9 Tips for Easily Splitting Expenses with a Roommate

One way that many people reduce their financial burdens is to share their living space with a roommate. Living with another person can reduce your costs overall, whether that’s in a house, apartment, or any other kind of property. Still, it is best to split bills effectively to avoid unnecessary drama.

There are plenty of ways to split expenses with your roommate easily. All of that begins with openly communicating with them and agreeing on what needs to be divided in the first place. Besides that, you should also revisit the discussion regularly to make adjustments and make your finances more efficient.

There are plenty more methods to keep in mind when sharing costs with your roommate, and you’ll learn all of them in this guide.

Key Takeaways

• To successfully split expenses with a roommate, open and honest communication is essential. Discussing financial matters, including income, bills, and shared responsibilities, should be done before moving in together.
• Before sharing living expenses, it's crucial to establish clear agreements on how costs will be divided. This includes creating a written budget that outlines each person's financial responsibilities and shared expenses.
• Clearly define which expenses are shared and which are individual. This distinction helps prevent confusion and potential conflicts over financial matters.
• Regularly reviewing and adjusting your expense-sharing plan ensures that it remains fair and effective over time. Embracing open conversations and addressing issues directly is key to maintaining a healthy financial relationship with roommates.

Roommate Money Management Before Move-In

With young people living at home longer, roommates are very real possible for many.  However, before moving in, it's important to lay some financial ground rules. As you'll see below, some of these questions are a little intrusive, but roommates need to be transparent to make sure there are no surprises down the road (i.e., eviction).

Here is a checklist to go over with a potential roommate to make sure you two (or three) are compatible on money matters. 

• What is your monthly income?
• Is your income consistent each month, or does it vary? If it varies, by how much?
• How stable is your job, and how long have you been employed there?
• Have you established an emergency fund, and if so, how much is in it?
• What is your current credit score, and is it sufficient for our joint rental application?
• Do you have any outstanding student loans, credit card debts, or other financial obligations that may affect your ability to cover rent and utilities?
• Which household expenses do you anticipate sharing?

How Do You Easily Split Living Expenses with a Roommate?

So, now that you are living together, it's time to get a plan for splitting the common bills like utilities, internet, and groceries. 

Here are 9 ways you can navigate these issues smoothly to reduce and prevent tension with your roommate:

1. Agree on Expense Splits

Before you dive into the nitty gritty of splitting costs with your roommate, it’s essential to start with the big picture: agreeing to share the expenses.

Doing so will require serious and honest conversations, which might initially feel awkward.

Still, your long-term relationship with your roommate will become stronger when you discuss how to divide both shared costs and individual bills.

For example, you can decide to share everything equally. Alternatively, you can assign specific bills to each person, giving them the responsibility to pay them on time and in full.

Whatever the final arrangement looks like, the first step is to sit down, discuss, and agree to split the bills in the first place.

2. Create a Written Budget

It’s one thing to verbally agree to split the bills with your roommate. Unfortunately, that can lead to confusion and “he said, she said” arguments.

For that reason, anything you agree to must be reflected in a written budget. When your discussions and agreements are transferred to a written budget, there’s little room for disagreements about the details of how bills are split.

Besides that, having a written budget also benefits everyone involved because the exact dollar amounts that each person pays have been calculated. That means you and your roommate can plan ahead of time how much money to set aside for your bills.

Here are some budgeting tips that you and your roommate should keep in mind:

1. First, set the budget ahead of time before anyone gets paid. That way, each dollar you have will already have a clear purpose the moment it lands in your account.
2. Second, remember that budgets aren’t perfect and set in stone. That means you should review the written budget with your roommate regularly and make adjustments where necessary.
3. Third, it’s best to keep and update the budget in a shared place so there is no confusion about the numbers. For example, you can start a shared spreadsheet online that both you and your roommate can access and edit easily.

Remember that a written budget is never perfect, so prepare a first draft, then plan to review and edit it later with your roommate.

Tips for Recording Shared Expenses Between Roommates

Mobile apps are pretty handy when it comes to splitting expenses like household bills between roommates. A few of the apps we tested are Splitrr, Splitwise, and IOU. These mobile tools have integrated calculators, reminders, and other fancy bells and whistles to keep you and your roommates organized. 

3. Keep Some Expenses Separate

Planning a budget with your roommate isn’t just about splitting shared expenses. Besides that, it’s also about clarifying payments that are not meant to be shared. In other words, your budgeting is also about setting boundaries and identifying payments that are individual.

For example, repairs that apply to only one person’s room or bathroom shouldn’t be split among both roommates. Overall, you should be financially responsible for fixtures, appliances, and anything else that’s in your personal space.

When you clarify which expenses are individual and which ones are shared, you’ll avoid any resentment or feelings of unfairness.

4. Furniture Ownership

One of the most important areas you must discuss with your roommate is furniture ownership. Take a few moments to look at all the furniture in your living space. You’ll start to realize that some are shared (e.g. the living room couch) while others are personal (e.g. your bed).

Besides that, it’s likely that different people bought the existing furniture. You might have brought a chair or two from your previous home, for instance.

Whatever the case might be, figuring out the issue of furniture ownership will help to prevent confusion in the future.

Here Are Two Advantages of Distinguishing Between Personal and Shared Furniture

1. Personal furniture. When you know which furniture belongs to you personally, you’ll have a much easier time if you ever move out. If that happens, there won’t be any arguments about which furniture belongs to you or your roommate.
2. Shared furniture. Furniture needs to be repaired or replaced at some point. When that time comes, knowing which furniture is shared makes it easier to split the cost with your roommate. Discussing shared ownership now prevents arguments later.

Whether shared or not, planning for furniture payments is often overlooked by most people. Thankfully, that’s a problem you and your roommate can prevent by planning ahead. 

The two of you can either set some money aside or figure out where to borrow money quickly should it become necessary.

For example, you can get a personal or installment loan quickly from Simple Fast Loans if there’s an urgent need to repair or replace the furniture in your apartment. 

The quick and easy application process can put cash in your hands fast, so you can make your urgent payments with little or no delay.

5. Individual Grocery Budgets

Another tricky budget item for roommates to discuss is groceries. That encompasses all consumables, whether that’s food or beverages.

When it comes to discussing the food budget with your roommate, the best thing you can do is to keep food items completely separate. That’s because groceries and their costs can be incredibly challenging to split with another person.

To put it simply, it’s incredibly difficult to keep track of who eats what. As a result, it’s also impossible to agree on who has to pay for what they’ve consumed.

A much simpler approach is for you and your roommate to have separate grocery budgets. Without a doubt, buying and labeling your groceries separately will help you prevent many arguments in the future.

6. Use Payment Apps

If one roommate is the designated "payer" of certain bills (some bills can only be in one person's name), then use a payment app like Cash App or Venmo to expedite repayments. 

Cash App is a common example, as it is widely used for people who want to split the costs of something. You likely already use it with your friends when it comes to sharing the bill for a fun night out.

While Cash App is great for general use, you and your roommate might prefer another app like HyperJar instead. Apps like this one allow you to separate your expenses into specific ‘jars’ and share them with your roommate.

As such, you and your roommate will have a clear overview of all the shared costs that you need to contribute to.

7. Effective Expense Sharing

Things can get a bit overwhelming when talking with your roommate about splitting expenses. Unfortunately, that can make the whole exercise a lot less effective.

So, as you set a budget, decide which expenses to split, and revisit your plans regularly, remember these 3 things to keep things simple:

• Agree on what's shared. When you agree to split expenses with your roommate, you’re both committing to a plan. Like any commitment, you need to recommit and re-agree to them from time to time. So, be sure to check in and discuss your expenses from time to time.
• Agree on what's separate. You and your roommate’s commitment to the plan isn’t the only thing that can fade with time. Aside from that, the boundaries that you’ve set for individual expenses can also become blurred. So, remember: some expenses, like food, should always be kept separate.
• Track payments and the budget. Last but not least, track everything all the time. At a minimum, you can track all expenses and payments using a pen and paper. However, updating everything on a shared spreadsheet is even better, as everyone involved tracks things on the same document.

This seventh step will ensure that your discussions and plans are worth the effort, as they’ll last for much longer!

8. Embrace Awkward Conversations

The final thing to remember when splitting expenses with your roommate is to embrace all the awkward conversations.

Your first discussion with them might be awkward enough to put you off ever talking about finances again. However, that’s a mistake! Instead, you should always communicate openly about shared and separate expenses to ensure that you stick to your plans.

In some unhealthy roommate situations, individuals resort to passive-aggressive notes rather than addressing issues openly. For instance:

• "The overdue bills need to be paid yesterday (accompanied by a smiley face).

Part of being a responsible adult involves tackling problems candidly and directly, even if it means having uncomfortable conversations. If you encounter a problem, require assistance, or wish to make a change in the household, engage in face-to-face discussions with all roommates present.

Most likely, your roommates will be willing to cooperate as long as you approach them with understanding, courtesy, and straightforwardness, rather than resorting to passive-aggressive methods.

9. Agree on the Consequences for Failure To Pay

While no one wants to assume the worst or even to hope for confrontation, addressing a roommate who isn't meeting their financial obligations may necessitate implementing certain consequences. These should be agreed on at the outset.

For example, if a roommate fails to pay bills on time once, they would be responsible for handling all household chores until they can fulfill their financial commitment. If this issue arises a second time, it may be agreed that the non-paying roommate would need to vacate the rental property.

Note: The content provided in this article is for informational purposes only. Contact your financial advisor regarding your specific financial situation.