Is Tennessee actually affordable, or is it just hype? Everyone says, Tennessee’s cost of living index But compared to other southern states, where does it really stand? Texas, Georgia, Florida—there are plenty of options. If you’re planning a move or just want to see if you’re getting a good deal, you need hard numbers. Housing, groceries, utilities—everything adds up. Let’s see how Tennessee stacks up.
Tennessee’s Cost of Living Index: Breaking It Down
Tennessee has built a reputation for being budget-friendly. But the cost of living varies depending on where you live. Nashville is way different from a small town like Johnson City.
The overall cost of living index for Tennessee sits about 10% lower than the national average. But what does that mean for your wallet? Let’s dig deeper into each category.
Housing Costs in Tennessee
Housing is usually the biggest piece of anyone’s budget. In Tennessee, it’s cheaper than in Florida or Texas, but it depends on the city.
- Nashville: Prices have skyrocketed. The median home price is pushing past $400,000, and rent isn’t cheap either.
- Memphis: Way more affordable. The median home price is around $200,000, and rent is reasonable.
- Knoxville & Chattanooga: Somewhere in the middle. You get more for your money than in Nashville but still higher prices than smaller towns.
If you’re looking strictly for affordability, Memphis and smaller cities like Clarksville offer bigger savings.
Taxes in Tennessee: More Savings?
Tennessee stands out for zero state income tax. That’s a big win compared to states like Georgia and North Carolina, where state tax eats into your paycheck.
But here’s the catch—higher sales taxes. Tennessee’s state sales tax is 7%, and local taxes push it even higher, making everyday spending pricier.
Grocery & Utility Costs
Food prices in Tennessee are about average for the South. You won’t see extreme prices like New York or California, but you’re also not getting the deep grocery discounts of some Midwest states.
Utilities? That’s another story. Tennessee is actually cheaper than the U.S. average for electricity, mainly due to TVA providing low-cost power. But expect higher costs in the winter if you’re relying on electric heating.
Comparing Tennessee to Other Southern States
How does Tennessee rank against Texas, Georgia, and Florida?
| State | Overall Cost of Living Index | Median Home Price | State Income Tax |
|---|---|---|---|
| Tennessee | 90 (10% lower than national avg.) | $300,000 | 0% |
| Texas | 92 | $350,000 | 0% |
| Florida | 102 | $400,000 | 0% |
| Georgia | 94 | $350,000 | 1%–5.75% |
Texas and Florida are both slightly more expensive than Tennessee. But Texas homeowners get hit with higher property taxes. Florida’s housing is pricier due to demand—especially near the beaches.
FAQs
Is Tennessee really cheaper than other southern states?
Yes and no. It depends on where you compare it. Tennessee offers low taxes and affordable housing (outside of Nashville). But sales tax is high, and groceries aren’t the cheapest.
Which Tennessee city offers the best affordability?
Memphis is by far the best deal for home buyers. Knoxville and Chattanooga also offer solid affordability compared to Nashville.
How much do I need to earn to live comfortably in Tennessee?
For a moderate lifestyle, a $50,000–$70,000 salary works in most parts of Tennessee except for Nashville, where you’ll need more.
Is Tennessee good for retirees?
Yes! No state income tax means Social Security and pensions go further. Plus, affordable housing in small towns makes it an attractive option.
Conclusion
The Tennessee cost of living index puts it lower than the U.S. average, but it depends on where you settle. For more insights on housing and real estate trends,
