Cost of Living in Phoenix, Arizona

Making a move can be daunting, regardless of where you are heading. It’s exciting, scary, and a little bit melancholy, as you say goodbye to a place and life you once knew. But moving to Phoenix doesn’t have to be full of unknowns, because I’ve broken down the cost of living in Phoenix, Arizona, and I’ll share it all with you. Whether you are curious about housing and healthcare costs, or just wanting to know how daily expenses like groceries and utilities will affect you, I’ve got you covered!

Cost of Living in Phoenix, Arizona

Phoenix currently falls just above the national average when it comes to cost of living (in general, you’ll find various blogs and websites all say about 5% higher.) That’s especially impressive considering it’s growing exponentially as a metropolis and in population. So the fact that it’s remaining an affordable place to live is notable.

Cost of living is a generalization that can mean different things to different people. For instance, if you’re moving from California or New York City, Phoenix is going to feel much less expensive. But if you hail from Indianapolis or St. Louis, you might find the cost to be similar if not higher than what you are used to.

Phoenix from above at dusk, cost of living in Phoenix Arizona

You can find all sorts of information on the internet about the cost of living in Phoenix; that it’s affordable, a healthy atmosphere, beautiful…but what does all of that actually mean for you? When you hear affordable, where in fact does that mean your money is going? Don’t worry, I’ve got it all figured out for you here, so you don’t have to! For comparison, I’ll be using my own weekly, monthly, yearly costs to represent an average, three person household in the Phoenix area. You can of course adjust this to the number of people in your family, your income, etc.

Cost of Groceries in Phoenix

My family of three spends about $100 to $150 on groceries each week. This is just food and drinks consumed at home or packed for lunches, this doesn’t include eating out. Some weeks might be more expensive than others, but there are plenty of grocery options in Phoenix around for any budget. There is a Safeway and Costco nearby, for bargain and bulk items. We tend to shop at Sprouts for the majority of our groceries, especially produce and organic items.

Phoenix is also one of cities that hosts the California chain, 99 Cents Only stores, where you can buy household items, and even produce, at extremely affordable prices. You can see how it’s easy enough, especially if you map out your shopping, to get groceries at a very economic price in Phoenix.

Healthcare Costs in Phoenix

Healthcare is pricey no matter where you live, but it’s also a necessary part of life. Everyone, at one point or another, needs healthcare. Our family has a high deductible plan, but we pay $350 in health insurance every month. This covers many basic care check-ups, as well as dental appointments. Considering our family is relatively healthy, we decided this was the best option for us to save money in the long run, but still be covered in the case of an emergency, accident, or catastrophic event. Our insurance, like many, also allows you to add on extra coverage for purchase if you need it.

cost of healthcare in PHX, cost of living in Phoenix Arizona

Housing Costs

Housing costs are generally the greatest factor when deciding where to move.  It’s also one of the most difficult to give an “example” of an average mortgage payment or rent. Why? Because these costs are all localized. Different parts of town cost more or less than others, and sometimes this even varies from home to home on the same street.

The average purchase price for a Phoenix home is $475,000.  Property taxes can affect these prices as well, though Arizona has lower property taxes than many states in the U.S. According to Apartment List, the average cost of rent in Phoenix in July of 2020, was $1,558. This same website provides some helpful graphs rating the expense by neighborhood, where for instance, Surprise is rated the most expensive, and Avondale is rated the least. Here you can see where there might be some more affordable housing, especially if there is a specific part of Phoenix you are interested in moving to.

Again, this is all relative, and no one website or person can tell you exactly what the prices will be.

two story home in PHX, cost of living in Phoenix Arizona

Cost of Utilities in Phoenix

For reference, our home is a three bed, two bath single story dwelling, built in the 1950’s with a few upgrades throughout the years, and we have a large pool.  Our electric bill averages around $147 a month, which is higher during the summer months around $300, and closer to $100 in the winter. Our gas bill is around $36 a month, though this only services the grill and hot water heater. The water bill is around $120 monthly. Our internet bill is $90 a month, and though you could probably find something cheaper, this was the best package for us with our streaming needs. Add it all up, and we pay around $400 in utilities each month.

 Transportation costs

While many large cities have excellent public transportation systems, Phoenix is not one of them. In all honesty, if you are living in Phoenix and need to get around a lot, you’ll probably need a car. Of course there are plenty who rideshare and take the bus or the light rail. But for the sake of these calculations, let’s assume you have a vehicle. Gas prices in Phoenix tend to be lower than other popular cities. Hovering aboe $4/gallon. But it’s hard to know where prices will go through different times of the year and as our economy continually adjusts.

For vehicle registration, Arizona is a value based state, meaning your registration prices reflect the value of your vehicle. Newer and more expensive cars pay higher registration fees. We pay about $500 a year for two vehicles in our family. Insurance is also highly faceted, but we pay about $162 a month for both of our vehicles to be insured.

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Taxes in Phoenix

The tax rates in Phoenix are much more affordable than other major US cities, such as San Francisco and New York City.

Arizona tends to fall on the lower end when it comes to income taxes (ranging from 2.6-4.6% depending on your income bracket), and sales tax can vary slightly depending on the city you find yourself in. Sales tax in Arizona can be anywhere from the 6% to 9% range, and in Phoenix, the sales tax is 8.6% of the cost of the merchandise. While this may sound like a high sales tax, keep in mind as in most states; there are many items that are often exempt from sales tax, such as groceries, clothing and medicine.

As for property tax rates in Phoenix, the city has 0.68% property tax rate, which is lower than the states average of 0.77%.

Cost of Childcare in Phoenix

If you have children and more than one parent works full or even part time, you’ll probably be faced with the expense of child care. Get ready, because child care can cost as much as rent! A good tip is to try to get your child on a daycare waiting list as soon as possible, some even before they are born!

These reputable child care facilities fill up fast, so be proactive. If you don’t have a relative or someone who can help out with child care responsibilities, you’re looking at about $1,500 to $1,700 a month if you have an infant or toddler. As the child gets a little older, and is less dependent, your options open up a little bit more, and you might be looking at a monthly cost more like $1,300 to $1,400 a month.

Regardless, childcare is pricey, so it’s definitely something to consider in cost of living if you are moving to Phoenix and have no family or friends in the area.

childcare costs in PHX, cost of living in Phoenix Arizona

Cost of Dining Out in Phoenix

The cost of dining out of course is a spectrum, depending on the fare and atmosphere you’re looking for. A midlevel meal out in Phoenix, (meaning not white tablecloth, but also not a food truck) you’ll be looking at $15 to $20 per entree, per person. A beer tends to run around $8, and cocktails and wine usually a bit more. For a couple to go out for dinner and enjoy a couple drinks, the price is usually around $60 to $85 for the evening, when you count up your bill plus tip. These prices can spike significantly if you’re ordering cocktails, which can be around $15 to $18 each.

The good thing is, just like any fiscal choice, you have options. If you’re watching your pennies, it’s easy to not go out to eat as much. After all, there are a lot of great produce and farmers markets just waiting for you to stop by. Have a special occasion worth celebrating? Time to go out to eat!

cost of dining out in PHX, cost of living in Phoenix Arizona

There’s so many wonderful dining options in the Phoenix area, you can try out a lot of different fares and establishments to see what you like and what you don’t need to try again. Downtown Scottsdale has an array of cozy dining options all within walking distance from each other. Which makes it easy enough to go for a nice walk, check out some menus, find an atmosphere and menu that works for you, and hop on in!

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