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Financial Tips for Roommates

The month of May is filled with graduations.  Certainly an exciting time.  I’m sure there are many new graduates who are starting out on their own will be thinking of having (or being) a roommate..

If you or a loved one will be house-sharing, here are a few tips to have a good financial life with your roommate:

You need to make sure that anyone you share the rent with can pay for their portion.  While having a financial discussion might be awkward, it’s an important and necessary conversation to have. 

Because informal agreements can cause issues, make your arrangements formal.  Not only does this lay out the guidelines formally, but also this protects the parties if there are problems.  Sample roommate arrangement documents can be found on-line.  It should be signed and notarized by all parties.

Discuss, agree, and create a list of “joint expenses.”  Renter’s Insurance, internet access and items such as toilet paper, napkins, cleaning supplies, and the like are items that you might consider as joint expenses. 

Consider how you will pay for joint expenses.  For some, opening a joint on-line account for joint expenses might be an option.  Should you decide to do this, settle upon an amount you will need to deposit each month to pay the expenses.   Deposit one month of joint expenses upfront so you have the funds available in case of an emergency or unexpected event.

Make a list of when joint bills are due.  Set them up, as appropriate, to be paid automatically.

Set up a monthly meet-up with your roommate to discuss any changes in living expenses.

Plan to purchase your own food.  With the exception of a planned joint meal, it’s best to maintain your own grocery items.

Discuss and create a plan of action if it doesn’t work out.  It should cover items such as “who will remain” and  “who will get possession of items which were purchased together.” 

Congratulations and best of luck to the Class of 2017.