Managing money issues in a shared house

Managing money issues in a shared house

Moving into a shared house can be really exciting, but sometimes sorting out all the bills can be a bit overwhelming and stressful if you and your housemates haven’t established a few ground rules for splitting the expenses fairly. This fact sheet identifies some options to help you manage your finances as well as a few ways of minimising conflicts while living in a share house, which will hopefully lead to your share house experience being as stress-free as possible.

Splitting the costs - tips for ensuring housemates pay their fair share

1.  Establish a kitty

A kitty is where everybody contributes a set amount of money to cover costs like cleaning products and other essential items. This might also include food, if you decide to share cooking duties and food. The kitty can be kept by one person or kept somewhere in the house. It’s up to you and your housemates to work out what the money in the kitty is to be used for. Try to remember that kitty rules vary from house to house, so it’s important to make sure that you and your housemates have discussed this from the start.   Whatever kitty rules your household settles on, it’s a good idea to ensure everyone is aware of the game plan and that the house reviews the rules from time to time to ensure everyone still considers the outcome to be fair. If you don’t feel comfortable with trusting just one person with the kitty, another option is to agree to alternate buying the essential items.

2. Working out utility bills

The easiest way of working out utility bills (ie water, gas and electricity) might simply be to split them equally among all of the people in the house. However, there are a few precautions you can take to ensure that no one is left with big debts if someone decides to move out of the house without paying the bills.  

Some precautions

• Names on utility bills -  if your utility companies will let you put the bills in everyone’s name, this is can be good idea, so that each house member is authorised to discuss the account with the utility company. However, just because the bill has more than one name on it, doesn’t mean that you will only be liable for your share if things go wrong. Everyone whose name is on a joint account can be held fully responsible for the whole debt. No matter whose name is on the bills it is important for steps to be taken to prevent big debts, by establishing payment plans.

• Utility payment plans -  the costs of utilities can be a big burden, especially with seasonal use of appliances such as heaters. Your utility company might be able to provide you with payment plan options to meet the cost of utilities.

Working out telephone bills

Phone bills can often cause tension in a shared house, particularly if people forget that they made an overseas phone call, or rang the football competition hotline ten times. To avoid these conflicts, there are a number of options your shared household can pursue.

Most shared households split costs such as rental, fees and local calls equally, while paying for any mobile, local or international calls, which are itemised on the bill. It can sometimes be helpful to keep a notebook next to the phone to write down numbers each person has made. This can make it easier to work out who the bill when it comes.

If you don’t want to share your phone bills, perhaps because everyone has their own mobile, consider getting a phone service that provides the household with incoming calls only. However, this does not resolve the all too-familiar complaint of house members failing to pass on phone messages.

Some phone companies have recognised the needs of shared households and provide a phone service, where each member of the house gets their own phone account. The account gives you your own personal phone number with a 'pin' to access outgoing calls and messages. This type of service might cost extra but it may be worth it to prevent conflicts from occurring.