There's no doubt in my mind that housing eats up the biggest portion of everyone's travel budget. Just because finding a place to stay is the most expensive part of a trip doesn't mean you can't use your creativity to save some money. More importantly, it's completely possible to stay within a strict budget - much like the one you probably have at home.
Never, Ever Stay at a Hotel
...unless you have to, of course. It's one thing if it's late and you are too tired or can't find a cheaper place because it's an odd hour. It's entirely another thing if it's daytime and you have access to a computer or did adequate planning before you left home. Staying in a hotel for your whole trip is the fastest way to the poorhouse when you get back (or even smack dab in the middle of your vacation). Don't do it...unless you're desperate - and even so, only for one night. Trust me on that...
Village Rooms (Apartments)
First, I will say this is my absolute favorite way to bunk when I travel. Some may call it living on the edge, but I call it "my key to a longer vacation!"
Ditch the city and stay in a village! In every single one of the picturesque villages I've been to, there has always been a vast amount of locals with open invitations for me to stay in either a room in their house or at an apartment (or house) they own nearby.
It's always cheaper than a hotel. Much cheaper. They often give discounts of 10% or more if you stay more than 3 days. In these situations you also have more room to haggle with the price a bit (without coming off as cheap of course)!
Village apartments are more fun as well, in my opinion. They're quaint and give you a real sense of what life is like in the village. You can stay at a chain hotel anywhere. These village homes are one of a kind. It's not an opportunity I like to pass up.
Hang Out in the Village or at the Port Where Ferries Arrive or Outside the Airport
A lot of times, people will be walking around with signs that say "Room available" - or its equivalent. Or they might ask people they know are tourists. This is a quick and easy way to get a place to stay. Not to mention cheap. Did I mention cheap?
Craigslist and others...
Often times you can find an apartment or room to stay in before you even leave for the trip. You can also hit up a coffee shop or a place with free WIFI (if you bring a laptop or handheld device, obviously) and scan Craigslist for potentials to check out before nightfall. Craigslist is always full of ads offering housing in every major European city - this truly is an amazing resource. There are also travel sites and websites such as weather.com that have vacation home listings. Just do a google search and you will find plenty of listings.
Look around a bit and decide after you've seen several ads. Make sure to email or call the person/business to get an idea of the rates or to see if they offer discounts for longer stays. If they have a website (if it's a business), even better! If you're in a hurry to find a place, I would definitely call.
Avoid scammers at all costs!!! I cannot stress this enough! Never - I repeat never, wire money, use Paypal, give out your credit card number, or mail cash to someone for a "deposit." Never do that, because those are scams. The only case in which I would send a deposit to reserve a room is when 1) they have a professional website, 2) they have a valid phone number that they answer in the name of the business, 3) they are registered to do business in that particular country, and 4) I'm traveling during a busy season where finding a place might be highly competitive. I never give deposits to online individuals offering me a place to stay - it must always be a business.
Usually (except during busy seasons as mentioned above), the legit offers will not ask for a deposit until you arrive and actually see the place. I try to stick with those, or the alternative that I mentioned in the previous heading about hanging out at the port, airport, or village itself.
This may not be the way most people travel to Europe and it may not be glamorous with all the five star hotel hype, but it's a big reason why my travels are possible. I honestly don't feel like I'm sacrificing anything by rooming this way and I have loads of fun interacting with locals. I have even made tons of friends along the way by doing this. In Europe, making friends is inevitable and maybe necessary if you want to stay within your budget...more on that later.
Comment away! I want to know what you're thinking!!
"It is not down in any map; true places never are." -Herman Melville