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 in the clear 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.
If you are not clear from the start with your partner or roommate about your financial budget and money boundaries, conflict can easily arise. 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 the utility bills with others in the home.
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.
There are many apps like Honeydue to help couples track shared bills, look at their accounts in one place, and make comments on any transactions. Another app that has similar features is BetterHaves. It helps you to track and label expenses like groceries, internet bill, cable, gas, and phone in order to bring awareness to how much money you are spending in every separate 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 are going to 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
If you are a couple, consider combining your money into a joint account. By sharing a joint account, it 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 for example.
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 on paper or on an excel spreadsheet of your contract and the agreed-upon amounts. This way, if there is ever any confusion, you can always refer back to the spreadsheet.
Depending on the place you choose to settle down in, your utility bill amounts will look different. If it is a bigger space, it is likely your hydro bill will 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 go over 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 can 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.