5 Tips on How to Save and Make Extra Money When the Rent is Too High
How to Beat the Rising Rent: The 5 things you Need to Do
According to the latest rental index data from HomeLet, the average rent during the three months to April 2015 has hit at £916, some 10% higher than £899 a year ago. For the first time, the average rents across the UK have matched the pace of Greater London. To rent in London, one has to now shell out an average of £1,436 a month, as opposed to £730 outside the capital. With the rising rents, many find themselves in the predicament of having to save more money to cover for the extra cost.
If you are like one of the many who have been scrimping and saving to afford the rents in these cash-strapped times, take a look at these 5 money-saving tips to help you stay on top of your finances.
1) Create a household budget and stick to it
To give you a better sense of how much you have to pay for the month, we advise to plan a strict budget and stick to it. Having an overview of your upcoming expenses and things that you have spent money on will enable you to plan on how to spend less and save money for your rent. Revisit your budget every month to keep track of your spendings. Remember that there will be many costs in addition to your rent, so make sure to set a realistic budget.
Tip: To help you hit your financial goals, we recommend downloading our top picks for free budget apps: Mint, You Need A Budget, Good Budget and Mvelopes.
2) Live in the outskirts
Location is everything when it comes to price differences in real estate. If you want to live in the most popular areas, you most likely have to pay a premium to be close to the conveniences of being centrally located. Renting in the outskirts, however, is always nearly cheaper than renting in the city centre. Living a little outside Greater London, for example, could save you up to £700 - half the amount of what would cost you to be right in the centre of London. Not only will it give you more leeway to budget, it could also give you a reprieve from the hustles and bustles of living downtown. Maybe you will have to spend some extra minutes on the commute or lose that great balcony view but decide on what compromises you are most willing to live with.
Tip: We recommend the website, rentonomy.com to get you started in finding the property and area that suit your budget best.
3) Save by sharing
Whether you choose to rent with a roommate or share a home that someone owns, either decision is a foolproof way to lower your rent payments considerably! Both have its own downsides and benefits - tenants usually have more responsibilities, such as property maintenance and utility bill payments. Lodgers, on the other hand, may have issues on sharing and not having a real space to call their own. Figure out which scenario best suits your comfort level.
Tip: Try Splitwise, a website that can help simplify splitting bills with a roommate by encouraging on-time payments and managing house finances through their “fairness calculator”. An app that we also highly- recommend is Fairshare which helps in splitting house chores, paying bills and staying connected with your roommates.
4) Consider renting out your place to tourists
There are many who are now turning in profits from renting out their place for a night or two to tourists. By listing a decent-sized spare room on room-letting websites like Airbnb and HomeAway, you can easily make an extra £50 for a night. You have to keep in mind though the risks inherent to opening your home to strangers so make sure to do your due diligence before taking this step.
Tip: Before listing your space on Airbnb, make sure to read your lease agreement and give notice to your landlord of your intention. On CitizenAdvice you can access further information and resources related to subletting your place.
5) Make extra money
Assuming that you have tapped all your resources but you are still having a hard time footing that £2000 bill, making a bit of extra cash may be the best solution. Thanks to the internet, there are actually many ways to earn extra income without even leaving home. Perhaps you have some unused things that you can sell online, some freelancing skills that you can do for a fee or just some free time that you can use to get paid for market research. Whether you are looking into earning just a few pounds or need a hundred or more every month, there will surely be a moneymaking idea out there that will suit you.
Tip: Even little things such as turning off the lights when not in use, switching to energy-saving bulbs or not leaving the water running when you are brushing can make a difference. Remember that no matter how tiny these changes are, it can still add up and leave you with more money in your account.