How Do We Determine Cost Of Living?
The cost of living for any given area is made up of a comparison of the average salary available compared to the average cost of the biggest expense categories that affect a family in Tennessee.
For purposes of this article, the cost of living takes into effect the cost of entertainment, food, healthcare, housing, transportation, and utilities.
Is Tennessee Expensive To Live In?
Generally speaking, Tennessee is a very inexpensive state in which to live. Depending on which site you look at, the cost of living in Tennessee consistently ranks in the top ten lowest-cost states in which to live.
If you’re looking at the total tax burden, the ranking gets even better, as Tennessee is consistently ranked within the top three lowest tax-burdened states in the entire country.
Simply put, Tennessee is NOT an expensive place to live in, and your money goes a lot longer in Tennessee than in the majority of states in the United States!
Average Salary In Tennessee
If the state of Tennessee were to have one main financial downfall, it would be the average household income. While the vast majority of expenses in Tennessee are cheaper than in other states, the earning opportunity is also lower, on average.
According to the World Population Review, the median household income in the United States is approximately $66,000.
Comparatively, the state of Tennessee ranks 41st out of all 50 states with a median household income of $53,320, which is clearly lower than the national average.
So, while Tennessee does have a lower average household income than most other states, it also has one of the lowest costs of living available in the country.
With this in mind, when looking at the state of Tennessee from a purely financial standpoint, it could be seen as a wash between income and expenses, so you really need to weigh the pros and cons for yourself based on other factors that weigh into “quality of life” for you.
Something to keep in mind, when looking at the average salary in Tennessee, is the fact that cities like Nashville and Knoxville are some of the most desirable, up-and-coming urban areas that do provide a better opportunity to create a strong income.
Not to mention, the rise of “work from home” opportunities has seemingly removed physical boundaries to where people can work, so there is always the possibility of getting a job outside of Tennessee that pays better and allows you to work remotely.
Costs In Tennessee
Cost of living compared to other locations:
Housing Costs In Tennessee
The Average Cost of a House in Tennessee
The median cost of a house in Tennessee is currently around $230,000, while home values have appreciated over 8% in the last ten years.
Keep in mind, though, that the state of Tennessee is made up of three very unique regions, and the price of houses varies greatly, depending on which part of Tennessee you’d like to be in.
The most expensive houses can be found for over $1M on average in Brentwood (a suburb of Nashville), while you can also find a move-in-ready house in some of the more rural areas for under $200,000.
While you can find very expensive property in the more urban areas, or on any of the beautiful bodies of water in the state, Tennessee still does offer some of the most affordable houses available in the entire country, on average.
The Average Cost of Property Tax in Tennessee
One of the biggest reasons that people choose to reside in the great state of Tennessee is the low cost of property tax!
According to 2019 Census data, Tennessee boasts the 15th lowest property tax rate of all fifty states, at 0.71% (effective rate). With the highest rate of 2.49% (New Jersey), this rate offers a substantial advantage when considering buying a home, or even investment property in the state of Tennessee.
The Average Cost of Rent in Tennessee
Tennessee is one of the twenty-one states in the country that can claim an average rent cost of lower than $1,000 per month.
With a median rent cost of $869 per month, Tennessee ranks right in the middle of the pack with the 22nd lowest rent cost.
Similar to the cost of houses mentioned previously, the cost of rent in Tennessee will vary wildly, depending on if you’re in the bigger urban areas or the rural outskirts of the state. Each one provides unique benefits, and it simply comes down to what sort of lifestyle suits you the best!
Utility Costs In Tennessee
According to RentCafe.com, utility costs in Tennessee (electricity, gas, water, sewer, cable, and internet) total $397 per month, which ranks as the 18th most expensive state in the country.
What is the Average Electric Bill in Tennessee?
As one of the most fiscally responsible states in the country, there are bound to be certain expenses that are higher than others to make up for everything else being so cheap.
Apparently, one such expense category that ends up being higher than the national average is the average electric bill.
For context, Tennessee can brag about its ranking as the 14th lowest electricity RATE, but when you multiply that lower rate with the average usage in the state, the fine state of Tennessee drops to 38th in “effective usage”.
Studying the list of the most expensive states in terms of their electric bill, we’ve noticed that the most expensive electric bills belong to states that endure drastic hot or cold weather since the HVAC units are sent into overdrive in these sorts of states.
As you can see in our analysis of the weather in Tennessee, it is one of the hotter states in the country, which is a breath of fresh air for those Northerners looking to escape harsh winters, but also inherently skyrockets the electric bill.
Since everything else in Tennessee is inexpensive, feel free to hedge yourself against a high electric bill by spending your spring and summer months in any of the beautiful, clean bodies of water that make Tennessee one of the most beautiful states in the country!
Average Natural Gas Bill in Tennessee
At $64 per month, Tennessee ranks as the 13th cheapest state in terms of a homeowner’s average natural gas bill. Depending on where in the state you live, you may find that natural gas is not available for your home, with a more dated option of a propane tank (whether it’s buried or above ground) as your only option in certain older parts of the state.
Average Water Bill in Tennessee Per Month
Coming in as the 14th most expensive state in the country, the average Tennessean will find themselves paying $43 per month for their water bill.
Transportation Costs In Tennessee
What is the Average Cost of Gas in Tennessee?
Since this is an impossible cost to keep up with, in that it changes so often, we would like to invite you to check out what our friends at Gas Buddy have to say on their website since they’re tied into user-submitted pricing at any given time.
At the time of this writing, Tennessee ranks as the 21st cheapest gas price in the country, just 6.7% higher than the cheapest gas (Oklahoma), and only 67% the cost of the most expensive (California — click here to read about why you should consider relocating to Tennessee from California)