How to Manage Shared Living Expenses

The pandemic has shown us the value of not living alone. During the lockdowns, a lot of people who live on their own found themselves suffering from anxiety, depression, and crushing loneliness. Having people around you makes it easier to cope with the effects of being cooped up at home for weeks and months on end. 

However, that also raises the question of managing shared finances. If you’re living with family, friends, flatmates, officemates, or partners, sharing those costs are going to be a major part of your life. Here are some tips on what can be done to prevent any problems in this area.

First, it’s important that you set some ground rules. Determine what costs are shared and not. Get everybody to agree. That way, you have a clear idea of how much each one needs to set aside for their monthly share. This is also a good time to bring up what you think should be shared costs and what should be tagged as personal expenses. That will help stop any of your roommates from helping themselves to your food in the fridge.

Come up with a system that will make it easier for all of you to pay the bill. Splitting the bill doesn’t mean that everyone must send a portion of that bill individually to the landlord. Or, if the landlord has a residential property management agent, to agent. What’s more ideal is to set up a collection system, so that the landlord receives the payment in full, without having to wait for a portion from you or one of your roommates. Be sure to remind everyone to pay on time, as this will affect the payment delivery schedule. Some landlords might penalize you or talk to you and your roommates about delayed payments, so make sure yours is always on time.

When you decide what costs must be shared, make sure it’s the same amount for everyone, regardless of how much they earn in a month. It’s not right that the one with the biggest salary will pay the biggest share of the expense. That shouldn't be how it’ll work. Or, set rates depending on how much you and the others get to use it. For instance, if you’re often not at home, it might be all right if you only pay a little of the electricity compared to someone who works from home and so uses the electricity nearly 24/7.

Another way to make it easier to buy any of the shared supplies for the house is to put up an account that anyone can use to get those supplies. That’s efficient and ensures that there’s always money for communal items. If the funds are always available, then anyone else from the household can simply use them to buy whatever the house needs. However, make sure to keep the money in the account small. Since it’ll be used by everyone, that could pose a security risk. 

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