Interested to know how to save money in London? Aren’t we all.
London’s reputation precedes it: yes, it is an expensive city to live in. And whilst, in recent years, it has fallen slightly down the global list of most expensive cities, prices – including rents and costs of living – remain high.
But all this needn’t terrify the frugal. Let’s take a look at how you can start saving money in London.
Can You Save Money Living in London?
Yes, it is possible to save money in London. And you don’t need to be a millionaire either.
But if you want to put a bit aside, be prepared to change your habits. The costs of buying lunches and coffee every day add up. Catching the Tube to work, rather than cycling, say, will obviously cost you more too. Saving is about flexibility as much as self-discipline – as well as not always taking the easiest option.
It’s not just what you spend your money on that’ll need to change. Getting in the habit of budgeting – and just developing the awareness of where your money goes – is crucial to learning how to save money in London.
How Much Money Do You Need to Survive in London?
Unfortunately, though, there’s no “fixed figure” that you’ll need to survive in the capital. What constitutes “surviving” is, after all, subjective: these things depend on your taste, your salary, and your particular needs.
However, knowing where to save money starts with knowing how much you spend – and how much you could be spending instead. With that in mind, here are the average prices for some of the essential costs in the capital.
What is the Average Cost of Rent in London?
According to the Office of National Statistics, the mean monthly price of a room in a flat or house across the city was £623. If you wanted a one-bedroom flat, you could double that to £1,293. For two bedrooms, it was £1,612.
These prices depend on where you are intending to live, however. If you insist on living in Camden, you’ll be paying £940 a month. If you are okay living in Croydon, that drops to £499. Your rent could be a good place to start saving.
More often than not, though, more money goes into our accommodation than we realise. You’ll need to consider council tax, utilities, and bills for things like Wi-Fi, TV, and for your phone too.
Council tax, for example, varies dramatically, depending on your area, the property you live in, and whether you live with or are a student. In Westminster, rates range from £500 to £1,500 per year, whilst in Kingston-upon-Thames you’ll be looking at between £1,300 and £4,000 per year. Unless you simply move, this is not really something that you can save on.
Water and sewerage costs, meanwhile, come to about £400 annually, Wi-Fi costs average at £27 a month, and you can expect to pay about £90 a month for utilities. That comes to about £1,800 annually, although shopping around might bring these prices down.
Whilst that’s your accommodation covered, you still have to eat, drink, travel, and enjoy yourself.
According to the UK government’s own statistics, the average person spends just over £40 a week on food, including alcoholic drinks and meals out. If you are just after brute survival, you could well take this lower. And with the average price of a pint in London being £5.19, according to one study, it might be better to just stay home.
At this point, though, budgeting is down to you. What you’ll be prepared to spend will depend on what sacrifices you are willing to make personally.
How to Save Money in London
As we said, when it comes to saving, discipline and a willingness to go where the deals take you are what matter. As with everywhere else in the world, this remains the best way to save money in London.
Here are some tips on how to start saving in the capital.
Set Goals and Budget Regularly
Knowing where you spend is crucial to knowing where you can best save. Meanwhile, having a saving aim can give you the motivation to keep on at it. This makes budgeting – and setting goals – essential if you are looking to build some savings.
Put time aside to work out and set yourself a budget – and review how things are going every month or so. If you can tighten your budget further, then great.
Side note: With a Revolut account, you get access to our budget planner – which can help you keep track of your spending and help you stick to your targets. And if you want to put aside spare change, you can use Revolut’s Vaults to round up your transaction to the nearest whole number and stash the difference.
Switch Up Your Utilities Providers
You’ve seen the average costs of bills. However, that’s not necessarily what you should be happy with paying. Instead, you can make savings by shopping around between providers.
Whilst it will take you time, switching your broadband, phone, or energy suppliers can be a fruitful activity if you are committed to saving as much as possible.
Change Your Transport Habits
As you can ride across town simply by tapping your contactless card, you can lose track of just how much you spend on transport. Instead, change the way you commute or travel around the city.
If you can, walk or cycle to work – this way, you could save on a gym membership too – or try to avoid peak times, at least. If you are a student or young person and have an Oyster card, link it up to your railcard so that you get a third off off-peak travel.
Take the Time to Look for Deals
Once you have got yourself in the budgeting mindset, you may start to see deals where you wouldn’t have noticed them before. The cheaper pub for a post-work pint, the economical alternative for your lunch, or a way to visit gigs or the cinema for less.
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