Housing, Money Saving Tips

4 Financial Tips for Living With a Roommate

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Sharing your living space with a complete stranger may not sound like an ideal situation but it can be a lifesaver when finances are tight. Taking on a roommate is a smart move if you’re looking to cut down on your housing and utility costs but there are certain pitfalls that go along with communal living. In addition to navigating the rules about chores, socializing and personal boundaries you also have to figure out how to make it work financially. If you’re worried about a money miscommunication with your new roomie, here are some things you can do to keep conflicts to a minimum.

Related Article: Renting Your Way Rich: How to Live in the Basement and Make Money

1. Feel Them Out Financially

When you’re interviewing potential roommate candidates it’s important to find someone whose personality meshes well with yours but you should also be on the lookout for someone who’s a good fit financially.

If you’re a saver and your roommate’s a spender who likes to blow their paycheck on designer shoes, it can lead to problems if you feel they’re not pulling their weight when it comes to paying the bills.

Asking general questions about their income, career goals and attitudes about money can help you find someone who’s on the same page.

2. Work Out the Lease

Deciding whose name should go on the lease may not seem like a big deal but it can potentially have significant legal and financial implications if your roommate doesn’t work out.

When you put both parties on a lease, it entitles them to certain rights. If the person you’re living with turns out to be a nightmare, you may have to jump through certain legal hoops to get them out if they’re on the lease.

If you’ve already leased a place in your name only, having them sign a roommate agreement can give you certain protections if there’s a problem later on.

3. Splitting Up Expenses

Figuring out how to divide expenses can be tricky so you both need to know beforehand who’s going to be responsible for paying what. Certain things, such as rent, utilities and cable are typically shared equally but you may need to pick up the tab for things like phone or Internet service yourself if your roommate won’t be using them. You should also discuss how the cost of groceries and personal care items will be divided and what your policy is on sharing.

In addition to dividing up individual expenses, you’ll want to work out how the bills are going to be paid each month. Assuming responsibility for handling all the bills each month can ensure that things are paid on time but it also puts you in the position of having to collect the money from your roommate. Divvying up who pays what creates some balance in the relationship but it only works if both of you are keeping up your end of the bargain.

4. Check In Regularly

If you and your roommate are on opposite schedules or you just don’t hang out that much, arranging a regular time to get together and discuss the bills is a must. Even if it’s just for a few minutes each week, you should set aside time to go over what needs to be paid, what bills are coming up and any irregular costs that need to be addressed, such as lawn maintenance or pest control.

It’s also a good time to bring any other issues to the table for discussion that aren’t related to the house. If you’re tired of your roommate stealing your socks or eating your secret stash of chocolate chip cookies, you want to get it out in the open before it escalates to a full-blown argument.

Related Article: 5 Tips for Renting Your Home

The key to successfully living with another person is being able to communicate. Talking about your joint finances regularly can keep things running smoothly. Allowing a small issue to turn into a huge problem could end up costing you money if you have to replace your roommate on short notice.

Photo Credit: jteore

About Rebecca Lake

Rebecca has been writing about the nuts and bolts of personal finance since 2009. Her work has appeared on a number of popular finance sites, including the Quickbooks/Intuit small business blog and Money Crashers. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.

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