Tennessee Cost of Living
Can you afford to live in the Volunteer State?
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Relocating to Tennessee brings the promise of vibrant city life, scenic landscapes and a welcoming community. For many, East Tennessee’s rolling hills or the energy of Nashville and Memphis offer an appealing new home. However, before making the transition, it’s important to know how your day-to-day expenses might shift — from rent and groceries to gas and health insurance.
To determine the cost of living in Tennessee, our team reviewed data from the U.S. Bureau of Economic Analysis to understand average spending. We also used recent sources to gather housing, food, transportation, health care and utility costs for a full picture of everyday expenses.
People in Tennessee spend $49,326 each year on goods and services, on average.
Jump to insightThe median rent in Tennessee is $1,362, versus the national median rent of $1,639.
Jump to insightResidents in Tennessee spend $270.45 weekly on food at home.
Jump to insightAs of August 2025, the average price per gallon of regular gas is $2.78 in Tennessee.
Jump to insightRecent data shows that employees in Tennessee pay $1,825 annually for employee-sponsored health insurance coverage.
Jump to insightThe average cost of living in Tennessee
According to the U.S. Bureau of Economic Analysis (BEA), the average annual per-person spending in Tennessee was $49,326 in 2023. This number represents what Tennesseans typically spend each year on housing, utilities, health care, food, transportation and other goods or services.
Here’s a breakdown of the largest spending categories in Tennessee:
| Category | Annual per-capita cost in Tennessee |
|---|---|
| Housing and utilities | $8,577 |
| Health care | $8,244 |
| Food and beverages for off-premises consumption | $3,576 |
| Gasoline and other energy goods | $1,423 |
| All other personal consumption expenditures | $27,506 |
| Total cost | $49,326 |
Housing costs in Tennessee
Housing typically takes up the largest share of a Tennessee household’s budget. Based on 2025 figures from Apartments.com, renters in Tennessee pay an average of $1,362 each month, which is lower than the national median rent of $1,639. Depending on which part of the state you choose, rental prices can fluctuate, with urban centers and popular suburbs generally costing more.
The U.S. Census Bureau’s 2023 American Community Survey breaks down average monthly rent in Tennessee by unit size:
- One-bedroom rent: $1,110
- Two-bedroom rent: $1,154
- Three-bedroom rent: $1,342
- Four-bedroom rent: $1,667
For those looking to buy a home, Tennessee’s median home price is $396,800, which is less than the U.S. median home price of $446,638.
Property taxes can influence your total housing expenses. Tennessee’s effective property tax rate is 0.49%.
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Food costs in Tennessee
How much you spend on groceries and meals in Tennessee will depend on your shopping habits and dining preferences. According to the latest U.S. Census data, the average household in Tennessee spends $270.45 per week on groceries, compared with the U.S. average of $270.21.
Families who enjoy preparing meals at home might see their grocery budget go farther, especially if they shop at discount stores or local markets. Dining out — especially in Tennessee’s larger cities or popular tourist spots — tends to push food costs higher. In contrast, smaller towns and rural communities often offer lower prices both in stores and at restaurants.
Transportation costs in Tennessee
Gas prices and auto insurance are key transportation costs for Tennessee residents. The average price for a gallon of regular gas is $2.78, compared with the U.S. average of $3.13.
For car owners, the average auto insurance premium in Tennessee is $1,061.22, while the national average is $1,258. These expenses are important to factor into your monthly transportation budget.
Health care costs in Tennessee
The typical annual employee contribution for employer-sponsored health insurance in Tennessee is $1,825, with employers paying the remaining $5,833 of the $7,659 total premium.
Nationally, employees contribute an average of $1,640 toward a premium of $8,182. For many Tennessee families, these health care costs are a significant part of the household budget.
Utility costs in Tennessee
For Tennessee households, the average monthly electric bill is $135.22, compared with a national average of $136.84.
Natural gas prices in Tennessee average $10.31 per thousand cubic feet, while the U.S. average is $12.92. These utility costs can impact your overall housing expenses.
FAQ
Does Tennessee have a high cost of living?
No, Tennessee does not have a high cost of living. Most essential expenses — like housing — are less than what people pay in many other states.
Is Tennessee a good place to live?
Yes, Tennessee is a good place to live if you are looking for a state that attracts a lot of new residents and offers a lower cost of living. Tennessee’s current popularity is a result of its affordability and overall quality of life, making it an appealing choice for people seeking both urban excitement and small-town charm.
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Is Tennessee good for renters?
Yes, Tennessee is good for renters. Renters in Tennessee often find more affordable homes than in many other states, and the quality of life for renters is high.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Apartments.com, “Rent Trends.” Accessed Aug. 20, 2025.
- Redfin, “Redfin Data Center.” Accessed Aug. 20, 2025.
- Tax Foundation, “Where Do People Pay the Most in Property Taxes?” Accessed Aug. 20, 2025.
- United States Census Bureau, “Week 63 Household Pulse Survey: October 18 - October 30.” Accessed Aug. 20, 2025.
- AAA Gas Prices, “State Gas Price Averages.” Accessed Aug. 20, 2025.
- National Association of Insurance Commissioners, “2021/2022 Auto Insurance Database Report.” Accessed Aug. 20, 2025.
- KFF, “Average Annual Single Premium per Enrolled Employee For Employer-Based Health Insurance.” Accessed Aug. 20, 2025.
- U.S. Energy Information Administration, “2023 Average Monthly Bill- Residential.” Accessed Aug. 20, 2025.
