How To Budget When Living With a Roommate

Two young students sitting on the kitchen, They are vlooging and preparing the meal.
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If you identify as a member of Generation Z, you might have had roommates your whole life. You shared a bedroom with your sibling. Parents or grandparents raised you. And then, you might have gone off to college or the military and had even more roommates, this time not related to you.

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But when it’s time to go out on your own, you just might find that you want to live with someone else for companionship — or because living solo can be mighty expensive, particularly in some of the priciest regions of the U.S.

Take, for example, living in Anaheim, California. It’s close to your work and to the amenities of the city — how can you top Disneyland and two pro sports teams? — but the one-bedroom apartment you love rents for about $2,000 a month. So with a friend in the same situation, why not live together? A two-bedroom, two-bathroom apartment in the same building costs a bit shy of $2,500  — or $1,250 per month per person, representing a savings of $750 a month. You decide to sign the lease, but that’s just the start of your adult venture of living with a roommate.

Make Your Money Work for You

Many more decisions await you before you move in and unpack the boxes. Read on for some tips to assure your co-habitation is congenial.

Make a Budget

You and your roommate — or roommates if you’ve found a place for three or more people — need to be on the same financial page before moving day. So set a budget that all of you agree on and is fair to the group.

Some expenses are made to be split equally: rent, utilities and internet service. If you subscribe to cable television, that’s another line item to share evenly, or you’ll have to determine how to share Netflix and other streaming apps. If you rent a house instead of an apartment, find out what your landlord pays for. If you’ll need to hire a lawn service, someone to maintain a pool or a plow person, split those equitably.

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Who Pays for What?

Then there are those other items. Who pays for food? Who buys the paper towels and laundry soap? That’s a gray area some people who are roommate-experienced say you probably should avoid sharing. Jessica Zhao, the chief marketing officer of sustainability company Spacewhite, is one of them.

“Before I became CMO, I was still living with a roommate,” she said. “How well do you know the person you’re going to be living with? That’s always the first question to ask when entering a new roommate agreement. If you have a high level of trust with the person, say they’re a longtime friend, then that’s an instance where you might consider sharing the expenses of more things, like food. If this is a situation where you’re moving into a space with someone completely new, my advice is not to share any costs. Split rent, utilities, internet 50/50 and have each roommate cover their own food expenses, cleaning supplies and paper products. Sure you’ll have double of some things but that’s actually a lot better than the headache that comes when you share and one person overuses and refuses to pay their fair share.”

Make Your Money Work for You

Whatever budget agreement you make, track the expenses on one of the many roommate apps available to hold all parties accountable.

Cathy Mills, director of strategy for Net Influencer, agrees food should be the responsibility of each individual. But, she said, roommates can be assigned other items as part of household responsibilities.

“Post a list in the kitchen with different tasks or purchases each person should do: cleaning the kitchen and bathrooms and the purchase of toiletries, such as soap for the dishwasher, as well as toilet paper for the bathroom, ” she said. “Then, each person should be responsible for purchasing these toiletries once a month, so that there are no misunderstandings.”

Read: These Are the 15 Best Cities for Gen Z To Live Well on a Budget

Roommate Agreement

If you’re a fan of “The Big Bang Theory,” you’ll know that Sheldon insisted on — and enforced — a roommate agreement with longtime roommate Leonard. Turns out many people favor Sheldon’s method.

The roommate agreement will set the expectations of your living arrangement, and on its website, LegalZoom recommends including the nitty-gritty. Start with the specifics of name, address, lease date, which bedroom each person occupies and details of the security deposit. Then, include the items in your budget — who pays for what — as well as apartment rules, according to LegalZoom. Those rules can include quiet hours, agreement to not use drugs, whether overnight guests are allowed and guidelines for parties or large gatherings.

Make Your Money Work for You

When you move into your new home, you’re doing so with the expectation of enjoying your space and your living circumstances. Figuring out financial issues and setting boundaries and rules ahead of time will only help.

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Make Your Money Work for You

About the Author

Jami Farkas holds a communications degree from California State University, Fullerton, and has worked as a reporter or editor at daily newspapers in all four corners of the United States. She brings to GOBankingRates experience as a sports editor, business editor, religion editor, digital editor — and more. With a passion for real estate, she passed the real estate licensing exam in her state and is still weighing whether to take the plunge into selling homes — or just writing about selling homes.
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