memory in PHP for my sites - avada on MSC asking to increase memory limit?

On the my legal club site I have a dashboard and a WPMUDEV dashboard.

On My shopping Club my developer has avada and WPMUDEV.

On the my shopping club site the system status states:

40 MB - We recommend setting memory to at least 128MB.
To import classic demo data, 256MB of memory limit is required.
Please define memory limit in wp-config.php file. To learn how, see: Increasing memory allocated to PHP.

on the my legal club site I cant access anything to state this.

the issue I have is my server is shared with a colleague who has 88 sites running on it.

monkey tree have stated that updating the PHP version to 5.5 will make a lot of my colleagues sites unsupported.

I therefore face a problem.

how important is the memory to the successful running of the site and will it be affected by increased traffic etc?