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The Best (and Worst) Expense-Sharing Strategies for Roommates

Kristin McGrath

November 9, 2012

Last week, I blogged about the financial complications of living with a significant other. Yet living with regular, platonic roommates involves financial trust and financial risks as well.

I’ve gone through 10 roommates in the past six years. Some were friends. Some were friends of friends. Others were Craigslist finds. Although I’ve never had a bad roommate (just lucky, I guess), sharing space and splitting bills can be a hassle.

Here some of the expense-splitting strategies I’ve tried — and some I’ll never try again.

The point-person method
File this under the never-try-again category. The point person method involves choosing a single person to keep track of bills, tally up what each person owes, collect payments from the roommates and submit those payments to the landlord, utility companies and the cable company.

Pros: The roommate who volunteers for these duties is generally one of those responsible, “Type-A” people who can be trusted to keep track of paperwork and do what’s necessary to extract payments from the other housemates. Bills get paid on time, every month.

Cons: Anyone who has ever been a point person knows that it is a chore, that roommates ignore all friendly payment reminders and that the point person will inevitably be resented for doing the nagging necessary to prevent everyone from getting evicted.

The powwow method
The powwow method involves gathering all the roommates in the same room (usually right before rent is due). Everyone brings receipts for the stuff they’ve bought for the apartment that month (like shared food, or party and cleaning supplies). Utility bills are examined and discussed as a group, and solutions are proposed for lowering them.

Someone (who, in the above method, would have been the point person) opens up a spreadsheet and enters all the data in to calculate who owes what. Everyone writes out a check then and there. Beer and pizza follow to celebrate another month of fiscal responsibility.

Pros: Everyone is forced to acknowledge the money being spent on food and utilities, and those who leave their TVs and lights on while at work are compelled to answer for their crimes. Budgeting and calculating expenses become a team effort rather than a thankless, solitary one.

Cons: Finding time in everyone’s busy schedules for the powwow can be a challenge. Plus, powwows can easily turn into airings of grievances that last hours.

The multiple-point-persons method
While there may be no perfect solution, this one is the best I’ve found. Each roommate signs up for a specific expense. For example, in a three-person household, those expenses may be rent, utilities and cable/Internet. Each person is responsible for keeping track of due dates and balances for his or her expense, collecting checks from the other roommates and sending the payments in on time.

Pros: No single person is stuck with all the responsibility. It’s also a highly efficient method if the roommates have different schedules. I once lived with two people I hardly ever saw. Each roommate hung an envelope on the fridge every month with Post-its showing how much each person owed and when the bill was due. The others could then simply slip their checks in that envelope, and the point person could pop it in the mail.

Cons: Because everyone has an expense to keep track of, the most irresponsible person you live with will also have an expense to keep track of — or rather, neglect to keep track of.

An easier way?
Just as there are apps and online tools that help you organize your finances and track your spending, there are roommate expense-sharing tools that do all the dirty work for you.

RentShare is a clever tool I wish I’d known about. Simply enter how much your total rent is, and the program splits it up among all the roommates and sends each person a payment reminder. Roommates can then enter expenses they’ve contributed toward the apartment, and the program adjusts the rent each person owes accordingly. It will even debit the amount owed from each roommate’s bank account and send the money directly to the landlord. The program is free, assuming everyone allows direct debits from their bank accounts.

With reining in your living expenses in mind, here are some of the best money blog posts of the week:

Frugal Confessions explains how to reduce the cost of doing laundry.

Financial Highway presents a list of frugal fall wardrobe staples that last.

Squirrelers lists some ways you might be sacrificing your health for money.

You Have More Than You Think offers some tips for creating an affordable home gym in a small space.

My Alternate Life suggests some ways to have a minimalist Christmas.

Money Crashers compares the costs of buying and renting a home.