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financial tips living with roommate

Sharing your living space with a complete stranger may not sound like an ideal situation but it can be a lifesaver when finances are tight. Taking on a roommate is a smart move if you’re looking to save money and you can’t afford to buy a house. But there are certain pitfalls that go along with communal living. In addition to navigating the rules about chores, socializing and personal boundaries, you’ll also have to figure out how to make it work financially. If you’re worried about a money miscommunication with your new roomie, here are some things you can do to keep conflicts to a minimum.

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1. Feel Them Out Financially

When you’re interviewing potential roommate candidates it’s important to find someone whose personality meshes well with yours but it’s best to also be on the lookout for someone who’s a good fit financially.

If you’re a saver and your roommate’s a spender who likes to blow their paycheck on designer shoes, that can lead to problems if you feel they’re not pulling their weight when it comes to paying the bills.

Asking general questions about their income, career goals and attitudes about money can help you find someone who’s on the same page.

2. Work out the Lease

4 Financial Tips for Living With a Roommate

Deciding whose name should go on the lease may not seem like a big deal but it can potentially have significant legal and financial implications if things don’t work out. When you put both parties on a lease, it entitles them to certain rights. If the person you’re living with turns out to be a nightmare, you may have to jump through legal hoops to get them out if they’re on the lease.

If you’ve already leased a place in your name only, having them sign a roommate agreement can give you certain protections if there’s a problem later on.

Related Article: The Top 9 Best Roommate Finders on the Web

3. Split Expenses

Figuring out how to divide expenses is another financial issue you’ll have to resolve with your roommate. You’ll both need to decide who’s going to be responsible for paying what. Certain things, such as rent, utilities and cable are typically shared equally, but you may need to pick up the tab for things like phone or Internet service yourself if your roommate won’t be using them. You should also discuss how the cost of groceries and personal care items will be divided and what your policy is on sharing.

In addition to dividing up individual expenses, you’ll want to work out how the bills are going to be paid each month. Assuming responsibility for handling all the bills each month can ensure that things are paid on time but it also puts you in the position of having to collect the money from your roommate. Divvying up who pays what creates some balance in the relationship but it only works if both of you are keeping up your end of the bargain.

4. Check in Regularly

4 Financial Tips for Living With a Roommate

If you and your roommate are on opposite schedules or you just don’t hang out that much, arranging a regular time to get together and discuss the bills is a must. Even if it’s just for a few minutes each week, you should set aside time to go over what needs to be paid, what bills are coming up and any irregular costs that need to be addressed, such as lawn maintenance or pest control.

It’s also a good time to bring any other issues to the table for discussion that aren’t related to the house. If you’re tired of your roommate stealing your socks or eating your secret stash of chocolate chip cookies, you want to get it out in the open before it escalates to a full-blown argument.

Related Article: 5 Financial Issues to Resolve With a New Roommate

The key to successfully living with another person is being able to communicate. Talking about your joint finances regularly can keep things running smoothly. Allowing a small issue to turn into a huge problem could end up costing you money if you have to replace your roommate on short notice.

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Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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