect more revenue through sales tax or property tax.