Great you’ve found yourself a property and chosen who to live with, now for the next part – sharing finances. You will need to specify some ground rules and go through a checklist of things that need to be sorted when splitting the bills. The most common bills when flatting are:
Gas + Electricity
Other miscellaneous items e.g. toilet paper, decorations, etc
To get you started, Letslivehere have come up with tips for splitting the costs when sharing accommodation:
Set the ground rules
Talk it out with your flat mates before you start joining service providers. Get to know everyone budget and how you will face any finance issues. For example, you may want to discuss the option of paying for a TV licence – will everyone pay even if some individuals don’t watch? What happens if you go on holiday for a month, will you still have to contribute to bills? How long can a friend or partner can stay till you have to cover extra costs? It may not all apply at once, but it’s better to be aware of how your flat mates will deal with the unknown.
Allocate a bill to each flatmate
This is the most common way to deal with bills – allocate each flatmate an equal share of bills so the responsibility is spread among everyone. If some bills are bigger than others, such as power compared to TV licence, think about giving all the small bills to one flatmate to even it out. All you have to do is have enough funds in your account to cover the bill before everyone pays. Once you have allocated the bills, calculate how much everyone owes each month – for most bills this amount should remain the same each month.
Put everyone’s names on the bills
By putting all your flatmates names on the bills means that everyone is less likely to make late payments as it will affect not only their credit score, but everyone else’s.
Get services sorted ASAP
It can take services a while to set-up, such as internet, therefore we suggest getting in touch with your providers as soon as possible. Some services only offer 12 month contracts – the last thing you want is to come to the end of your tenancy and still have a few months left on your service contracts (and yes, some do have cancellation fees).
Look at all-inclusive options
A selection of landlords and student blocks are willing to include bills if you ask. It means no relying on other flatmates, less stress and can sometimes work out cheaper.
Make note of meter readings regularly
Taking meter readings regularly ensures that you aren’t overpaying or underpaying your power or water bill. The last thing you want is to reach the end of your contract and find out you’ve been underpaying, meaning you have to pay a bigger lump payment. It is essential to take meter readings before moving in and after moving out.
Set-up Direct Debits
Setting up direct debits can save you the hassle, and sometime money. If any bills have set amounts each month it may be worth asking everyone to set-up DD to your account the day the bill is due – this way you aren’t chasing everyone every month. Some services prefer payments by DD and may shave off a few pounds if you opt to do so.
Split big quarterly bills
Big service providers for water and power usually provide bills every 3 months. Do not wait till the bill arrives and pay in a lump sum. We’ve found it best to ask your service providers a rough monthly bill figure based on old tenants. Then get everyone to pay a set amount every month so you’re not left with a massive bill at the end (which is more likely that people will struggle to pay). Some service providers have a DD option, which builds up credit in your account until the 3 month bill is due.
Start a ‘house kitty bank’
What do we need a ‘kitty bank’ for, you ask? A house kitty bank comes in handy for minor household things, such as, toilet paper and cleaning products. It can also help go towards any minor repairs like marks on walls and blown light bulbs. As little as £5 each month per person will be more than enough.
May not be applicable to everyone, but not all properties are fully furnished or provide white goods. Items like a toaster, kettle or cutlery, are things that you and your flatmates need to purchase. It may be best to sit down with everyone at the start of your tenancy and figure out the best way to buy items. You may want to buy all the items together and split the cost, or allocate different items to different people (this works best when you want to take the items home with you at the end of the tenancy).