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Key takeaways:

  • Splitting rent and other living expenses with roommates can be a great way to save money.
  • Having honest conversations about money with your roommates will ensure you’re all on the same page about which expenses to share — and will help you avoid fights.
  • Set ground rules for shared expenses — including how they’ll be split, who will make payments, and how to track them — and write them up in a roommate agreement.
  • Approach money talks with honesty, be an active listener, and compromise when you need to so you can come up with a plan that works for everyone.

With monthly rents in Canada on the rise — up 8.4% on average on all property types in the past year alone1 — sharing a living space with roommates can be a smart way to save money. By splitting the rent on a larger house or apartment, you can often pay less than if you lived solo in a one bedroom or studio. Plus, you can also share the cost of utility bills, groceries and other household expenses.

But first, you should sit down with your roommates and talk about finances. It can be an awkward topic to bring up — so, you might be tempted to skip “the money talk” and hope the numbers simply sort themselves out (don’t count on it.)

Read on to see why it’s key to talk about money with your roommates and learn how to approach these could-be cringe-worthy conversations with ease.

Benefits of talking about money with your roommates

While it might take you outside your comfort zone, having honest chats in person about money with roommates helps to:

  • Create a space where people respect each other. Knowing each other’s financial situations and budget constraints — like who’s working to repay student loans — helps you better understand the people you live with.
  • Avoid fights. An argument over who should cover what bill can cause tension and even put the living arrangement in danger.
  • Let everyone know what to expect. Whether it’s how to split an expense or create a payment schedule, asking tough questions allows you to face each challenge head-on.
  • Promote open communication. When you can talk about money matters, you set the stage for dealing with other aspects of shared living, such as household chores, personal space and future plans.
  • Steer clear of roommate scams. Scammers tend to give excuses as to why they can’t meet in person. If you insist on a face-to-face chat before any money changes hands, it’ll help you avoid rental scams and roommate fraud

Discussing shared expenses

It's important to decide which monthly bills to share and which to keep separate when you live with others. While there’s no one-size-fits-all way to do this, here are some shared expenses that roommates often bring to the table, and how you might split these costs.

Monthly rent

Sharing the cost of renting your space is a big bonus of having roommates.

How to split: It may make the most sense for each roommate to pay the landlord directly, if that’s an option. That way, no one is on the hook for the full rent and left waiting for people to repay them. 

Utility bills

These bills include electricity, water, gas, home phone (landline) and internet.

How to split: You can share these costs equally or base who owes what on factors like room size, income or usage. For instance, if one roommate uses a space heater to keep their bedroom toasty all winter and another blasts a bedroom window AC unit in the summer, they might take on a larger share of the electricity bill during those months.

Groceries and household items

You might choose to eat meals together and take turns cooking, or to keep groceries separate and assign each roommate a section of the fridge and pantry. But even if you each prefer to do your own thing, it might be worthwhile to share some food items that go bad quickly, such as milk, eggs, bread and fresh produce. Same goes for things that are cheaper to buy in bulk, like toilet paper, paper towels and cleaning supplies.

How to split: You can create a shopping plan with a detailed budget for food you share, set up a joint grocery fund or take turns buying shared items.

Services and subscriptions

Streaming services, cable or online news subscriptions can all be shared — if that’s what you agree to.

How to split: Decide on a method for roommates to pay their fair share. You might rotate who's responsible or set up a shared fund for these monthly bills.

One-time joint expenses

These might include repairs or furniture for common spaces, small appliances or items for special events — like holiday decor.

How to split: One person can pick up the full cost — but then they’re within their rights to take the item with them when they move out. You can also split the costs evenly or base who pays what on income and ability, or set up a special fund.

Establishing ground rules

Now that you know which living expenses you can share, schedule a meeting with your roommates so you can talk about how — or whether — you prefer to split them. But it’s not enough to decide how much each roommate will pay. It’s also important to:

  • Set a schedule for payments, so no bills get forgotten about
  • Come up with a shared-expense tracking system, to make sure each person pays what they agreed to
  • Draft a written roommate agreement to refer back to

Here’s a bit more detail on setting each of these ground rules.

Set a schedule for payments

It’s crucial to know who’s paying each bill and when. Set a clear timetable for payments, which includes due dates, who’s responsible and a record of when each payment was made and from which account (such as a credit card, chequing account or savings account). This can be a shared spreadsheet or document — and don’t forget to add any one-time or unexpected expenses as they come up. 

Come up with a shared-expense tracking system

The simplest way to track that each roomie pays their fair share may be to open a joint bank acount for joint expenses. Otherwise, you’ll need some other way to make sure roommates pay what they owe. For example, you could add up all the payments each person makes and then settle up with e-transfers or cash payments on a monthly basis. There are also apps that can help track joint expenses. 

Draft a written roommate agreement

A roommate agreement helps make sure everyone does what they agree to do. Be sure to work on it together with your roommates so that it’s built with everyone’s input.

For financial obligations:

  • Breakdown of expenses you’ll share and how you’ll split them
  • A clear payment schedule for shared bills and a system for tracking these payments
  • How you'll handle repairs to shared items
  • Consequences for breaking the agreement and any related financial responsibilities

A roommate agreement can and should address other items, too. You can set rules on chores and cleaning common spaces, quiet hours and guests, and how you'll handle conflicts between roommates.

Once you all agree on the terms, have each roommate sign and keep a copy. It's also smart to review the agreement when circumstances change (like if one of your roommates is moving out or if someone new is moving in).

Tips for having financial conversations

If you’re still uneasy at the prospect of having the money talk with your roommates, here are some tips to help your discussion go more smoothly.

  • Choose a time and place when you’re all relaxed and can give your full attention.
  • Be honest and open to build trust.
  • Practise active listening — put away devices, withhold judgement and avoid interrupting.
  • Be ready to compromise — you might not get your way on each point, so know which items are deal breakers for you and which ones aren’t.

The bottom line

Talking about money with roommates may feel intimidating, but it can save you a world of pain (not to mention, cash!). So, go ahead, have the money talk. You and your roommates will be glad you did.

Ready to get your investments on track for your future? Come in and speak to a Scotia advisor today