Moving in as a couple or with roommates is a considerably big step for many Canadians. Pulling the money card can be an uncomfortable topic for some.
However, it is important to get the topic out clearly and set boundaries when it comes to costs and expenses. Especially when couples or roommates share a space, utility bills can rack up a fortune.
Conflict can easily arise if you are not clear from the start with your partner or roommate about your financial budget and money boundaries. Living with another person may be economical, but it is crucial to ensure everyone is on the same page before moving in together.
Here is a helpful guide on how to talk about splitting utility bills with others in the home.
How to Split Utility Cost
Determine your monthly expenses
Firstly, it is important to consider your living situation as if you are individually supporting yourself. Calculate how much you could afford to live solo. After you discover that number based on your salary, you can use that as a starting point to determine your budget for any monthly bills that may come up.
Many apps like Honeydue help couples track shared bills, look at their accounts in one place, and comment on any transactions.
Another app that has similar features is BetterHaves. It helps you track and label expenses like groceries, internet bills, cable, gas, and phone to bring awareness to how much money you spend in every category.
Decide your contribution amount
Once you have determined your monthly expenses and how much you typically spend on your bills, you will have to chat with your partner or roommate about the logistics of sharing the utility fees.
Decide if you will go dutch and split everything fifty-fifty or according to income. There are different ways to go about it if you prefer to split expenses according to the amount you consume, water, gas, etc.
Although, it might be difficult to truly accurately estimate how much each roommate is actually consuming, which brings us to our next point.
Consider a joint expense account
Consider combining your money into a joint account if you are a couple. Sharing a joint account will make it much easier for both of you to pay the bills from one place and keep track of all the transactions.
Each partner can see what bills are being paid and how much is going towards the hydro bill versus the water bill.
Make a pact
We all have fallen victim to forgetting our promises or incorrectly recalling verbal contracts we have made in the past. Sharing a space and dividing bills and utility expenses is a serious thing that can have negative consequences if both parties are unclear.
Hold each other accountable for the expenses associated with the space and the percentage in how you are dividing the payments up by writing it down.
Take some time to keep track of your contract on paper or an excel spreadsheet and the agreed-upon amounts. This way, if there is ever any confusion, you can always refer back to the spreadsheet.
Set boundaries
Depending on where you choose to settle down, your utility bill amounts will look different. If it is a bigger space, your hydro bill will likely be higher in the summer to keep your AC blasting.
Therefore, if you prefer to live in a bigger place you know your partner or roommate cannot afford, you will have to be considerate of their budget allowance.
Either be willing to foot more of the utility bill if you prefer to have your entire home cool during the summer or look for a smaller place that is cheaper to keep the AC on.
Check in with your partner or roommate
It is important to touch base with your roommate or partner to review your utility bills and ensure everyone is doing their part. If there is a late fee, it is crucial to address the situation before it escalates into future conflict.
If your partner or roommate is the guilty culprit behind all the late bills, it is encouraged to remind them of the pact made and refer back to your contract. Help them understand that paying bills late can become quite expensive over time and negatively harm their living arrangement.
Sharing a space with someone can be economical in the long run, but it is essential to make sure that the division of expenses, including utility bills, is clear before moving in together.
