Average Salary in Tennessee: Can You Afford the Cost of Living in Tennessee?
Even if most states in the United States have similarities, one thing that differentiates them is the cost of living. If you intend to move to a state like Tennessee, you should know about the cost of living in Tennessee. Factors that may affect the cost of living in a state include healthcare, grocery, and transportation costs.
This guide will highlight the cost of living in Tennessee and answer the question, “what is a good salary?” It will also include a salary comparison by city to help you choose the most affordable place to move to and discuss the average rent in Tennessee, including average house prices, just in case you were thinking of moving to this state for the long term.
What to Know Before Moving to Tennessee
The first thing you need to know, aside from the cost of living in Tennessee, is the job growth rate in the state. According to the US Bureau of Labor Statistics, Tennessee has a civilian labor workforce of over 3.1 million people. The unemployment rate in this state was 3.3 percent in May 2022, which was about the same as in previous months.
The most prominent industries in Tennessee include healthcare, entertainment, finance, and transportation. However, this state is mostly known for its music industry. A lot of famous singers, like Dolly Parton and Aretha Franklin, started their music careers in Tennessee. Also, Elvis Presley lived in Memphis. So, if you want to get involved with the music industry, this state could be the place to start.
What Is the Cost of Living in Tennessee?
The average cost of living in Tennessee is $37,499 per year according to the Bureau of Economic Analysis. Tennessee is one of the cheapest places to live in the US. Also, in the third quarter of 2021, Tennessee was named the sixth-most affordable state in the United States based on MERIC data. With some of the lowest costs around, Tennessee will likely give you the opportunity to save some money as well as enjoy everything this state has to offer.
How Is Cost of Living Calculated?
Generally, the cost of living is calculated by adding up your monthly expenses. In other words, to calculate your cost of living, you would add up the prices of all the services and goods you spend money on in a given month. Some of the expenses taken into account when considering the cost of living are housing costs, food prices, and healthcare expenses. The cost of living is calculated from basic needs per month and not luxuries.
What Contributes to Cost of Living in Tennessee?
Average Rent in Tennessee
Rent is one of the most important factors that goes into the cost of living in Tennessee. The average monthly rent in Tennessee is much lower than the national average. How much you will pay for rent will depend on the type of house or apartment you want to live in. For example, a studio in Tennessee can cost $717 and a four-bedroom house $1,512 per month.
While this is the average rent, some areas can be more expensive. For example, Germantown apartments will cost you $1,561 per month. However, the cheapest rents are found in Oak Ridge, where apartments can be rented for $775 per month.
Average Transportation Costs in Tennessee
The average price of gas in Tennessee in July 2022 was $4.22 per gallon, so it can be quite expensive to have a car. Even though public transport is widely available, annual transportation expenses in Tennessee are higher than in most states. According to MIT’s Living Wage Calculator, one individual pays around $4,758 per year on transportation, which comes out to about $397 per month. A family of four pays around $12,965 per year or $1,080 per month.
However, using public transportation reduces this cost drastically. In major cities, there are many public transportation options. The cost of public transportation is cheaper in Knoxville, where residents spend just $540 per year. This isn’t the case in Nashville, where residents spend around $780 on public transportation alone. Generally speaking, the cost of transportation increases depending on the city and the number of people in a household.
Average Food Costs in Tennessee
The average cost of food in Tennessee is $3,428 per year for a single person. This means that residents of Tennessee spend an average of $285 per month on food. For a household with two adults and two children, the food costs can reach up to $6,285 per year.
Eating out can also be quite expensive. According to the US Bureau of Labor Statistics, residents of the South can spend as much as $2,732 per year on restaurants and takeaway food.
Average Healthcare Costs in Tennessee
When it comes to the cost of healthcare, Tennessee can be quite expensive. It can cost $5,040 to cover healthcare costs for a whole year. The real figure may be higher than this sum, depending on your particular circumstances. For example, you will pay more for health insurance if you have a preexisting medical condition or an injury. The same applies to larger families. The cost of healthcare rises with more kids in a household.
Average Utility Costs in Tennessee
The cost of utilities in Tennessee can be quite high. According to the US Energy Information Administration, electricity costs 11.64 cents per kilowatt hour. Water bills cost $43, and cable and Internet monthly costs can reach $122. The cost of electricity in Tennessee is higher than the national average.
Also, those who live in apartments rather than own homes may spend more on bills and utilities. Those who live in Nashville apartments pay around $159.32 per month for their electricity bills, which is far higher than the national average and the average cost of electricity in the state.
Other Expenses to Consider in Tennessee
Some other living expenses to consider include movie tickets, taxes, and parking fees. Movie tickets in Tennessee cost an average of $21, while parking in Nashville costs $2.25 per hour in places like the Central Business District. In some areas, parking is as cheap as $1.75 per hour. When it comes to taxes, Tennessee does not collect personal income tax.
Should I Buy or Rent in Tennessee?
There are arguments for and against renting vs buying a house in Tennessee. Rent is cheaper in some cases, but if you pay an average of $1,512 per month, you would have spent $18,144 per year and $36,288 after two years. This can be quite costly in the long term. This is why people who want to settle in Tennessee are encouraged to buy a house instead.
Real estate is not without its own high costs. The median home cost in Nashville is $316,117. This seems simple enough, but it comes with a catch. Nashville’s property taxes are about 25 percent of the property’s appraised value. This means you will have to pay around $79,029 in taxes. However, if you do decide to buy a home, you can always make money on Airbnb by renting it out, which can help you cover your tax payments and other housing expenses.
What Is the Average Salary in Tennessee?
According to ZipRecruiter, the average annual income in Tennessee is $62,477. This means that the average hourly rate is $30.04, so you can make $1,201 per week and $5,206 per month.
Salary Comparison by City in Tennessee
What Is a Good Salary?
A good salary in Tennessee is anything above $37,499 since this is the cost of living in this state. Therefore, with annual salaries of around $62,477, Tennessee residents can live comfortably and have extra money to spend on utilities and other personal expenses like outdoor activities and other entertainment options.
A good salary is also determined by where you choose to live in Tennessee. This is mostly because of the cost of living, local job demand, and the tax rate in different areas. For instance, by learning how to become a software engineer, you can earn more than six figures in the biggest cities, including Nashville and Memphis.
Can You Afford the Average Cost of Living in Tennessee?
You can afford the average cost of living in Tennessee if you make more than $37,499 per year. However, this cost can increase if you have a family. In that case, you would want your family’s total take-home pay to exceed the average household income in the state. This will ensure that your family lives comfortably, even if you live in one of the more vibrant cities.
Also, depending on whether you live in the city or on the outskirts of town, your living costs may increase or decrease. To ensure you lead a comfortable life and are able to spend money on the things you enjoy doing, you should have a look at the cost of living for the specific area where you want to live.
Cost of Living in Tennessee FAQ
The average cost of living in Tennessee is $37,499 per year. Tennessee is an affordable state to live in. However, healthcare payments can be more expensive than in other regions, and it can be difficult to find affordable housing in some regions. For a more precise estimate of your cost of living, use a cost of living index or cost of living calculator.
Ordinarily, $37,499 per year should cover your expenses in Tennessee. However, to really live comfortably, you need to earn an average salary of $80,548 per year to be able to cover other miscellaneous costs you might have. This figure takes into account the cost of healthcare, which is higher than the national average, as well as the property taxes you’ll owe if you buy a house.
Yes, Tennessee is a cheap state to live in. The state has the sixth-lowest cost of living in the US. It has a low unemployment rate and a growing economy. Some popular cities are costlier than the less major cities, but Tennessee generally has affordable options for its residents, including reasonable housing prices and a relatively low annual cost of groceries.
Yes, it is worth it to move to Tennessee if you earn over $37,499 per year. You can enjoy a good quality of life in this state, and if you are a student, there are high-quality schools and a wide range of prestigious universities in Tennessee, including Vanderbilt University, Belmont University, and the University of Memphis. The state also boasts affordable food but has high healthcare costs. Also, your cost of living will increase as you add more children to your family.