Budgeting Tips for Young Professionals in an HMO

Living in a House in Multiple Occupation (HMO) is a smart choice for many young professionals, offering affordability and flexibility. However, managing your finances in a shared living environment requires careful planning to avoid unnecessary expenses and ensure a stress-free lifestyle.

In this guide, we’ll cover essential budgeting tips to help you manage rent, bills, and other expenses while living in an HMO.

1. Understanding Your Monthly Costs

Before setting a budget, it’s important to understand the typical costs of living in an HMO. Here’s a breakdown of common expenses:

A. Rent

Typically the largest expense, rent varies depending on location, property condition, and whether bills are included.

Some HMOs offer all-inclusive rent, while others require tenants to manage utility bills separately.

B. Bills and Utilities (if not included in rent)

·       Electricity & Gas

·       Water

·       Internet & TV Licence

·       Council Tax (usually split among tenants unless exempt as a student)

C. Household Essentials

·       Cleaning supplies (detergents, toilet rolls, bin bags)

·       Shared kitchen essentials (cooking oil, salt, tea/coffee)

·       Subscription services (Netflix, Amazon Prime)

D. Personal Expenses

·       Groceries

·       Travel and commuting costs

·       Social life and entertainment

·       Gym memberships or other subscriptions

2. Smart Ways to Save on Rent & Bills

Rent and bills make up the bulk of your expenses, so finding ways to reduce these costs can make a big difference.

A. Choose an All-Inclusive Rent Option

If possible, opt for an HMO where rent includes all bills. This helps you avoid unexpected utility price increases and simplifies budgeting.

B. Split Bills Fairly with Housemates

If bills aren’t included in rent, use apps like Monzo to track and divide expenses fairly. This prevents awkward money-related conversations.

C. Be Energy Efficient

·       Switch off lights and appliances when not in use.

·       Use heating efficiently

·       Wash clothes on eco-friendly settings and only when you have a full load.

D. Save on Subscriptions

Share streaming service subscriptions like Netflix or Spotify to cut costs.

3. How to Split Household Expenses Without Conflict

Since you’ll share common household expenses, setting clear agreements with housemates is essential.

A. Create a Shared Budget

Agree on a set amount for household essentials each month and contribute equally.

B. Rotate Shopping Responsibilities

Instead of one person always buying items like toilet rolls or cleaning products, take turns to keep things fair.

C. Use a Joint Payment App

Consider using a shared bank account or a group payment app to track communal spending transparently.

D. Communicate Openly

If someone is struggling to contribute, have an honest conversation rather than letting resentment build up.

4. Grocery Shopping Hacks to Cut Costs

Food expenses can quickly add up, but you can make smarter choices to save money without compromising on quality.

A. Plan Your Meals

·       Meal prepping reduces impulse buying and food waste.

·       Cooking in bulk saves time and money - freeze portions for future meals.

B. Buy in Bulk for Shared Items

·       Consider splitting costs on items like rice, pasta, and cooking oil with housemates.

·       Shop at wholesale stores or use supermarket loyalty cards to get discounts.

C. Shop Smart

·       Compare prices using apps to find the best supermarket deals.

·       Buy supermarket own-brand products instead of premium labels.

D. Limit Takeaways & Eating Out

·       Set a weekly or monthly budget for takeaways.

·       Use discount apps like Too Good To Go or Groupon for dining deals.

5. Managing Personal Finances & Savings

Beyond rent and bills, it’s crucial to have a financial plan for your personal goals.

A. Track Your Spending

Use budgeting apps to track where your money goes.

B. Set Savings Goals

·       Allocate a percentage of your salary to savings each month.

·       Consider using a savings challenge (e.g., the 52-week savings plan).

C. Build an Emergency Fund

Having a backup fund for unexpected expenses (e.g., job loss, health emergencies) can prevent financial stress.

D. Look for Additional Income Streams

·       Consider freelance work, remote side gigs, or weekend jobs to boost your income.

·       Sell unwanted clothes or gadgets on Vinted, eBay, or Facebook Marketplace.

Final Thoughts

Living in an HMO as a young professional can be an affordable and rewarding experience if you manage your budget effectively. By making smart financial choices, splitting costs fairly, and being mindful of unnecessary expenses, you can enjoy a comfortable lifestyle while saving for future goals.

Are you currently living in an HMO? What budgeting tips have worked for you? Share your thoughts in the comments below!