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How to Share Your Expenses with A Roommate or Partner

Sep 6, 2008
A cause of stress in many relationships is money. When a couple or roommates share expenses, arguments can happen quickly if people don't agree about how to best save money and meet those expenses. Many of these stressful arguments can be avoided, however, with good budgeting and communication skills. In this article, we'll talk about some of the problems that can happen with bad budgeting. We'll also give you some ways to handle budgeting and a new relationship.

There are four main problems that you can have from failing to create a budget.

1. Not Being Aware of Financial Changes

You may overestimate the amount of money you have if you don't know about outstanding debts and other financial obligations. If one half of the couple thinks that it is OK to buy an expensive item with "extra" money in the savings account, but doesn't know that that money isn't really extra, this may result in an argument. The other person in the relationship may feel that this money should be used to handle an increase or anticipated increases in housing, insurance, car, or other costs.

2. Having Increasing Debts

If you don't have a budget to show how much extra money you really have, you may be tempted to buy things, put them on your credit card, and then pay them off once you receive your extra money. You could then find out, however, that what looked like extra money was actually needed to pay your bills. Additionally, money that should be designated to cover living expenses like rent, bills, and food, but is then spent somewhere else, can result in your having to use credit cards to pay for your living expenses. These both can result in accumulating more debt and lowering your credit score. A low credit score can make financial problems worse; it can result in making it more difficult to get a mortgage, lease a living space, or get a good interest rate on a new car.

3. Having a Lack of Money for "Fun" Activities

Not budgeting can affect a couple's ability to go on vacations and spend time with their loved ones, which will lead to stress in the relationship. If a couple wants to take a vacation, but finds that they don't have the extra money, it may be impossible for them to take that trip.

Likewise, if a couple has more debt than they can handle, one or both members in the relationship may have to take second or third jobs to pay the bills. This will eventually leave the couple with less time to spend with family, friends, and each other.

4. Having a Lack of Harmony in the Relationship

Working long hours and worrying about your financial problems can cause fatigue and stress in an otherwise happy relationship. This extended tension can lead to the couple splitting up or getting divorced, and also may lead to resentment between you and your loved one.

Solutions for Couples and Roommates

You can resolve or avoid many financial problems by being open and honest about debts, income, and financial obligations. You also need to put very simple budgeting methods into place. Although general budgeting advice applies to anyone who pays bills, there are specific tips for couples and roommates in new relationships.

Couples:

You should consider whether it makes sense to combine your finances if you are married and haven't already done so. If you prepare a budget, you can make sure that your finances are managed correctly and reflect changes over time.

New Roommates:

It's very likely that roommates will go their separate ways when one or the other moves on to a different stage in life. This is why it's especially important that you should have separate finances from your roommates. Roommates who do not intend to share a life beyond friendship do not need to share details about income, assets, and debts. You should focus on whether each person can afford to pay his or her share of expenses.
  • 1. Discuss your financial habits before deciding to share a living space. This will help determine whether you have similar spending habits. There may be conflict if you have different attitudes about paying your obligations and spending money. Ask for references from former roommates and landlords.
  • 2. Prepare a hypothetical budget so you can figure out what expenses you'll need to cover. This lets you determine whether each person can afford his or her share of the expenses.
  • 3. Identify the expenses that you must pay every month, versus the expenses that you don't have to pay to have a place to live. Fixed expenses include rent, water, and electricity. Flexible expenses - those that you don't need - include premium cable and Internet services. You may have to eliminate these expenses if your resources are limited. You also should agree about who makes the decision for getting optional services and who will pay for them.
  • 4. Keep a separate budget that lists your income and any personal expenses. This will let you see if you can afford any optional expenses in the shared budget.
  • 5. Don't take on new expenses until you revise the group budget to include the expenses. You and your roommates should determine if the new expense is affordable, and everyone should agree that it is a valid expenses.
  • 6. Write up a formal agreement about how the expenses will be shared and what will happen if a roommate does not pay his or her share of the expense. You and your roommates should create a system to show how the expenses were crated, when they were paid, and who paid them.
What to Do Next

Not creating a budget can result in being unable to afford basic expenses, having increased debt, being evicted for failing to pay the rent, and losing your utilities. Your relationship may also deteriorate if you don't budget your expenses well. The honeymoon phase, however, may last for a long time if you keep communication open and honest. You should establish ground rules early on for expenses and financial habits, and continue to change and improve them as your relationship grows.
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