One rewarding step in the journey to adulthood is living with roommates. Whether you are moving in with a significant other, renting a place with one or more close friends, or moving into a room in an apartment filled with new acquaintances, having roommates is a fact of growing up. And part of that is learning how to share financial responsibility.
No matter the roommate situation, it’s important to settle on a shared budget, especially if you want to avoid lengthy disagreements later on. Money can be a defining hassle of cohabitation, though with smart planning, practices, and communication, cash doesn’t have to be an issue.
Although living with a significant other is different than living with a few strangers, the following tips and practices should make the prospect of sharing expenses with roommates easy and maybe even a little fun.
Split the Important Costs Fairly
When entering into a shared living situation, the expectation should be that everyone involved has equal responsibility financially and otherwise. This means that important costs such as rent and monthly bills should be budgeted right down the middle. If that doesn't seem fair, based on the size of each individual’s room, for instance, then split the rent as fairly as possible, though keep the bills even, as that gives the sense that everyone has equal access to the apartment.
Once the payment amounts have been decided upon, make a plan to collect rent checks and transfer at least three to four days before rent is due. Never leave this to the last minute. A good tip is to set aside a shared amount in savings equal to a month’s rent, to safeguard against one or more people being unable to pay unexpectedly. Smart saving definitely works to avoid late bill payments too.
Budget for the Household
When moving in with friends or loved ones, it’s not expected that everyone’s money goes into one shared pot. Individuals should still have some financial agency in a shared living situation. If you want a dozen cupcakes, for example, you don’t need to be purchasing them for the entire house, or split the cost per treat.
At the beginning, create a shared budget for household items everyone uses, such as toilet paper and cleaning supplies. Set aside money each month together for this sort of thing. This is more for the sake of sharing the responsibility than saving.
Shared budget, though, can also save every individual a surprising amount of money. It’s common practice to have your own shelves in the fridge, bathroom cabinet, and shower, though it’s clever to recognize redundancies in purchases. Buying one loaf of bread on a shared budget is cheaper than everyone buying their own, and leads to lower probability of waste. Think about how many cartons of eggs and milk you don't need to throw away each week.
Keep Track of Everything
The most important part of the shared budget process is creating a system of accountability. Try to log every payment in a shared document - there are a number of great programs online that help with this. Even having a white board in the kitchen logging who has bought what and when can save time trying to organize the house budget. Keep track of how expensive household items are, and communicate ideas on how to save when possible. It’s incredibly rewarding to not only successfully share financial responsibility, but save cash to boot.
In keeping track of spending and saving for the household, it’s also vital to keep communication clear and honest. Often the individuals in a household will be making very different incomes, so make sure to be clear about when contributing to the shared budget is not feasible. Agreeing to share an apartment or house means agreeing to the responsibility of your part of the rent and bills, but this doesn’t mean everyone has to pay equal shares of the renter’s insurance for one person’s expensive personal items.
Ultimately, creating a shared financial plan as roommates is not always easy. With open communication, and excellent organization, budgeting together can lead to closer connections, and much better financial planning practices in the future. `
