One of the biggest changes when moving into a shared house for the first time is deciding how to divide your various costs. Bill splitting also happens to be one of the biggest causes of household disagreements.
Whether you’re a second-year student moving off-campus with a group of friends, a group of young professionals sharing a property, a city slicker who needs to house-share to keep his costs low, or a couple who want to keep the financial burden of living together as fair as possible – how you split the bills is going to have a big impact on your relationship with your housemates.
We’ve broken down how you could choose to share your household costs – and what to avoid – to help you manage your existing or brand new house share.
Joint accounts for bill splitting
Let’s start with what to avoid when splitting bills. On the surface, setting up a joint account for your household bills seems to make a lot of sense. It ensures total transparency between housemates. It’s an effective way to make sure bills are paid in full and on time. It also tends to be straightforward for money management.
However, there are some serious financial risks that come with being tied to your housemates, particularly if you don’t know each other that well.
The potential financial risks
When you open a joint account with someone, you remain connected with them for far longer than you may realise. After the account is closed, you’re financially linked to everyone named on the account for another six years.
This means that anything they do in that time can impact your credit score. The hardships of someone you may never speak to again could affect your chances of getting a car, a mortgage and much more.
For this reason alone, getting a joint account for splitting your bills as a house-sharer isn’t generally recommended.
So, here’s what we would suggest.
1. Nominate a person for each bill
If you’ve ever shared before, you may have used this method to pay utility, broadband, and other bills. Each housemate can set up each bill using a different person’s account. The other housemates then pay their share monthly or quarterly.
The different bills that need setting up are:
- Gas and electric
- TV license
- Council tax (note: students are exempt from council tax)
The pros and cons
The advantage of this is that everyone’s shouldering their share every month or quarter. That means everyone’s more inclined to pay each other back— after all, it’s only fair.
Sometimes the maths can get a bit complicated if two flatmates get into the “if I subtract what you owe you for the gas bill and I’ll pay the rest for the water” debacle. Or, occasionally, you get that one person who simply refuses to pay up after months of nagging.
A simple spreadsheet
When you’re living with people you trust, managing this method shouldn’t come with too much stress.
To keep on top of who owes what, you can track of everything on a monthly basis through a simple spreadsheet. This will make any issues that may crop up simple to rectify, as you’ll have a detailed breakdown of who paid what and when.
This would also be useful to keep a note of the date that tariffs may change. The sheet then becomes a single source of truth for how much everyone should be paying each month.
2. Third-party, bill splitting platforms
Alternatively, with the rise of technology has come a million and one different ways of doing pretty much anything, and that includes paying your bills. Bill splitting apps are becoming increasingly popular with house-sharers, but they come in many different forms.
You can combine your utilities into a single amount through certain platforms, which split and charge them equally between each tenant.
Just as you would shop around for the best value energy provider, it’s worth comparing and contrasting your options when it comes to bill-splitting apps, as many leading platforms are completely free to use.
acasa is one, bill-splitting option
We know house sharing gets complicated, especially when it comes to splitting bills – that’s why we created acasa to do it for you. Plus, we’ve got some great deals on the household services you may still need to set up. In short, we’re the best housemate you’ve ever lived with.