How to Pay Bills and Manage a House Budget with Roommates
August 26, 2014

Living with roommates can be a challenge, but it’s something that most college students have to go through at least once in their lives. If you’re stuck in a house with other people, you need to figure out how the bills are going to work. Who will take care of the electricity bill? How will you split up rent? What type of internet will you have in the house? These are all questions worth addressing with your roommates so you can get your finances in order.

When you have roommates, it's important to work out bills and finances ahead of time.Image source: Flickr CC user William Brawley

When you have roommates, it’s important to work out bills and finances ahead of time.
Image source: Flickr CC user William Brawley

Figure Out What Your Bills Will Be

Before you start splitting up costs and assigning various people to pay bills, you need to know what your bills are going to be each month. Some common household bills to keep in mind include:

  • Rent
  • Electricity
  • Water
  • Gas (when applicable)
  • Sewer and Trash
  • Cable or Satellite
  • Internet
  • House Phone (when applicable)

You can get a quote for most of these bills ahead of time so you can plan out your monthly budget. The exceptions to this are the utility bills (water, electricity, sewer, etc.). These bills are based on your monthly usage, which you cannot predict until you get into the home for a few months. Ask your utility service providers what the average bills were for the former tenants, and also ask what their highest bill was in the past 12 months. Plan to set out enough money to cover even more than that highest bill just to be on the safe side.

Note: It would be a good idea for each of you to maintain renter’s insurance on your property, especially if you have expensive furniture and electronics. Renter’s insurance usually only costs $20 a month or so, and it will protect the value in your belongings if there is ever a fire, flood, robbery, or other issue in your home. You can each get renter’s insurance through your auto insurance providers, or you can join forces and put everything on one account. Your landlord may even require you to get renter’s insurance when you sign your lease, so keep this in mind.

How to Split Up the Bills

The easiest way to split household bills between roommates is to calculate what the total cost will be for the month and divide it evenly between roommates. The only reason this may become an issue is if one roommate gets a larger room in the house or needs to pay for a different service than the other roommates. For instance, if one roommate needs to upload and download files on the internet, he may need a higher internet speed than what everyone else might want to pay for. You will have to negotiate terms at that point to determine what everyone thinks is fair to pay.

Autodraft – The Easiest Way to Pay Bills with Roommates

There are plenty of ways to go about paying your bills with roommates, but a lot of them lead to trouble. If someone doesn’t pay a certain bill on time, that puts everyone else in jeopardy. One option that prevents this from happening is by using autodraft from a joint savings account:

  1. Set up a joint savings account for everyone in the household. If you do not trust each other well enough to know that no one will take money from the account, you could set it up so that all of you have to be present to authorize a withdrawal.
  2. Create an automatic draft from each of your bank accounts to deposit money into this account each month. If you are not comfortable with this, you could also just ask everyone to make a deposit early on in the month, far before the bills are due.
  3. Set up another autodraft, but this time make it go from the joint account to each of the bill companies you have to pay. This way, you won’t have to worry about making sure the bills get paid on time. They will automatically be paid for you, as long as you all maintain your contributions to the account.
  4. Check your monthly bills to make sure there aren’t any charges that exceed what you have put away. If so, make sure you all discuss those charges as a group and put the right amount of money into the account.
  5. If there are extra funds left over, do not withdraw them. Leave them in there to cover possible overages in the future. If you have money left at the end of your lease, you can split it up amongst yourselves.

There are risks in this setup, like if one person doesn’t have enough money in his personal account to go into the joint account. Nevertheless, this tends to be the safest and most hassle-free way to pay bills with roommates. Test it out for yourself and see if it works for you.

Other Ways to Pay Bills with Roommates

If you don’t like the idea of having a bunch of auto drafts set up in your name, the alternatives below will give you some alternatives when managing a house budget with roommates:

  • Put one person in charge of paying all of the bills for the house. Then have everyone else pay him or her month to month.
  • Make different people responsible for different bills. One roommate pays the rent, one roommate pays cable, and another roommate pays gas, etc. This is hard to divide, but at least then you are splitting up the responsibilities.
  • Ask your utility providers, cable company, landlord, and more to set you all up on separate bills for the same account. Then all you have to do is pay your bill when it comes in. Most companies will not do this, but it cannot hurt to ask.

Don’t forget about your personal budget on top of your monthly bills!’s free student loan tool can help explore loan repayment plans to get your debt paid off fast. Be sure to read our blog as well to see more great money management strategies.