Cost of Living in Memphis, TN

Cost of Living in Memphis, TN: A Detailed Overview

With a median household income of $41,228, residents of Memphis, TN earn $33,352 less than the national median of $74,580. What makes that figure meaningful is the local cost context: Memphis's cost of living index sits at 82.1, placing it significantly below the national baseline of 100. In practical terms, everyday expenses here run about 17.9 percent less than the U.S. average. The city is a large city of roughly 633,104 people, situated in the Southern United States. Even though raw incomes are modest, the lower cost base boosts effective purchasing power, meaning residents can afford more than the headline salary might suggest.

Housing Costs in Memphis

For renters, Memphis's housing market centers on a median monthly rent of $850, which lands $522 below the national median of $1,372. One-bedroom apartments typically run $740 per month, while two-bedroom units average $950. Those rates make the rental market here considerably friendlier than what tenants face in most American cities, freeing up income for savings and lifestyle spending. Shelter costs account for roughly 29 percent of the average household's total spending, confirming housing's role as the dominant budget line item. The rent-to-income ratio in Memphis stands at 24.7 percent — comfortably within the 30 percent ceiling that financial advisors recommend, leaving meaningful room for other financial priorities.

Monthly Expenses and Budget Breakdown

The total estimated monthly cost of living in Memphis comes to approximately $2,945, compared to a national average of roughly $4,357. That total spans housing, groceries, utilities, transportation, healthcare, entertainment, childcare, and local taxes. The biggest slice goes to housing at $850 per month, followed by childcare at $750. Groceries for a typical household run $310 monthly — below the national average, a small but consistent savings that adds up over the course of a year. Utility bills, covering electricity, gas, water, and internet, average $140, while transportation — fuel, insurance, maintenance, and any transit fares — runs $105. Healthcare costs average $390 per month, at or below the national figure of $450, offering some financial relief for residents with ongoing medical needs. Rounding out the budget, entertainment and dining average $100, and childcare averages $750 for families who need it.

How Memphis Compares to the National Average

Measured against the national baseline, Memphis sits 17.9 points below par on the cost of living index. That gap translates into roughly $1,412 in monthly savings — approximately $16,944 per year — compared to a household in an average-cost American city spending $4,357 per month. Those savings accumulate powerfully over time: directed toward index-fund investments, they could grow into a substantial nest egg within a decade. The affordability advantage is broad-based, touching housing, groceries, and daily services alike.

Memphis for Different Lifestyles

Young professionals and singles: Memphis's one-bedroom apartments rent for $740 per month, while entertainment and social spending average $100. With housing below the national one-bedroom median of $1,190, young earners can allocate more toward student-loan payoff, retirement contributions, or building an emergency fund.

Retirees: Memphis is flagged as a retirement-friendly city. Low taxes in Tennessee protect Social Security, pension, and withdrawal income from excessive state-level deductions. Healthcare costs of $390 and housing at 29 percent of the budget support predictable financial planning.

Families: Childcare in Memphis runs $750 per month, which is below the national average — a meaningful savings for families juggling work and parenting. On the local median income of $41,228, families retain enough after housing to fund education savings, extracurriculars, and a healthy emergency reserve.

Is Memphis, TN Right for You?

Whether Memphis is the right fit comes down to how its cost profile aligns with your personal situation. A cost of living well below the national average rewards residents with genuine financial flexibility — the kind that lets you build wealth, not just get by. With rent at $850, homes at $155,000, and total monthly outlays near $2,945, you have the raw material for a realistic household budget. Compare these figures against your current expenses using our calculator, research the neighborhoods that match your priorities, and — if possible — spend time in Memphis before making a final decision.