As more people look to escape the high costs of living in major U.S. cities, Tennessee continues to rise as a top relocation destination. With no state income tax, affordable housing, and a lower-than-average cost of living, the Volunteer State is attracting remote workers, families, and retirees alike.
But what is the actual cost of living in Tennessee, and how does it vary by city and lifestyle? In this guide, we’ll break it all down, from housing and utilities to food, healthcare, and transportation. Whether you’re considering Nashville, Memphis, or a smaller town, you’ll walk away with a clear picture of what it truly costs to live in Tennessee.
Is Tennessee an Affordable State?
Yes. Tennessee ranks among the top 10 most affordable states in the U.S. Its cost of living index is around 89.5, meaning it’s about 10% cheaper than the national average.
Key advantages include:
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No state income tax
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Low property taxes
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Affordable housing in most cities
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Lower healthcare and grocery costs compared to national averages
However, the overall affordability can vary significantly between urban centers and rural areas.
Cost of Living Breakdown by Major Cities
Let’s look at how costs compare in Tennessee’s most popular cities:
1. Nashville
Nashville is Tennessee’s capital and fastest-growing metro area. It offers vibrant culture, a strong job market, and world-famous music scenes but with a higher cost of living.
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Median Home Price (2025): $435,000
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Average Rent (2-bedroom): $1,850/month
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Utilities (electric, water, internet): ~$240/month
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Monthly Transportation (car insurance + gas): ~$550
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Groceries & Dining (per person): ~$450/month
Nashville is more expensive than other Tennessee cities but still more affordable than similarly sized metros like Austin or Denver.
2. Memphis
Located in West Tennessee, Memphis is known for its music, food, and rich history. It’s also one of the most affordable big cities in the U.S.
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Median Home Price: $255,000
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Average Rent (2-bedroom): $1,150/month
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Utilities: ~$220/month
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Transportation: ~$500/month
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Groceries & Dining: ~$400/month
Memphis is budget-friendly, but some areas may have higher crime rates, so it’s important to research neighborhoods carefully.
3. Chattanooga
Chattanooga combines natural beauty with urban convenience. It’s gaining popularity for its gig-speed internet, outdoor recreation, and strong remote work culture.
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Median Home Price: $310,000
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Average Rent: $1,350/month
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Utilities: ~$210/month
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Transportation: ~$500/month
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Groceries & Dining: ~$420/month
Ideal for digital nomads and families looking for affordable living with great quality of life.
4. Knoxville
Knoxville is a college town with a mix of small-town charm and big-city amenities. Located near the Smoky Mountains, it’s perfect for outdoor lovers.
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Median Home Price: $295,000
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Average Rent: $1,300/month
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Utilities: ~$210/month
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Transportation: ~$480/month
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Groceries & Dining: ~$400/month
Knoxville offers balance: affordable housing, good schools, and a low cost of living.
5. Clarksville
Clarksville is one of the fastest-growing cities in Tennessee, thanks to its proximity to Fort Campbell and Nashville.
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Median Home Price: $285,000
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Average Rent: $1,200/month
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Utilities: ~$200/month
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Transportation: ~$470/month
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Groceries & Dining: ~$380/month
An excellent choice for military families, first-time homebuyers, or those commuting to Nashville.
Cost of Living by Lifestyle
Tennessee offers flexibility for various lifestyles. Let’s look at a few typical monthly budgets:
Single Professional (Living in Nashville)
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Rent (1BR apartment): $1,600
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Utilities & Internet: $220
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Food (groceries + eating out): $450
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Car payment + gas + insurance: $600
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Health insurance: $300
Total: ~$3,170/month
Family of Four (Living in Knoxville)
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Mortgage (3BR home): $1,700
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Utilities: $250
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Food (groceries + some dining): $750
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Transportation (2 cars): $1,100
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Health insurance: $600
Total: ~$4,400/month
Retiree Couple (Living in Chattanooga)
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Mortgage-free or low rent: $0–$800
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Utilities: $220
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Food: $500
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Healthcare: $700
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Transportation: $400
Total: ~$1,820–$2,300/month
Additional Cost Categories
Housing
Tennessee housing is 25%–35% below the national average, depending on the region. Nashville is the exception with prices trending higher due to demand.
Utilities
Thanks to the Tennessee Valley Authority, electricity is relatively cheap. Most households pay $180–$250/month for power, water, internet, and trash.
Groceries & Food
Groceries are 5–10% below U.S. average. Restaurants are also more affordable than in many major cities.
Transportation
Public transit is limited. Owning a vehicle is almost essential outside downtown cores. Gas prices are moderate, and car insurance is below the national average.
Healthcare
Tennessee has good access to care in urban areas. Health insurance costs depend on plan type and location but are comparable to national averages.
Taxes
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Income Tax: 0%
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Sales Tax: ~9.5% (state + local)
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Property Tax: ~$0.60–$0.80 per $100 of assessed value
FAQs: Cost of Living in Tennessee
Is it cheaper to live in Tennessee than in neighboring states?
Yes. Tennessee is more affordable than Georgia, North Carolina, and Virginia, particularly due to no income tax.
Which city in Tennessee has the lowest cost of living?
Smaller towns like Johnson City, Jackson, and Morristown have lower housing and food costs than big cities.
How much do you need to live comfortably in Tennessee?
For a single person, around $2,500/month is comfortable. A family of four typically needs $4,500–$5,000/month depending on location.
Are groceries expensive in Tennessee?
No. Grocery costs are slightly below average. Shopping at Aldi, Kroger, or Walmart helps keep expenses low.
Is Tennessee a good place to retire financially?
Absolutely. No state income tax, low property taxes, and affordable healthcare make it an excellent retirement destination.
Final Thoughts
Tennessee continues to offer some of the best value for money in the U.S. While costs are rising in areas like Nashville, the overall cost of living remains low especially when compared to national averages. From big cities to peaceful small towns, Tennessee caters to all lifestyles and budgets.
Whether you’re a digital nomad, a growing family, or a retiree, Tennessee provides affordability without sacrificing quality of life.
