Living with other people can either be a pain or the best time of your life. Many suggestions for living with roommates deal with cleaning or other pet peeves. One that is rarely addressed is the issue of money: how to aggregate and pay for things with transparency.
One suggestion we have is to open a joint bank account between you and your roommates. While scary, this can actually help you to ensure that your roommate/s is splitting the bills instead of sticking you with an unpaid pay-per view bill!
- Make sure that the account is transparent so each party can see all deposits and withdrawals.
- Create only one debit card to ensure charges are tracked appropriately and only used to pay online bills that are split between roommates.
- Having a joint account means you can track expenses and go after delinquent roommates legally. If you sign a lease and one person does not pay, legally the lessor can evict both of you. Having the tracking of a joint account makes it significantly easier to prove things in small claims court.
- Build a small buffer of extra cash to aide when bills rise unexpectedly, i.e when the heat causes your electricity bill to spike.
- Remember that the joint account affects both parties credit, but since your already living together such issues should already have been considered and if they have not been addressed DO NOT LIVE WITH THOSE PEOPLE.
- Splitting bills between roommates can work beautifully, but if one party does not contribute their share it can quickly cause credit dings if the person whose name is on the bill cannot pay the balance. This method aides in convincing a court (if it comes to that) and credit agencies to help you in such situations. Additionally living with other people is like running a business, you should never run business expenses out of a personal account.
- When the lease is terminated all parties should close the account or zero out the balance to automatically close the account.
Hopefully a joint account can save you and your roommates some headaches. In the past it has worked well for us and was a much better solution that trying to run all of the rent and other collective payments through different individuals.