How to Survive London's High Cost of Living: A Realistic Budget Plan

London is often said to be the most beautiful city in the UK, but this comes at a price, with surging charges all over the city for anything from the cost of food to transportation. That’s why so many people are having to save up a lot of money before they travel or move to London. This makes it unaffordable for those who might not be able to afford the luxuries that the capital city offers, unless they have a strict financial plan that they follow during their stay.

In this guide, we will explore how to survive London’s price tag by creating a realistic financial plan to help you stay within budget. Continue reading to learn more.

London Trip Financial Plan

The 50/30/20 Rule

Finding the right budget method for you when living in London can be the difference between life and death- not literally, but it can make such a huge difference. A standard single person living in London can expect to spend roughly £1,000 per month on living costs, excluding rent, with the right budgeting. If you include renting a room or a flat, that can increase to £1,600 to over £2,500, depending on the quality of the property being rented. The smartest way to structure this is the 50/30/20 rule that splits your finances into 55% needs, 25% wants and 20% savings.

Your 55% needs spend should cover things like rent, council tax, travel, energy bills and the groceries you need to keep you fed for the month. This allows you to live day by day without having to worry about not being able to afford the cost of living. The 25% wants should include those treats that you get yourself each month, which can be anything from a few pints in the local pub to your gym membership.

Then, 20% of your monthly income should be put towards your savings. This can allow you to build an emergency fund or pay any high-interest debt that you’ve accumulated. Saving is very important for your future in London, allowing you to eventually afford a better quality of life.

Rent Control

Rent will be your largest expense when living in London, so you need to keep this under control if you’re going to enjoy living there. While many people dream of living in zones 1 and 2, which allow them to live in areas like Soho and Shoreditch, these are best avoided if you want to retain more of your budget. Instead, you should look to stay in a place that falls within zones 3 to 5, as these offer better value while giving you great transportation links to the centre.

Living alone in London is considered a luxury, so expect to do some form of flat sharing that allows you to split some of the rent, council tax and energy bills with others. If you’re extra flexible, you can look into property guardianship where you live in a vacant commercial property for cheap rent. You can also homeshare with an elderly person, paying lower rent in exchange for helping them for a few hours a day.

Alternative Travel

London’s public transport is one of the most efficient in the world, but it can eat into your budget. The tube is the most popular form of transport for getting around the city centre, but make sure that you never purchase paper tickets, as this can be far more expensive than tapping on with a contactless bank card or Oyster card. TfL automatically caps your daily spending based on the zones you travel through, so keep it within 1 or 2 zones if possible.

If you are between 16 and 30, there’s a trick to get a good discount on travel. You can buy a 16-25 or 26-30 National Railcard. After this, go to a Tube station to find a staff member and ask them to link it to your Oyster card. This gives you an instant 34% discount on off-peak Tube and rail fares.

London is surprisingly flat, so you can find ways to get around the city without having to fork out on expensive methods. You can walk between Zone 1 to Zone 2, which will be completely free and often faster than navigating deep Tube stations. It’s also a great way to explore the city and find new places to eat and shop. If you are a driver, you can find a budget car park in London to help you get closer to what you need in the centre.

Food & Socialising

You can't move to one of the cultural capitals of the world and sit at home staring at the wall, so you must get out and do stuff despite the high rises. Doing your weekly shop at a local express store will have the highest food prices, as they charge premium prices for the convenience they offer. Budget supermarkets like Lidl or Aldi should be located, with there being many of them around the city centre.

A cocktail in central London can easily cost £15–£20, so you should instead stick to local pubs with happy hours. You can gather in London’s incredible parks during the summer with supermarket drinks. There’s plenty of free stuff to do too. London has some of the best museums and art galleries in the world, and they are 100% free.

Track Your Pennies

Every little bit of spending adds up, even if it’s just a few pounds. This is called frictional spending and can add up to hundreds of pounds a month. To manage this better, you can open an account with a digital challenger bank like Monzo or Starling. Use their instant spending notifications to help split your bill money from your fun money the second you get paid. 

If you don't actively partition your cash, London's tap-and-go culture will make it disappear as you’ll end up paying for more stuff without even realising it.

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Amy Jones is a freelance health and wellness writer from Manchester, UK. She loves researching and writing about health topics, as well as keeping up to date with the latest health news and eco-friendly brands. Her passion for health and wellness stems from her innate desire to educate people on how to properly take care of their bodies, spot any early signs of illness and take the best preventative methods. When not writing, you can find her taking long walks in the countryside with her dog, listening to groundbreaking podcasts or browsing her nearest bookstore.