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:
Specify how much each person will pay for rent and which room (or side of the room) each person will get. Especially if one room is bigger or comes with better perks (such as a nice view or its own bathroom), everyone needs to agree on the living situation. You may all decide that the person taking the biggest room ought to pay the biggest slice of rent.
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 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.
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. 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 group-house residents 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. Or if you’d rather take a digital approach, you can try a money-management site such as WePay.com (opens in new tab), ioweyou.co.uk (opens in new tab) or Buxfer.com (opens in new tab).
Be sure to address the length of your shared lease and the repercussions for anyone who wants to cut out early. If you break your lease, you’ll likely pay a hefty penalty and lose your security deposit. Or if you decide to stay, you’ll find your monthly costs double until you find a replacement roommate. Either way, the person heading out should bear the brunt of those costs.
Keeping It Clean
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.”
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 (opens in new tab). 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.)
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 is kept in a jar, and withdrawals are (not) monitored by an honor system. But the group is now considering opening a joint checking account, which would allow 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.
The cost of utilities can burn anyone up. In fact, our previously mentioned San Diego resident once had a roommate who used utilities to give him a wicked burn: “I had the utilities in my name, so when things got bad [between us], the dude blasted the heat with the windows open as long as possible,” he says. “He’s probably a hero for San Diego Gas & Electric right now.”
Crazy behavior aside, you might avoid paying for extreme temperatures on either end of the thermometer if you specify a moderate range of seasonal temperatures you’d like to stay within. And consider splitting the bill for utilities, so you all have an incentive to keep the costs down.
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.
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