When deciding where to live or buy a home, cost of living is one of the biggest factors to consider. Two states that often come up in relocation discussions are California and Tennessee — both beautiful and full of opportunity, but worlds apart when it comes to affordability.

Whether you’re comparing expenses for housing, taxes, or everyday necessities, understanding the real cost difference between these two states can help you make a confident decision.

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Housing Costs

Housing is where the biggest gap shows.

• California: Home prices here are among the highest in the nation. The state’s median home price is typically well above $700,000, and in cities like Los Angeles or San Francisco, that number can easily double. Renters also feel the pinch — monthly rents can exceed $2,500 in many areas.
• Tennessee: The difference is dramatic. The median home price in Tennessee sits around $350,000, and even in thriving cities like Nashville or Chattanooga, homeownership remains much more attainable. Rent averages roughly half of what you’d find in most major California metros.

Takeaway: In most cases, your housing dollar stretches twice as far in Tennessee as it does in California.

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Taxes

Taxes play a major role in day-to-day living expenses.

• California: Residents face one of the highest state income tax rates in the country, with brackets that can reach over 13%. Property taxes are moderate compared to some states, but the overall tax burden is significant when income and sales taxes are combined.
• Tennessee: One of the biggest financial advantages here is that Tennessee has no state income tax on wages. Property taxes are also lower than the national average, which makes long-term homeownership much more affordable.

Takeaway: Tennessee’s tax-friendly structure leaves more money in your pocket each month.

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Utilities and Transportation

• Utilities: Both states have similar utility costs, but Tennessee often comes out slightly lower due to cheaper electricity and milder winters in many regions.
• Transportation: Gas prices and car insurance rates tend to be higher in California. Tennessee drivers spend less at the pump and often pay lower premiums.

Takeaway: Day-to-day commuting and household expenses generally cost less in Tennessee.

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Groceries and Everyday Expenses

While grocery prices vary by city, Tennessee’s overall cost for food, dining, and household items is about 10–15% lower than California’s. Restaurant meals, entertainment, and services also tend to be more affordable.

Takeaway: You can enjoy the same lifestyle in Tennessee with a smaller monthly budget.

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Healthcare

Healthcare costs are slightly below the national average in Tennessee, while California sits a bit above it. Insurance premiums and medical services tend to be more affordable in Tennessee, especially for families or retirees.

Takeaway: Tennessee offers modest savings in healthcare, especially for long-term residents.

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Overall Cost of Living Comparison

Category	California	Tennessee
Housing	High	Affordable
State Income Tax	Up to 13%	0%
Property Tax	Moderate	Low
Utilities	Average to High	Below Average
Transportation	High	Lower
Groceries	Above Average	Below Average
Healthcare	Above Average	Average to Below Average
Overall Cost of Living	35–40% above U.S. average	10–15% below U.S. average

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Which State Wins?

If your goal is to save money, own a home, or build long-term wealth, Tennessee clearly comes out ahead. The combination of no state income tax, lower home prices, and affordable everyday expenses makes it an attractive option for both families and retirees.

However, California still offers strong career opportunities, diverse industries, and cultural benefits — but at a much higher cost.

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Final Thoughts

Relocating from California to Tennessee can mean cutting your living costs nearly in half, especially when it comes to housing and taxes. For many, this move opens the door to homeownership, financial stability, and a better quality of life.