How to save money on rent and budget like a pro

7 min read

Working out how to save money on rent is one of the best ways to achieve your financial goals. If you can reduce your rent, you’ll find yourself with a lot of extra cash each month.

This additional cash can then go towards your savings goals such as paying for a deposit on a house or creating an emergency fund. So if you want to get serious about saving, read on to find out how you can reduce your rent.

How much can I afford for rent?

Before you can calculate how much you can afford to spend on rent each month, you need to create a budget. Don’t worry, this isn’t as complicated as it sounds. All you need to do is follow these simple steps:

  • Track your monthly expenditures and your gross monthly income. There are several apps out there that can you help do this. Ideally, your monthly rent shouldn’t be more than 30% of your monthly gross income. However, if it is, you can adjust some of your expenditures to accommodate for it. 

  • You’ll need to separate your variable costs from your fixed costs. Your variable costs include expenditures such as groceries, entertainment, and eating out. Your fixed costs include your utility bills, debt repayments, and your current rent itself.

  • Next, you need to identify areas where you could spend less. The easiest place to start is with your variable costs. This could mean cutting back on your monthly grocery shop or on how much you spend on clothes or entertainment. 

  • Finally, you can also work out how much you’d like to save on your fixed costs. Say, for example, that you’d like to save an extra €300 a month and you currently pay €1200 a month on rent. Then, you’d need to find a way to pay €900 or less a month on rent. Next up, we’ll provide some tips on how to do this.

How much can I afford for rent (calculators)

If you’re trying to save on rent, then an online rent affordability calculator could be useful. There are many different types available, but most ask you to input your gross annual income before calculating the percentage you should be paying on rent. This then gives you a rough figure to work with when trying to save money on rent.

Tips on how to save money paying rent

If you want to save money on apartment rent, there are a few options available. However, these vary depending on whether you are looking for a new apartment or if you want to stay in the apartment you currently live in. Choosing to relocate to an apartment where you pay less rent is one of the easiest ways to ensure that you save money each month. Here are some tips for paying less rent if you decide to look for a new place.

Choose your location wisely

When it comes to choosing your next apartment, location is everything as it’s one of the biggest deciding factors with regard to the rental price. Opting to live in a city center is likely to mean paying nearly double what you’d pay in the city outskirts. Yet as long as you have good transport connections, the amount you save in rent every month often outweighs the time spent traveling to and from the city. 

For example, according to SimplyBusiness.co.uk, the average price for a one-bedroom apartment in central London costs around €2745. However, in Dagenham, just 50 minutes away from London city center, the average one-bedroom apartment costs €975. That’s a huge difference of €1770 a month. 

We can break that down even further. Say you need to commute from Dagenham into London city center every day for work. That’s a daily commute of 100 minutes, five days a week. That means you spend around 33 hours a month commuting. However, when compared to the €1770 you save in rent by living outside the city center, each hour of your commute is worth around €54, six times London’s minimum wage.

Look for a new apartment in winter

Once you’ve decided where you’d like to live, the best time to start looking for a place is in winter. This is the case for several reasons:

  • During the summer, university cities tend to become flooded with university graduates in preparation for the new semester. This is also the time when new graduates relocate to new cities and, therefore, searching for an apartment between May and September is usually highly competitive.

  • Families with children also usually wait until the school year finishes at the beginning of summer before moving.

  • Additionally, many people don’t want to move in the winter, purely because of the unappealing thought of moving while it’s cold. This means that landlords are more likely to offer their apartments for lower prices during that time to entice people to move in.

Avoid middlemen

When looking for a new apartment, it’s best to do so without the help of any real estate agents or brokers. While it certainly takes more time to search for apartments yourself, you will save a significant amount of money by doing so. Additionally, contacting the landlord directly gives you the potential to build a better relationship with them rather than if you go through a broker. This is always preferable as it’s likely you’ll need to be in contact with your landlord at some point during your tenancy. Not only does this make it easier when discussing any problems with the apartment, but it also increases the likelihood of getting a better deal when it comes to renegotiating your rental contract once it expires.

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How to save money on rent when not moving apartments

Not able to move apartments right now? Don’t worry—there are still some strategies that could help save you money on rent

Get a roommate (or two!)

The easiest way to start paying less rent is to split the cost of your apartment with additional tenants. So, if you were paying €1000 for a two-bedroom apartment and you decide to live with a roommate, you’d save an additional €500 a month, which is €6000 a year. If you have three bedrooms and decide to live with a third roommate, you’d save around €660 a month, or €7920 a year!

But before you start casting for a new roomie, first get the permission of your landlord. Legal requirements for subletters vary and some landlords want each tenant to co-sign the lease. Next, be certain to get a credit and background check from your potential future roommates to avoid any nasty surprises further down the line. This could mean asking for a credit report, their last three months of payslips, and some references.

You’ll also want to consider asking your new roommates for a security deposit. This will ensure that you’re financially protected if they cause any damage to the apartment or wind up being unable to pay rent.

Move into a smaller room

If you live in a shared apartment, consider swapping with one of your roommates and moving into a smaller room. Usually, the amount of rent you pay is dependent on how big your room is. While this may not be the case in every shared flat, it’s a great way to put a bit extra aside every month if you don’t mind downsizing. 

However, if you don’t live in a house share, moving into one and renting a single bedroom as opposed to an entire flat is a smart way to save. It also means you get to split the cost of furniture and other household items.

Save money on utilities

If living with additional roommates or swapping rooms doesn’t appeal to you, another simple way to save money on rent is to reduce your monthly utility bills. There are several ways to go about doing this:

  • Monitor your energy usage to identify areas where you could reduce your consumption

  • Upgrade any inefficient appliances 

  • Turn down your thermostat

  • Buy a more efficient shower head

  • Wash your clothes and 30 rather than 40 degrees

  • Turn off any devices that are on standby


Your money at N26

At N26, we’re all about helping you reach your savings goals. As our bank account notifies you each time a transaction takes place, you’re always in control of your finances. 

What’s more, with our Spaces feature you can create multiple sub-accounts, each with a specific savings target. Combined with our daily spending limit function, banking at N26 gives you the financial freedom to focus on the things that really matter to you.

By N26

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