What’s Mine is Ours: Nine Ways To Handle Finances With Roommates
Maybe you don’t have the luxury of your own apartment or home at the moment, especially with the economy’s job market and the rising living costs in many metropolitan cities. Even in college, many of us have lived in a roommate situation, where things like space, bills, and finances are shared amongst two, three or even four other people.
If you are preparing yourself to live in a roommate-style situation or already found yourself living with others, make sure you keep in mind a few tips on how to handle the finances of this tricky living situation.
Put One Person in Charge of All Utility Bills
Avoid the hassle of giving your money to more than one person by putting the utility bills under one person’s name. This will save you and your roommates time and effort trying to get bill payments to each person accountable, which is also a waste of writing checks. Make sure that person is also responsible enough to handle the bills on a monthly basis, for they will be held the most accountable!
Set Up A Monthly Payment System For Bills
Setting up a monthly payment schedule for bills and rent ensures that everyone knows a set date for when the money is due. This will avoid late fees and sometimes forgetful roommates who might not put as much emphasis on money and bills as you might. A great way to start is to outline when bills are due (most on or around the 15th or 20th of each month) and have each roommate agree to have their share by then.
Set Up A Person-to-Person Money Transfer System
Many bank institutions offer person-to-person money transfer systems like Chase with their QuickPay system and Wells Fargo, allowing customers to send and receive payments easily with just a click of a mouse. Customers are allowed to add outside account information and link it to their account to transfer money between banking institutions. This is a great way to ensure that money for bills get sent easily and without the hassle of writing out a check or counting the right amount of cash.
Have Meetings To Discuss Any Changes In Finances
Changes in finances are inevitable with job situations changing and more bills to account for, like college loans. Make sure you are having an open discussion with your roommates frequently about these changes, whether they are in your own life or in theirs. It is important to be aware of each person’s financial limitations and strains to ensure that bills are always successfully covered or if someone has to unfortunately move out to find a living situation that is cheaper.
Lay Out All Bills For Other Roommates To Assess
Another effective way to handle the bills of the house and to gain trust among everyone is to display all of the common bills for your roommates. If you are the accountable one that pays all of the bills each month, make sure your roommates know what costs are associated with their money being sent to you each month, so there is no issue down the line.
Talk Added Services with Roommates
One thing about living with others is that everyone has a different perspective on finances and how to handle and distribute the cost equitably when you’re dealing with services like cable r the internet. One roommate might want cable service in their room separately or premium channels, but expect the rest of the roommates to split it equally every month. Make sure you talk about the implications of one or two roommates adding more to the bills and how to handle the additional costs, whether it is equally split or an extra charge onto that roommate’s bill payment every month.
Make Sure Money Borrowed is Money Accounted For
Some of us have experienced living with a roommate who was also our best friend, acquaintance or someone we put trust in, but in the case of handling finances and “loans,” a best friend could turn into an enemy quickly. If you and your roommates are very lax when it comes to borrowing money and personal items from each other, make sure each and every dollar is accounted for. If there is a promise to pay back, make sure it is backed up with some sort of signed agreement on paper or otherwise. It might sound a little extreme, but it might save you lawyer fees and a trip to court!
Alternate Buying Household Supplies
Bills are not the only issues that come up with roommates. Household supplies, missing food items, and appliances are also a common topic of heated discussion. One roommate might feel like they are the only ones that replace the toilet paper or the cleaning supplies, things that might seem trivial, when in fact, they can cause a riff between the roommates. Keep everything bought equal and make sure there is an understanding of who bought what and when, so everyone is accountable for pitching in from time to time.
Keep Open Communication with Your Roommates (and Landlord)
There are many viable ways to keep open communication with your roommates. It might seem like you never have time between school, your job, networking, company events and other important areas in your life, but take the time out to maintain a relationship with your roommates. Electronic communication or weekly dinners can ensure that finances are just as secure as your relationship.
While making sure open communication is achieved with your roommates, make sure the same is with your landlord. Landlords may be the sole decision-makers on rent increases, and they’re your first call if something happens in the house. Keeping the lines of communication open with your landlord ensures that when it is time to negotiate, your good reputation as tenants is vouched for.
Cut Ties When Necessary
If someone isn’t holding up their end of the bargain, you have to take drastic measures. Failure to pay rent or bills on time, bringing home one guest a lot (or lots of guests), or being otherwise unpleasant makes a living situation unbearable. And you have every right to be comfortable in your own home. If communication and warnings aren’t working, it’s time to make a bold move. Going your separate ways could be the best — and only — option.
Do you have any successful (or horrific) experiences with roommates and finances? Let us know below!