How to Avoid Financial Disputes with Roommates
Living with roommates isn’t just for college students anymore. There are any number of reasons or life circumstances that necessitate splitting the costs of housing and living expenses with another person (or multiple people). But anytime two or more people are involved in a financial transaction, problems and misunderstandings can arise. Here are some ways you can avoid getting into financial conflicts with roommates.
Choose Wisely – Of course, there’s no way to guarantee you’ll get along with anyone you choose live with, or that they’ll have the rent on time every month. But you can help minimize the chance of financial conflict by choosing a roommate who shows signs of being a financially responsible person. Are they employed full-time? Do they have decent, reliable transportation? Do they use cash or a debit card to pay for everyday purchases? These are good signs they probably have their financial affairs under control.
Establish Expectations Up Front – Positive roommate relationships start with good communication. Establish clear expectations regarding financial matters up front, including how, when, and who is responsible for making sure the bills are paid. You may also want to consider writing up a roommate agreement, separate from your lease, that lays out the things you agree upon. Having everyone involved sign a document like this makes informal conversations feel more official, and will give you a neutral document to refer to should any disagreements arise.
Split Expenses Evenly – It’s easy enough to divide the cost of rent by two (or more), but what about things like utilities, cable and internet? Many roommates make the mistake of trying to get everyone to pay their share to the penny. For example, one roommate might take long, hot showers, while the other spends hours at a time online, and it would seem to make sense that one should pay more of the water and electric, while the other should bear the burden for internet access. But it’s going to be easier and more equitable to just split those the same way you split the rent. Ultimately, it’s all going to even out in the end.
Shop Together for Shared Items – Decide up front which household items you’re going to share, then shop for them together. Things like trash bags, light bulbs, paper goods, cleaning supplies and other mutually beneficial items come to mind. Shopping together will ensure you spend only as much as the other person is comfortable with, and give you the chance to split the bill at the time of purchase, rather than divvying it up later.
Ready to leave the roommate life behind and buy a house? Our Rent or Buy Calculator can help you decide if you’re prepared to make the move.