Hotel rooms abroad are often much smaller than in North America. Therefore, many families are forced to book two rooms, and that gets very expensive. In many places, renting an apartment actually can be a better deal, especially for stays of more than a few days.
The London Connection offers flats (apartments) in a wide range of neighborhoods.
In a flat, you can set up housekeeping, saving money by cooking breakfast, lunch, and even dinner if money is tight. By the way, the name of this service is a bit misleading, because they operate in Paris and Australia as well as London.
Need something cheaper? Flat-Share.com represents flat and room rentals in England, France and Greece. Single travelers can find rooms under $60 USD/night in some cases.
VeniceRentals is based in Quincy, Mass. and offers one, two and three bedroom apartments in one of Italy's most expensive cities. On this Web site, you email them your dates and budget parameters. They promise an answer within a few hours.
Rome bound? A similar service exists for the Eternal City.
If this idea appeals to you, I must express two warnings: deal only with bonded companies or services when reserving on-line, and be skeptical about rates that seem too good to be true.
Many of these owners will require a minimum stay, sometimes as long as a week. Since budget travelers often use one city as a base to explore a region, this can work to your advantage if you cut a good deal.
Want to stay in an apartment without paying cash? Consider a home swap. This can work well for longer stays, but obviously requires a great deal of caution. Use an agency to screen potential swap-mates and be sure the deal works for you before you sign on the dotted line.
Perhaps you are in college, and staying in a dorm is the last thing you want to do on the road. Maybe it has been years since you stayed in university lodging. Either way, put your feelings aside for a moment and click "next" to read about how staying at an institution of higher learning could bring big budget benefits.

