Managing Money with College Roommates

Moving out on your own can be one of the most exciting things about going off to college. After all, for many young adults, this is their first time living on their own away from their families. And while they may not technically be totally alone if living with roommates, being away from home for the first time means a whole new level of independence. It also means taking on certain responsibilities for the first time, which can be a little complicated at first when you’re living with someone else (or multiple people).

The financials can especially take some time to figure out, but with these tips and tricks, you’ll find yourself easily managing bills with your college roommates in no time.

Communication is key, even before living together

It’s important to openly discuss budgeting plans with your roommate(s) even before you move in together. Don’t assume every expense will be evenly split and have a plan to make sure payments are made on time. Every household will eventually settle on a plan that works best for them, but it’s important to clearly communicate these plans with one another and make sure everyone understands what they are responsible for. Without a clear plan in place, it can be difficult to manage and keep up with the household expenses. If you don’t seem compatible with a potential roommate during these initial stages, it could be a red flag that you aren’t meant to live together and help you avoid trouble down the road.

Decide on a plan that works best

Evenly splitting the expenses seems straightforward enough, but you’ll want to discuss what this means exactly. Will everyone be evenly splitting the shared expenses (such as rent and utilities)? What if one bedroom is larger than the others or has a private bathroom? Will each person take care of individual expenses – like groceries – on his or her own? What about shared needs like cleaning supplies and light bulbs? Talk through the details, and get advice from people who’ve been there to find out what did and didn’t work for them. Once you come up with an effective plan, put a calendar up on the wall that everyone can see as a simple way to know who owes what and when.

Get it in writing

Verbally discussing expenses and budgeting is fine at first, but you’ll want to get the important details in writing once you’ve got a plan. Otherwise people may not agree on what was decided, and it can be difficult to remember everything you discussed. There are a number of scenarios that could come up as you go, and you’ll want to discuss them ahead of time. For example, if one of your roommates doesn’t watch television, should he or she still pitch in for the cable bill? Or how will utility bills work if one of your roommates will be traveling most of the month? These are just a few possible scenarios to consider.

Get everything in writing: how you’ll address certain scenarios, who owes what, the amount they’ll owe, when they’ll owe it each month, and so on. Be sure you and all of your roommates thoroughly read the agreement, understand how the agreement will work, and sign it. This way, if there is ever a dispute, you’ll have all the details right there in black and white.

Take advantage of useful apps

These days, there are apps for just about everything, including money management. From sending money to paying bills, there are several useful tools that can help you and your roommates manage a household budget.

SplitWise makes budgeting and sharing expenses a piece of cake by doing all the math for users; the app also sends notifications and reminders for upcoming bills and payment deadlines. While you can’t actually pay someone with this app, it’s a very useful tool for tracking expenses and seeing who still owes what in any given month.

Venmo, on the other hand, is a popular app that makes it simple for users to pay each other with a debit card, bank account, or credit card.

Some other effective apps that can help roommates manage their household budgets include SquareCash, Goodbudget, and RentShare.

Household expenses during the college years can be overwhelming, and they’re often underestimated. While roommates can help ease the financial burden of these costs, it can also make things a bit complicated in certain situations. If you need help paying for living expenses during college, College Ave Student Loans may be able to help. Learn more about the different student loans we offer and how you can get the money you need to help cover extra costs like room & board while you’re in school.

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