8 Reasons Roommates Fight About Money

published 19 May 2011

Whether you're moving out of the dorms for the first time or you've been living sans-resident-adviser for a while now, you might consider getting one or more roommates to help cut costs. But sharing a living space can be a minefield of monetary problems.

Sidestep any big blowups by discussing how you’ll address potential problems with your roommate(s) before you even sign a lease. And consider formalizing your chat by creating an official roommate agreement -- signed and notarized, just in case a little spat escalates to a legal battle. Here are eight common causes of cohabitation conflict that you might address in your contract:

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Or you can work out another arrangement. For example, my old roommate and I shared a two-bedroom apartment, where I got the master bedroom (complete with a view of tennis courts, where unwitting casual players were subjected to my dramatic, stroke-by-stroke commentary) and she took the other, much-smaller room. We didn’t want to quibble over how much each room was worth, so we agreed to split the rent evenly. To make it fair, I let her use the majority of the common area as her personal office space. And we lived together happily ever after -- for a year (she was even a bridesmaid in my wedding).

On top of the rent, discuss the other expenses you’ll share and how you’ll manage them, including who will be responsible for which payments and when everything will be due. For possible shared costs, such as utilities and cable and phone bills, you’ll need to consider whose name or names will be on the accounts. If any accounts in your name go unpaid because of your roommates’ irresponsible behavior, you’ll be the one legally bound to the problem and dealing with a dinged credit score if a delinquent bill goes to a collections agency.

Many of the current and former group-house residents I speak with hail the old-school whiteboard as the perfect bill-tracking tool. Keep it in a common area, and clearly note who owes what and when each bill is due. If you or your roomie plans to be away when bills come due, make sure payments are made before you take off. Each person can check off his or her payments as they are submitted. And everyone will be able to see who hasn’t paid what.

If you’d rather take a digital approach, you can try a money-management site such as WePay.com, ioweyou.co.uk or Buxfer.com. Each of these sites allows you to track specific expenses and share them with invited members. Everyone in the group will be able to see who has and has not paid. As with the whiteboard, this transparency may provide peer pressure for timely payments. With WePay.com, you can even set automatic bill reminders and let the site take care of that gentle nagging necessary to collect tardy payments without anyone having to play the bad guy.

Clarify the consequences of late payments and who will be responsible for paying any extra charges. You might even consider slapping irresponsible roommates with late penalties. Rich Aberman, founder of WePay.com, recommends a small fee of $1 or $2 for every day that the payment is overdue. “It’s not that I want to make extra money off my roommates,” says Aberman. “The extra cost is just an indication that they should take that deadline seriously.”

For example, Marilou Harrison, of Jacksonville, Fla., once had a roommate who needed to skip out six months earlier than expected because she could no longer afford the rent. Harrison couldn’t have covered the whole cost on her own and was not able to find a replacement roommate. Since they hadn’t discussed such a situation ahead of time, she easily could have gotten stuck paying at least half of the penalty -- one month’s worth of rent. Luckily, her former roommate eventually agreed to take full responsibility for the cost, and Harrison wisely got that agreement in writing -- signed and notarized -- and submitted it to the leasing office herself.

Talk about your housekeeping habits and how you’ll deal with cleaning up common areas. Will you share the cost of cleaning supplies? How will you divide household chores? What consequences will a sloppy slacker suffer? One San Diego resident, for example, employed a neat neatness incentive with his old roommate: “We wanted to keep the living room as clean as possible, so the rule was that at the end of the day, everything had to be clear,” he says. “If the next morning you had something lying out, you had to donate one dollar to the charity of the other person’s choice. It worked great.”

Besides general cleanliness, go over how you’ll handle any major damages and consider getting rental insurance. This coverage can ensure you’ll be reimbursed if your personal property is stolen or damaged, or if someone is injured on the premises. You and your roommates can all share a single policy, but each of you may be better off getting your own, just in case you need protection from each other or you don’t wind up bunking together as long as you expected. Policies tend to cost about $200 to $300 a year, depending on your location and level of coverage. You can compare plans at insweb.com. If you have an auto insurer, check that company’s rates for a renter’s insurance policy, too; you may score a discount for buying multiple policies from one company.

You and your roomies should also discuss the added mess of pets. If you decide to allow them, detail where they’ll be allowed and who will be responsible for them and any related damages. In my old digs, for example, my bedroom was a no-dogs-allowed zone, but my roommate’s and her frequently-visiting boyfriend’s pups were free to stay in her room and roam the common areas. She took full responsibility for the canines, including paying the extra monthly costs of keeping a pet in our place and cleaning up after them. (But I was happy to take them out when asked nicely and to enjoy plenty of slobbering puppy kisses and loving pit bull protection.)

Especially now, as food prices are going up, grocery bills are likely to be a touchy subject (see our infographic The Rising Cost of Food for how inflation is affecting your grocery bill). Decide what food costs, if any, you’re going to share and how you’re going to split the bill. A friend of mine recently moved into a group house where each resident contributes $150 monthly to a shared grocery fund. The cash was once kept in a jar, and withdrawals were (not) monitored by an honor system. But the group is now considering opening a joint checking account -- which would allow all house members to better track where the funds are going.

Of course, you might opt to keep your groceries separate. Just be sure to add Sharpies and Post-it Notes to your shopping list. After living in a group house where everyone was responsible for their own groceries, a former food-labeler says, “It always lead to problems where people would eat other people’s food, and then we’d leave passive-aggressive notes for each other.” The group tried to clarify ownership by writing their names on their food containers and having open discussions about the problem. But edible thievery continued. The sneaky snacker is still at large, but the victims have moved on to lives with more respectful roommates and without Post-it-covered foodstuffs.

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Rapacon joined Kiplinger in October 2007 as a reporter with Kiplinger's Personal Finance magazine and became an online editor for Kiplinger.com in June 2010. She previously served as editor of the "Starting Out" column, focusing on personal finance advice for people in their twenties and thirties.

Before joining Kiplinger, Rapacon worked as a senior research associate at b2b publishing house Judy Diamond Associates. She holds a B.A. degree in English from the George Washington University.