Published October 17, 2024 • 4 Min Read
TLDR
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Having financially responsible roommates can set you up for success.
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Have a plan to split expenses and assign bill payment responsibilities.
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Ongoing communication can help keep everyone on top of their financial responsibilities.
If you’re headed off to college or university, chances are you’ll be living with roommates. You’ll make friendships that last a lifetime — but communication is key to keeping money from coming between you and your roommates. Here’s how to get on the same page.
1. Have the money talk before you sign the lease
Find roommates who are mature enough to manage their money responsibly and will pay their fair share of the bills.
If you don’t know your roommate’s spending and saving habits, just ask. Find out how they plan to cover living expenses so you can feel confident they’ll be pitching in their share. If your gut tells you potential roommates might not be a good financial fit, listen to it.
2. Determine which bills you’re responsible for
Before you sign a lease, find out what expenses you’ll be responsible for versus what’s covered by the landlord.
In addition to rent you may need to pay:
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Rental deposit: A one-time payment to secure the rental, typically the equivalent of one month’s rent
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Tenant’s insurance: Required by some landlords, this covers accidental damage your unit or neighboring units. It can also insure your belongings.
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Read more: Why renters need tenant’s insurance
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Utilities: Water, electricity/hydro and/or heat.
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Internet, streaming services
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Furniture, window coverings, lighting and other miscellaneous costs
Once you have a place in mind, make a sample budget together to ensure every roommate can afford to live there. An upfront agreement on paying for shared services like internet and streaming can help prevent conflict later.
Pro tip: Make sure your numbers include moving and setup costs too — think internet installation fee and a refundable deposit to the utility company.
3. Know what happens if your roommate drops the ball
Even with the best of intentions, stuff can happen and it’s important to understand how your roommates’ financial actions can impact your life. Here are some things to consider:
What happens if:
My roommate doesn’t pay rent?
It depends. If you’ve signed separate lease agreements with your landlord, you may not be responsible for their share of the rent. But if you signed a lease together, you and any cosigners are on the hook for the total rent — even if your roommate doesn’t pay their fair share.
My roommate doesn’t pay a bill?
Whose name is on the bill? If it’s yours, you are responsible for paying the whole amount—even if you have an agreement to split the expense. If your roommate’s name is on the account and they aren’t paying it, contact the service provider about your options.
My roommate wants to move out?
If you signed separate agreements with the landlord and there’s still time left on each lease, it may be difficult for one roommate to move out without paying a penalty. The best next step is to talk to your landlord to discuss solutions.
4. Have occasional money chats once you move in
Regular check-ins with each other can keep you on the same page with finances. Keep it simple. Here are some ideas:
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Plan a regular money talk.
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Set up a shared doc that you can all update and access.
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Start a group chat that makes it easy to ask questions or remind each other about upcoming expenses.
Being prepared and up front with your financial responsibilities can keep you and your roommates on track all year. Plus, an open approach to money can help keep the peace, reducing misunderstandings and conflicts among the group.
Want more tips to set yourself up for financial success at school? Check out these smart money tips for living off campus.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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