Simple Tips for Splitting Bills with a Roommate
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Splitting bills in a shared house can be difficult. Learning how to budget with a roommate can help safeguard your friendship — and your finances.

Living with roommates can be a great way to save money — but only if you plan ahead. Whether you live with one roommate or five, it’s critical to discuss who’s paying how much and for what before an issue arises that could threaten your relationship and your financial future.

“I see many financial challenges with roommates, and particularly with younger adults heading off to college and on their own for the first time,” says Lauren Korbal, Vice President and Financial Wellness Relationship Manager with Regions Bank. “They often don’t plan for costs other than rent, such as utilities, renter’s insurance, entertainment, and groceries.”

Dealing with a roommate who doesn’t contribute to shared costs can be frustrating. And the situation can devolve quickly from frustrating to financially damaging as it can have a negative impact on your credit if your name is on the lease and shared utilities.

“I have seen so many clients end up with credit damage or in court because of roommate situation,” Korbal says. “These situations can be avoided by sitting down together in the beginning and having an open conversation together.”

Whether you’re planning to move in with a roommate or you already live with one, use these considerations to help you manage your shared household expenses efficiently and equitably.

Start with an open conversation

Talking about your personal finances may be uncomfortable, but it may help you and your roommates agree on shared expense contributions. Talk openly about what it costs to live in your home and how each roommate will pay.

“Being proactive rather than reactive can help alleviate financial stress and problems in the future,” Korbal says.

Before signing a lease, it may be helpful for each roommate to understand the other person’s financial situation, including monthly income and expenses outside of rent and utilities.

Create a written agreement

Documenting the household’s shared expenses and each individual’s responsibility to pay for them is crucial. This ensures each roommate understands everyone’s responsibilities and creates an objective record in the event of a future dispute.

The agreement should cover how to handle:

  • Utilities that some roommates want, but others don’t, i.e., streaming services, high-speed internet, etc.
  • A roommate bringing a partner into the home, which could mean increased utilities and resource use
  • A financial emergency such as a roommate losing a job and becoming unable to pay expenses
  • A roommate moving out, including what happens to the security deposit and how to cover expenses until the remaining roommates find a new tenant

Korbal recommends having your agreement notarized so all parties take it seriously. Doing so will also provide all parties added protection in the event of a future disagreement.

Set clear boundaries

Roommates share more than rent and utilities. They often buy necessities together like furniture and food — expenses that can be difficult to divvy up.

“Younger roommates entering into a living situation often don’t have their own furniture, so they buy it together,” Korbal says. “Then, when they move out, there’s a question about who owns the furniture they bought.”

To avoid conflict, Korbal recommends each roommate buy individual pieces of furniture separately, clearly documenting who owns what.

Korbal also recommends roommates go grocery shopping together but pay for their own items. “That way, you physically see who’s paying for what and you know what’s yours and what’s someone else’s,” she explains.

Hold each other accountable

The responsibility of paying bills will often fall to one roommate — typically the most organized person in the group. However, that shouldn’t remove responsibility from others to pay bills in full and on time.

Posting due dates and payments fulfilled on the refrigerator or another public place in the house can help everyone remember when bills are due and who hasn’t paid on time.

Beyond physical reminders, take advantage of technology such as shared budgeting and scheduling apps and digital spreadsheets to track due dates and roommate payments. Likewise, person to person payment apps can make it easier to send or receive money for household bills.

“Helping everyone track when payments are due and being able to show how often people might be late with their payments can help make conversations between roommates go more smoothly and be less confrontational,” Korbal says.

With a bit of planning and communication, living with a roommate can be an enjoyable and financially smart decision. Learn more about how to create a monthly budget to keep your finances on track.

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This information is general in nature and is not intended to be legal, tax, or financial advice. Although Regions believes this information to be accurate, it cannot ensure that it will remain up to date. Statements or opinions of individuals referenced herein are their own—not Regions'. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Regions, the Regions logo, and the LifeGreen bike are registered trademarks of Regions Bank. The LifeGreen color is a trademark of Regions Bank.