Getting ready to move in with a roommate or two for the first time? If so, you probably have all kinds of questions on your mind.
You may be thinking about how to divvy up household chores or who gets which bedroom. But, you might also want to turn your attention to how you plan to split the rent. After all, sharing the rent and other bills is one of the best benefits of living with roommates as this can save you loads of money.
So, before you move into your new abode, take the time to figure out how you’ll split bills and transfer money with your roommates. Along with that, make sure you sign a roommate agreement with your housemates as this will help you all avoid problems down the line.
To make things easier for you, take a look at our suggestions for living with roomies.
Create a Plan
Among the many perks of living with roommates, you can live in neighborhood or home that you may not be able to afford on your own.
But, before you decide to move in with roommates, come up with a plan ahead of time about how you will share the rent and other household costs. This may help you avoid future disagreements about who should be paying for what if money gets tight.
Because discussing money can be stressful, make this conversation more relaxed by sitting down with your future housemates over pizza or snacks to talk about rent and other shared bills. During this time, you can jointly decide how to divide up bills and any expenses that won’t be shared. It’s also a good idea to designate one person to take notes and write down all that was agreed upon. This helps avoid confusion down the line.
View Rentals Together
If possible, view rentals together so everyone gets a say. Discuss the advantages and disadvantages of each property so that you and your roommates can decide together on the best place to live.
If you can’t all go together to look at rental properties, try to go separately. Once everyone has seen all of the options, you can get together to compare notes and make a final decision.
Arriving at How Much Rent Each Will Pay
There is more than one way to figure out how much rent each of you will pay. As with many things, some calculations are simpler and others are more complicated. Here are three ways you might decide to split the rent.
Divide Evenly by Number of People
Perhaps the easiest way to figure out who pays what is to simply divide the total rent paid by the number of people living there. This doesn’t require figuring out specific room sizes and often works well if the bedrooms are about the same size.
By Bedroom Size
Oftentimes bedrooms will be different sizes – some bigger, some smaller. If some rooms are significantly bigger than others – perhaps offering larger closets or private bathrooms – it’s important to decide who will get which bedroom. And, this often means some roomies pay more than others. A simple way to factor in the rent here is to take the square footage of each bedroom and divide by the total square footage of the rental.
This figure represents what percentage of the total space each person occupies. Once you have this number, you can multiply it by the total rent payment to arrive at a rent amount for each person.
Figure in Extras
Something else to think about that was briefly touched on above is how to figure in any extras. For example, what if one person’s room has a larger closet or an en-suite bathroom? Or, what if one of the rooms open to an apartment complex pool or has a private balcony?
This might require putting a price on each “extra”. Once you have added these assigned extra costs into your basic rent figures, you will have a more accurate breakdown of the amount that each roommate should pay.
Create a Roommate Agreement
Now that you’ve found a place and decided how you’ll split the rent, it’s time to draw up a roommate agreement. This is a good place to include which room each roommate is assigned and how much the rent will be for each person. Also, you can use this agreement to detail how you will deal with the situation if someone decides to move out. Lastly, be sure to designate when rent will be collected from all to be paid to your landlord.
Once you have a roommate contract, make sure everyone signs it before the lease is finalized. Having an agreement like this in writing will help prevent arguments later. It can also ensure that nobody tries to renege on what was jointly decided upon.
Tips to Split Rent in a Stress-free Way
You may have heard your friends complain about this awkward situation: one person pays the rent yet has to repeatedly ask for money from the others. It does make sense for one person to be the collector as, after all, sending in multiple rent checks to your landlord gets confusing and the building manager may only accept one check or payment.
To avoid this issue, it’s best for one person to collect rent from their roommates sooner rather than later. And, to help ease the awkwardness of this situation, you have a few other options. You could designate a certain day of the month when rent checks are due to the roommate footing the bill. You might even pick a location for checks, such as a basket on the living room coffee table or a clip magnet on the fridge. Or, better yet, you can use an online tool like Venmo or a bank account like Chime. Chime members have the option to pay friends instantly on through the Chime mobile banking app or website.
Once you all move in, it’s a wise idea to meet regularly to discuss anything that needs to be addressed in your shared home. Getting together on a regular basis for a roommate pow-wow also gives you all a chance to work through disagreements that may arise from time to time.
Keep in mind that moving in with other people can be stressful. But, if you mind your money manners and use the above tips, you may find that you can save money and enjoy your new roommates – at the same time.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.