6 conversations you need to have to avoid awkward money situations with your roommates


I was living in my first adult apartment for over a year before I caught on to the fact that my roommate (a friend of a friend) was scamming me. Or was she? Other than the amount we’d pay for our individual rooms, we’d never actually discussed who would pay the bills or fill the fridge (more accurately, mini fridge, because we lived in Manhattan) or replace the dish and hand soap (evidently, no one) when necessary. Every month, the amount she’d bill me for utilities would increase, checks would mysteriously disappear and because she was older and I’d never dealt with a ConEd bill in my life — that is, until we got multiple shut-off notices — I just accepted the hundreds of dollars she said we needed to keep the lights on as fact.

It’s hard to say if her constant requests for money were intentionally deceptive or just a side effect of poor money management, but the point is, we should have had an upfront budgeting conversation before I ever wrote her a check (pre-Venmo living was wild). For roommates who are starting a new home together, or need to reassess their finances, these are the basic money conversations you absolutely need to have to ensure your household’s budgets are in check.

Clarify what everyone can afford

Understanding everyone’s individual budgeting priorities is important before settling on a household budget. For example, does your roommate prefer to always buy the cheapest toilet paper and pasta sauce or are you loyal to specific brands? And how much are you willing to pay for whatever you consider household necessities? “If one person can afford one amount, but someone can’t afford as much and the budget is set to reflect a higher amount than what everyone can afford, you will run into issues very quickly,” says personal finance blogger Dustyn Ferguson. “In the case that there are certain luxuries someone wants that others can’t afford, the sacrifice should be put on the one who wants that luxury and [they] should pay for it.”

Figure out how you want to track and talk about your budget

While a Google doc can be helpful and practical, it’s also invisible. Consider putting a budget sheet on the fridge which can help you and your roommates visualize different financial goals, whether it’s paying the electricity bill on time every month or saving up for a new couch. “When it comes to managing finances, you want to create a transparent and open environment for everyone to express concerns,” says personal finance blogger Elise Nguyen.

List all shared expenses and discuss how you want to divide them

Should someone pay a higher portion of the rent because they have more space? Should utilities be divided equally? Who’s in charge of buying household supplies? Are you going to cook together? Those are a few of the questions Nguyen suggests discussing, perhaps even before you move in. “This discussion needs to take place as early as possible to make sure everyone’s in agreement,” she says. Decide if you’ll share the same gallon of milk each week or each purchase your own. Will someone pay for Netflix and the other Hulu, and you’ll share streaming accounts? Think of what you typically spend money on and how you can fairly share costs.

Agree on a payment method

Deciding how the bills will be paid is huge. Will one roommate pay the bills on a credit card and send a Venmo request to the other roommate? Will you each set up utilities with direct deposit? How will you ensure your bills are being paid on time and a roommate fronting money is fairly reimbursed? Before any bills are due or you start splitting up the grocery receipt, discuss the method you plan to use to pay for everything — and keep track of it! A few twenties shuffling between hands each week can get confusing.


Consider variable expenses

“Variable expenses like electricity and water must be taken into consideration when establishing a budget with roommates,” says personal finance expert April Lee. “If these items aren’t included in your lease, how will you decide what temperature to set the thermostat, or who is responsible for the water bill that was twenty percent higher this month. Don’t wait until a large bill hits to argue about who is responsible for what. Talk about and agree on how you’ll address these concerns now, before they happen.” If one roommate loves blasting the A/C in the summer while you’re fine sweating a little bit to save some coin, try and compromise — maybe you pay less of the elevated bill or your roommate chips in more for ice cream over the summer. Lee also suggests putting some communal money into a “sinking fund” for unexpected utility overages. “That way when something does come up, the funds have been budgeted to account for it,” she says.

When does your budget change?

If one roommate is out of town for an extended period, should they still pay for the utilities? What if someone’s significant other who loves taking hot baths is sleeping over most nights of the week? And what are the expectations for the budget if one roommate runs into an emergency financial situation, like a layoff or unexpected medical expense? Discussing these stipulations before they happen and even setting monthly or quarterly meetings to reevaluate a budget can help prevent disputes and money mismanagement.