5 Tips for Splitting Up The Bills With Your Roommates




roommates splitting bills
Photo by Alexander Grey on Unsplash

Living with a roommate has gotten really popular in the last few years, and knowing how to split up the bills has become an important topic.

According to the following article, the demand for sharing space with a roommate is skyrocketing.

Skyrocketing Number of Millennials Living With Housemates

In this article, we’ll discuss some tips for splitting up the bills in the fairest way possible, with all of your roommates. We’ll also discuss some popular payment apps that will make transferring money to one another extremely easy.

We’re going to answer questions like:

  • How do you split up the utility bills fairly between all roommates?
  • How much rent should each roommate pay?
  • What are the best payment apps for transferring or paying money to each of your roommates?

A quick warning before we start: Sometimes people have a bad credit rating with old unpaid utility bills. You could get a roommate in this situation, this will be a burden and could be a warning sign for what’s to come. Be careful!

Let’s get started!

Tip #1: What Percentage Each Roommate Will Pay

Should all the roommates split the utilities and bills equally? Usually yes if all things are created equal in the living space. But many times they are not.

What if one of you works from home? That person should be paying more of the electricity bill because they are consuming more energy.

Here’s another scenario:

If you own a house and rent a spare bedroom out, you should not expect your roommate who rents just one bedroom to pay 50% of the overall utilities. They are taking up much less square footage in that house than you are. A fair estimate might be around 30% since they are most likely only using a third of the overall house.

The same attitude should be considered for all expenses relating to rent, utilities, and any other miscellaneous living expenses.

To make things fair, have a discussion with your roommates and figure out an arrangement that works for everyone.

Tip #2: Add a Section in Your Roommate Agreement For How The Bills and Rent Are Divided

Adding a section in your roommate agreement about how the bills will be split up between you and your roommates is a very good idea.

Make sure you include the total cost of all the monthly rent payments, utility bills, and other non-fixed costs that are required for the residence.

Make sure to document any costs that are covered by the landlord, as part of the monthly rent. For example, if you rent an apartment the garbage and water are normally included in the rent vs. a house that does not include those costs.

Tip #3: Payment Apps For Transferring and Paying Money To Each Other

Whether you have one roommate or multiple roommates, you’ll want to get paid sooner, rather than later, because it can be hard to track all the money different people might owe you.

So, make sure you and the other roommates agree on an app to use so you can easily transfer money to each other accordingly.

Check out the below list of apps for transferring money to each other.

Paypal – We all know about PayPal, it’s been around since 1998. Anybody with an e-mail address can sign up and send or receive money to anyone else with an account. You can directly link your checking account or credit card. The PayPal mobile app is pretty easy to use, and PayPal is a trusted company as far as security goes.

Venmo – Just like PayPal you can also send and receive money to anyone with Venmo. The best part is it’s free to use if you utilize your Venmo balance, bank account, or debit card to pay someone. Otherwise, the standard fee is 3%. Always review the fine print to find out how much is being charged in merchant fees.

Splitwise – Is an interesting app that I recently discovered. It will track your expenses and IOUs (what everyone owes) with your friends and roommates. It allows you to fairly split the living costs with everyone. If you can convince everyone involved to install it and use it, it can be very beneficial. It’s 100% free too.

RentShare – This app will help track each roommate’s rental payment to your Landlord. You can even use your credit card to pay your share of the rent. While that might be a nice feature, I’d be a bit concerned if my roomy needed to pay their share of the rent with a credit card. One last thing about this app, you’re Landlord has to sign-up for you to use it.

Divvy That UP – If you plan on dining out with your roommates, then this app is for you. It will allow everyone to split the check and pay their fair share. It’s got an amazing OCR technology that allows you to scan the restaurant bill right into a smartphone’s camera. Wow!

Tip #4: Keep All Big Purchases Separate, But Share

When it comes to big purchases for things like furniture or kitchen appliances, you need to be careful how you divide the cost of these items.

The problem arises when the time comes for someone to move out or your lease with the landlord comes to an end.

Eventually, when you and your roommates have to move your separate ways, how will you divide up a big item like a TV or Couch?

The solution is this:

I highly recommend you do not share the purchase of one particular item. Instead, buy each of these items separately, but agree to share them. This way at the end of your lease, you just take the item you paid for when you move out.

This strategy of sharing works out quite well and in the past, my roommates and I used it all the time.

For example, we had a beautiful outdoor patio in the backyard. I bought the BBQ, and my other roommate bought some lounge chairs and a table.

When it was time to move out, it was easy for my roommate to take the chairs and table, but I got to keep the BBQ.

No fights, no arguing, and no questions as to who was going to take what from the patio!

Tip #5: Groceries and Other Food Costs

Sharing the food costs with roommates can be tricky because what if one of you eats more than the other?

You can solve this issue by being very selective about what types of food you share.

Don’t share your favorite cereal. But if you decide one night to cook an expensive dinner and it makes enough for more than one person, why not ask your other roommates to chip in and share it?

Chipping in money on wine, beer, and bulk items like toilet paper, steaks, chicken, and other frozen food packs you buy from Costco is also a great idea.

Roommate Food Sharing Tip:

Never wait until the end of the month to collect money owed to you for shared food. Roommates have a horrible time remembering these types of IOUs vs. the monthly utility bills which can be clearly pointed out.

Final Thoughts

One of the biggest issues that causes stress and arguments between you and your roommates will be over money. Now that you know the secrets for how to track and divide up the expenses in a fair way. You won’t have to worry about that anymore!

Check out my other roommate articles if you want to know more ways to make living with a roommate easy.


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