Roommates and Finances

February 10, 2022

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Many people choose to live with a roommate to make ends meet and save money. After all, what could be better than having someone pay half of your bills?

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Living together and sharing expenses can be very helpful from a financial standpoint, but sometimes friction occurs - even among the best of friends. Some people are meticulous with record keeping and always plan to have enough money available to pay the bills, while others have difficulty with managing money and paying bills on time.

The best way to ensure an equitable relationship is to develop a plan for financial fairness. Read on to learn a few ideas to make sure that both you and your roommate have a good experience.

Divide Responsibility Equally

A common situation is that one roommate sets up all the utility bills (and maybe even the lease) in their name and bears all the financial and legal responsibility. This may sound like a good idea, but it could lead to problems if the person who sets up the bills doesn’t manage money like you do.

A good plan is for each person to take responsibility for one or two of the expenses, with the goal being that each roommate takes responsibility for the same dollar amount each month. For example, one roommate could take responsibility for internet, cable, and electricity, while the other roommate could take responsibility for heat and water.

Because some months may have higher costs than others, set a schedule for totaling bills and reimbursing the roommate who spent more money.

You may also want to check with your landlord about submitting payments; some landlords might allow each roommate to pay one half of the rent.  One benefit to having some of the bills in your name is that you may be able to build your credit score.

Be Honest With Your Landlord

If there is a roommate change, be sure to get the lease updated. Otherwise, the original occupant has total legal responsibility for the lease. Make sure the landlord is aware of any changes. Remember, you may need your landlord’s recommendation for your next rental, so be responsible.

Stick With A Cellphone

Since most people have a cell phone, a landline may be an unnecessary expense, and it could just be another potential source of conflict.

Avoid Joint Purchases

Rather than purchasing large items together, you might want to consider individual purchases. For example, if you need a sofa and television, one roommate could purchase the sofa, while the other could purchase the television. Purchasing items in this manner makes it clear as to who owns what. In the event of a roommate “breakup”, life is much easier if you don’t have to determine who gets to keep which piece of jointly owned furniture.

Buy Your Own Food

Unless you are making meals together, it’s best for each roommate to maintain his or her own supply of staples and respect the food of the other roommate.

If you and your roommate mutually agree on each person’s financial roles and responsibilities at the beginning of the living arrangement, the chance of a financial misunderstanding will be greatly reduced.

Additional Resources

AAMC’s Financial Wellness Program articles:

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