5 Financial Tips for Living with a Roommate

Everyone reaches a point where they are ready to move out of their parent’s home. 

The problem is that the cost of living always seems to go up. 

This can make the act of actually being able to move out on your own rather difficult. 

Getting a roommate can be an answer to the financial crisis involved in moving out on your own.

 It can provide you the freedom that you have been dreaming of. 

However, even though having a roommate can have its benefits, it can also be risky.

You need to make sure that you are protecting yourself. 

These five financial tips for living with a roommate are here to make sure you avoid any arguments based on money.

 

The following chart shows the number of people living with roommates in 2002 as compared to 2012 in a few cities across the United States.

 As you can see below, this figure is increasing quickly.

FinWell- 5 Financial Tips For Living With A Roommate

Put an Agreement in Place

When you rent an apartment or a home, there is a lease agreement put into place. 

This lease agreement is going to have you, your roommate, and the landlord on it.

Its purpose is to spell out the terms of the contract.

Much like the lease agreement, you should write up a roommate agreement between you and your roommate. 

You and your roommate should have sat down and discussed how all financial obligations were to be handled before you both moved into your new place.   

Finances are a sensitive issue.

Because of this, you should ensure that this agreement is not just verbal.

Finwell -5 financial tips for living with a roommate (2nd image)

Most roommates split all the finances equally. 

However, you and the person that you are living with may decide to split things differently. 

If one person is paying more than the other, then there may come a day that the individual for paying more gets angry and claims that this isn’t what they agreed to. 

By having an agreement in writing, you ensure that this won’t happen. 

You can pull out the contract you both signed, and show what everyone agreed to.

 

Do not Buy Furniture Together

Some roommates decide that it is best to go and buy all the furniture for their new place together so that one person does bear the financial burden. 

More than likely, the day will come that you and your roommate do not live with one another any longer.  

When you and your roommate finally do move out and get your own places, the fact that the furniture was purchased together can cause massive conflicts.

You could potentially begin to argue over who is entitled to which pieces of furniture. 

There are times when roommates quit living together for reasons that affect their relationship in a negative way. 

When this happens, arguing over who gets what furniture does nothing but add to the conflict and create more tension.

If everyone buys furniture separately, it can save a lot of conflict down the road. 

As far as the shared pieces of furniture, such as the couch, if neither of you already own these pieces, then you can decide in your agreement who is responsible for providing each piece so that you do not end up arguing over whose couch to use. 

Then, when each of you is ready to move out, it’s as simple as you get what you brought in with you.

 

Sometimes You Have to Be the Landlord

Sometimes you’ll find a roommate before you find an apartment.

So the two of you will apply for the lease together.

When this happens, the financial stability of you and your roommate will be investigated by the landlord that owns the building. 

Other times, you may already have your own place, and consider bringing a roommate in so that you can take some of the financial burdens off of yourself. 

In this situation, you resume the responsibility of being the landlord.

If you have no landlord experience, or if you are moving a friend into your home, this responsibility can make you feel extremely uncomfortable.

However, potential financial problems can occur if you do not take this responsibility seriously. 

Even if the potential roommate is your friend, you’ll want to confirm their salary.

If you neglect to confirm the financial stability of the person you are moving into your home, then you may find that person unable to cover their part of the financial obligations. 

This could cause you more financial hardship, and lots of conflict down the road.

Finwell -5 financial tips for living with a roommate (1st image)

Cushion yourself Financially

When you get a roommate, it holds the potential of helping you save money and increasing your financial independence. 

However, it is important that you remember you should not spend all your savings on meaningless things. 

Instead, you want to ensure that you keep a cushion for your finances in place just in case your roommate suddenly moves out.

If your roommate decides that they want to move out before the lease is up, this could be disastrous.

You need to make sure you’ll be able to afford the rent on your own.

If you and your roommate signed the lease together, this will mean they breached the contract.

This can cause litigation to occur against you and can hurt your credit.

But, if you prepare for the worst and hope for the best, you have the possibility of being able to cover the money for the remainder of the lease and keep yourself out of trouble.

The following shows what you could be responsible for if your roommate suddenly moves out:

Finwell -5 financial tips for living with a roommate 2

Do Not Combine Finances

It doesn’t matter if your roommate is your best friend; you should never make the decision to combine your finances. 

The person you are living with is not legally bound to you in marriage. 

This means that there is no reason that you and your roommate should go through the process of obtaining a  joint bank account.

 

This can be an effective solution or a relationship for disaster. 

This is particularly the case if one of the roommates is not very responsible with their finances to begin with.     

You may find your roommate taking money out of the account to cover their personal finances.

On the other hand, you may find that your roommate just never deposits their share, and you end up having to cover their slack. 

The best way to handle paying bills is to write separate checks and put them in an envelope to give to the person in which you are paying the bill to.  

The following shows what you could be facing with a joint back account:

Finwell -5 financial tips for living with a roommate

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