Manage Bills With a Roommate

Managing bills with a roommate can be tricky, whether you're living with a close friend, a stranger, a partner, or even a family member. The key to managing bills with a roommate is having clear communication from the beginning, creating a game plan before you start living together, and knowing how to execute that plan. If you want to know how to manage bills with a roommate while avoiding conflict and stress, follow these easy steps.

Steps

Make a Game Plan for Success

  1. Pick the right roommate. Size up your roommate carefully before you decide to share a home with him or her. Whether this person is a close friend or a perfect stranger, you should have an open conversation with him or her to make sure that your goals and values align and that the person will be financially responsible, as well as an ideal roommate.
    • Try to live with someone who is gainfully employed and isn't going through a life crisis or career change. This will not only be stressful for you to deal with, but it may make it harder to split bills with the person. If the person is a student, make sure he won't use that as excuse for not paying his share.
    • When deciding on a potential roommate, look for subtle or overt warning signs, such as frequent tales about hoped-for money in the future, spending ages looking for a job and refusing to take work that the person thinks is "beneath" him, or a person who is financially dependent on his parents, or has been living on the charity of his parents long after he has reached adulthood.
    • Try to find a person who is in a similar financial situation as you. If you make five times more money than that person, then he may make you feel guilty for wanting to split everything equally.
    • If you know the person or are beginning to spend time with the person, notice whether or not he or she is a mooch or a cheapskate. Does he avoid paying for drinks or meals, and does he conveniently never bring cash to cash-only places, forcing you to pay? If so, this is a sign that this behavior will continue if you live together.
    • Find out why the person is looking for a roommate. If you hear that the person was avoiding "roommate drama" with a former roommate, this may be a problem if the person — and his free-loading ways — was the source of the drama.
  2. Discuss every aspect of managing bills. Once you've found the perfect roommate, or if you already have a great person to live with, then you should discuss every little aspect of living together before you make Make Agreements You Can Keep. This may feel tedious, but communicating about everything up front will help you avoid conflict and unforeseen problems in the future. Here are some things to keep in mind and discuss:
    • Establish everything from personal space to every possible aspect of Finance and Business, including discussing payment expectations with respect to the rent, utilities, shared (or otherwise) groceries, and potential maintenance fees.
    • Discuss how you will go about splitting cable costs, if you will have cable. Will both of you be watching TV and will you agree to split the costs? If you don't watch TV but your roommate will, then she can pay for it, but this may be unfair because you could inevitably get lured in to watching TV and may look like a mooch.
    • Discuss how you will pay the utilities. Does one of you love to turn up the hot or cold air, while the other person never touches the temperature? If one of you is running up the electricity costs, then he should be willing to pay more. If one of you will be working from home, for example, then that person will be using more of the utilities.
    • Decide what you will do about house guests, or visitors. If your boyfriend will be around 50% of the time, how will he chip in? If your roommate's significant other spends all of his time at your place, it's not fair if he doesn't pay a cent. Discuss your expectations in this arena. If you've signed up to live with just one other person and don't want someone else always floating around, say so from the beginning.
    • Decide what you will do if one of you goes on vacation. If you go away for one or two months over the summer, will you be expected to pay rent and utilities? Will you be able to find a subletter? Figure this out now because your future roommate may not want you to find another stranger to take your place for a while.
    • Decide what you will do if one of you moves out early. If you're signing a yearly lease, but your roommate moves out two months early, will she have to pay her share, or force someone to take her place?
  3. Write up a contract. Once you've decided all of the important aspects of living together, you should write a clear contract that states everything you decided upon. Once both of you signed it, you have agreed how to split things right from the beginning. That way, if one of you fails to pay up, the agreement will be there to show that you've been remiss in your roommate duties. This will also keep your roommate from denying to have agreed to anything. It will all be simple because it will be in writing. Here's what to include in your agreement:
    • How much rent each person will pay per month. If you're sharing the place evenly, it should be split 50/50, but if you have a much bigger room, or more space overall, you can decide if you should pay more.
    • What you will do about the security deposit. Will each of you pay half of it? This is ideal. You don't want to get stuck paying the whole thing and then lose all of your money.
    • How much each person will pay for the utilities.
    • Who will pay the bills. Will you pay all the bills, while your roommate pays you her share? Will one of you be responsible for the utilities, while the other is responsible for the rent?
    • What you will do if one roommate fails to pay. Is there a forgiveness period of a few days, or will there be a small fee if your roommate can't pay on time? If your roommate repeatedly fails to pay, will you have the right to kick her out?
    • If labor is part of the rent share, be specific about what tasks and hours count as part or all of the rent share. It's possible for a high-income labor mooch to completely take advantage of a low-income roommate paying way under minimum wage for hours comparable to a full time job plus overtime. Check the salary per hour for a professional doing those tasks and work out a schedule before entering the arrangement.

Execute the Game Plan

  1. Stick to your guns. Once you've signed the agreement and started living together, you have to be firm about the decisions you made. Keeping the situation fair for everyone involves setting boundaries, which means no encroaching or allowing your financial boundaries to be violated, not even "now and then". "Now and then" soon turns into habit once the moocher becomes alert to your generosity and ambiguity is a key source of financial boundary violations.
    • Don't accept excuses. For example, in the case of one roommate claiming, "Well, I bought this, well, I bought that," you'll find yourself in a losing battle based on divvying up any resource except for the actual cash needed pay the rent and utilities.
    • Be flexible only if severe circumstances occur after an excellent track record. If after many months of demonstrating credibility, a major loss such as a job loss occurs, changes to financing arrangements temporarily might be understandable. But this is different from anyone who immediately comes up with excuses whenever he doesn't feel like paying.
    • Never allow anyone else to make his problems become your problems. Everyone has the responsibility to solve his own problems with his own resources, even after a job loss or a hardship. Someone being out of a job for too long can all too easily turn into "always looking for work" while living off your generosity. Don't let that happen to you. Give an ultimatum on payments required and follow through with the plan you made about dealing with this in your contract.
  2. Always track your expenses. You should create a chart, or use a helpful tracking service, to track all of your finances, big or small, so you can continue to execute your game plan. This will help you see who paid for what, who owes whom, and who is coming up short. Here are some ways this can help:[1]
    • You will see who bought which household items, such as toilet paper, paper towels, or dish soap.
    • You will see who paid for any minor repairs the home may have needed.
    • You will see who paid for any home improvement items, such as new curtains, or even a new piece of furniture.
    • If you're sharing a pet, you will see who is paying for most of his food or other needs.
    • A classic mooch would go grocery shopping, buy 80 percent of the groceries for himself only, consume them, and then claim that the $200.00 grocery bill represents half the rent.
  3. Be wary of splitting food costs. Unless you're married or in a romantic liaison or family situation, it's not recommended to share the food costs with a roomie — doing so can easily muddy the waters and blur boundaries. It can also cause fights about use of expensive or unusual diet specific food items if one member of the household doesn't eat the same foods as someone else.
    • If you must share food, then purchase the food together in three pay cycles. Pay for your own groceries, have your roomie pay for his or her groceries, and then pay for your shared items by splitting the cost. Ringing up the register three times will be annoying, but worth it.
    • Do not allow "inconvenience" to become an excuse to blur the lines or this will ultimately lead to boundary violations and phony justifications based on cooked-up logic about trying to substitute one payment for another.
    • If you're part of a very community-minded household and eat the same types of food, such as a straight edge Raise a Vegan Family household), it may form part of your living arrangement expectations, so treat this aspect of finances accordingly but still make it very clear as to what payments are expected.
  4. Maintain clear communication at all times. To continue to execute your game plan, you need to have everything written down and verbally communicated. You need to keep an open line of communication with your roommate to make sure that everything is managed responsibly and that everything is paid on time. Here's what you can do:
    • Thank your roommate for buying items for being responsible and paying for everything on time. Show that you appreciate this timeliness.
    • Thank your roommate for any household items she bought, and make sure to repay her for them.
    • If your roommate doesn't pay close attention to the tracking sheet, gently remind her about something you bought and make sure she notices your contributions.
    • If a new unexpected situation arises, such as an expensive repair bill, or an unexpected extended guest, sit down and have an open conversation about it. Add your decision to your contract and sign it again.
    • Do not be passive aggressive with your roommate. Not only will this make it harder for you to take care of your finances, but you will make your living situation much more unpleasant.



Tips

  • When you have a roommate, you should view your expenses in one of three ways: your money, your roommate's money, and "our money." "Our money" is never touched unless both people agree. "My money" is exclusively your own business.
  • Don't forget to receive prompt payments from your roommate every month. Even if you're only paying $30 in utilities a month, don't let it add up until the end of the year, or your roommate may end up fleecing you.
  • Nothing becomes a substitute for paying agreed amount of bills — those are excuses to get out of paying a fair share. Work around the house is not a substitute.

Warnings

  • Communicate and agree in advance or no deal. Anything that is justified after the fact is only an excuse. Never accept excuses, or you may be stuck paying all of the rent and could find yourself in a risky financial situation.

Related Articles

Sources and Citations

  1. ↑ http://splitwise.com
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