Six tips for managing money when you have roommates
Having a roommate isn’t always ideal, but for many people, it’s often a financial necessity. Managing money with roommates takes lots of communication and organization if you desire a friendly living arrangement—which I’m sure you do. While discussions of money and formal agreements can be an uncomfortable conversation, it’s also extremely important. Putting everything out on the table keeps everything clear and clarity keeps down the drama.
Here are a few tips on living with roommates and how to effectively manage money:
Create the house rules
Some say, “rules are meant to be broken,” but not having house rules can quickly create chaos and resentment in a living arrangement. The smell of dirty laundry lingering through the hallways or music blasting at 5:00am are definitely causes for concern. So before you bang on your roommate’s door, create rules and boundaries so expectations are clear. Rules about loud music, cleaning responsibilities, parties, privacy, etc., are just a few examples of things to outline in your rules. Once the rules are established, the house mates will have have a guide for what to do and not do. Take it a step further and print a copy for everyone to sign and place it on the refrigerator as a reminder. Because life can be unpredictable at times, always be open to discussing things you might have missed and be willing to create or modify rules as needed. While you don’t want your home to feel like Alcatraz, rules are necessary, and they help to prevent problems.
Split the bills you share
Discussions about which bills you’ll share and who will be responsible for ensuring they are paid on time each month will help lessen the drama and can keep you from becoming a star on the latest daytime court television show. In today’s technology-driven society, we rely on apps. To keep things simple, use apps like Splitwise to break down who owes what and make it easier to communicate about money. Free apps like Mint also help keep you on top of your finances. With Mint, you can easily link all your financial accounts, set up budgets, and receive alerts. Seeing all your bills in one location keeps you organized and aware of your finances. Plus, habits you develop early on about finance, credit, and budgeting will stick with you throughout life.
Make monthly payments easy
It’s difficult to do homework in the dark, and you can’t binge watch your favorite Netflix show without electricity. Forgetting to pay the power bill is not a mistake you want to experience. A simple way to track expenses is to post bills in a central location where all the roommates can see them and know when they are due. Another option is to create calendar alerts that will pop up on your phone—you can even invite your roommates to the calendar reminder. Apps like Venmo, PayPal, or CashApp are great ways for roommates to pay their portion of the monthly bills.
Put it in writing
Yes, put it in writing because taking someone’s word isn’t what a lawyer would advise you to do. Once you’ve decided to move in with someone and share expenses, documenting that agreement is vital to protecting yourself should a conflict arise. Keep a copy of the rules, the bills, and anything that might be important to your living arrangement. Sometimes things don’t work out as planned, and in those moments, you want to be sure you have documentation to protect yourself in the case of legal action. Once it’s signed, scan a copy, save it on your computer, and email it to yourself. Because if you can’t prove what was agreed upon, a judge will not take your word.
Have those awkward conversations
Keep the lines of communication open by having monthly meetings. Sitting down to discuss important (and not-so-important) matters is a great way to build healthy, long-lasting relationships. You don’t have to be best friends, but creating a bond can only help to make your home more pleasant. Ignoring problems won’t make them go away—in fact, it could make it worse. Because people’s moods can change from day to day depending on what they are dealing with, be open to healthy conversations that could lead to resolution. Work to create an inviting environment where you and your roommates can unwind and be at peace after a long day of school or work.
Don’t share food
If your roommates like frozen dinners and you like cooking, there’s going to be a huge problem. Consider the fact that a healthier lifestyle tends to be more expensive, while eating junk food or frozen food is relatively cheap and affordable for almost anyone. Personal frozen dinners tend to cost less than $5.00, while cooking a meal could cost about twice that, maybe triple. Simply put, eating styles vary from person to person, so save yourself the trouble of having to explain what you ate and who should pay more or less for groceries. Make it easy and just buy your own food.