How to Split the Utility Bill with Your Roommates

Renting with roommates often brings out some difficult conversations. After figuring out how much everyone will be paying for rent, the next financial conversation will likely be about utilities. Hopefully, you have a solid understanding of what your utility bill will look like. If not, this guide should help you estimate. When that first wave of bills hits, make sure you and your roommates are on the same page.

How to Split the Utility Bill with Roommates

Divide Equally

This is the simplest way to split bills, and it works well for roommates with similar usage habits and square footage in their rooms. Here's how to do it:

1. Gather the bill amount. This is the total amount due for the utility bill.
2. Count the number of roommates.
3. Divide the bill amount by the number of roommates. This will give you the amount that each roommate owes.

For example, if the total electric bill is $100 and there are three roommates, then each roommate would owe $100 / 3 = $33.33.

This is the easiest method and probably the least likely to cause friction between you and your roommates. However, it may be the case that you or one of your roommates uses substantially less energy/water/etc., in which case, you may want to try a different method to divide more equitably.

Divide by Usage

This method is a bit more complex, but it can be fairer if roommates have different usage habits. Here's how to do it:

1. Track individual usage. This can be done through meters for electricity and gas usage, monitoring individual thermostats, or keeping track of shower lengths.
2. Calculate usage percentages. Divide each roommate's usage by the total usage for all roommates. This will give you a decimal value representing each roommate's portion of the total usage.
3. Multiply the bill amount by each roommate's usage percentage. This will give you the amount that each roommate owes.

For example, if roommate A uses 30% of the electricity, roommate B uses 40%, and roommate C uses 30%, then roommate A would owe 30% of the total electric bill, roommate B would owe 40%, and roommate C would owe 30%.

Divide by a Fixed Amount

Tracking usage can be a really complicated way of dividing utilities that may also lead to a greater risk of conflict. If you or your roommate is definitely going to use less utilities, you can estimate a fixed contribution. For example, let's say your roommate travels for work and plans to be gone half of each month. You may arrange to have them 25% of utilities instead of 50% since they only use them half the time. Similarly, if another roommate maintains a large fish tank, they could pay an additional fixed amount toward the water bill each month.

This kind of division usually requires a conversation up front that may be difficult, but ultimately it is often easier to maintain over time.

How to Set Up Bill Splitting

Now that you know your options for splitting bills, it's important to consider what you have to do to put an arrangement in place.

1. Have a Discussion

If you already have your rent split figured out amongst you and your roommates, this conversation shouldn’t be too difficult. It’s common for roommates to split the total cost of the utility bill evenly. Some households will use a different framework and split the bills based on the income of each individual. Those making more will chip in a bit more towards the bills. Other households may split utilities based on room size, where the person with the largest room pays the most.

2. Determine Who’s in Charge

Having different people in charge for different bills can get messy. We recommend having one person should be in charge of making payments on every utility bill. This will make organizing the payments every month a lot easier, especially if you have multiple roommates. The person in charge of the bills should also be responsible for reminding everyone how much they owe.

3. Put It in Writing

Once you have decided who will be paying what amount and how the utilities will be paid, make sure you put your agreement in writing. This can be as simple as an email, or as formal as a written and signed contract. Having an agreement in writing to reference in the future keeps everyone accountable and on the same page.

4. Make It Easier with Apps

Renters nowadays have it easy. Use cash-transferring apps to make payments between roommates quick and painless. Venmo and Cash App are the popular ones, and both allow instant deposits. When bills are coming up, whoever is in charge simply requests the agreed upon amount from each roommate within the app. Here's a few popular apps for bill splitting:

• Venmo
• Splittr
• Settle Up

Request the money a few days before you have to pay the bill to give yourself to give time for your bank transfer to go through. We also recommended a number of budgeting apps for renters before, so be sure to check that out.

When it comes to splitting the utility bill with roommates, the hardest part if having that discussion in the first place. Once you have your guidelines and processes for paying set up, it’s smooth sailing.

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