Splitting utility bills fairly with your housemates

Light bulb and post-it notes for utility billsIn an ideal world we wouldn't have to worry about bills or other unwanted outgoings, instead focussing our time and hard-earned cash on the things we want and love. Unfortunately, the reality is that we do have a responsibility to pay our bills - or at least our portion of the bills if we happen to be renting a property that splits utility bills among all housemates.

To do this fairly and squarely housemates have a number of options and tools at their disposal, as well as a few actions that can help make the entire process straight-forward and far easier to keep on top of.

Splitting the rent among other housemates

An initial step to help ensure all housemates are responsible for the rent is by firstly deciding between a joint tenancy or an individual tenancy when you initially move into the property. A joint tenancy will mean that all named tenants are responsible for the rent if it goes unpaid, whereas an individual tenancy will make each individual tenant responsible for just their share.

It's important to fully understand which type of tenancy agreement you're signing and what responsibilities you may have both individually and collectively as tenants.

Call a housemates meeting to get the bills in order

A good way to make sure the bills are organised correctly and fairly from the very beginning is by arranging for all tenants living in the property to get together to discuss the financial responsibilities. This will ensure you're all on the same page, aware of exactly which utility bills need to be set up and covered going forward (and by who), and fully understand what is expected of each other - as well as perhaps have a plan in place to resolve potential future issues, such as what could be done to help each other out if someone were to lose their job etc.

Responsibly covering the utility bills

There are a few different ways that utility bills can be shared responsibly among housemates:

Setting up a joint account

This is a common approach with couples and very close friends who share financial responsibilities when living together. In theory, it should work well with housemates, but you do have to be very wary when it comes to joint accounts - especially with housemates you barely even know upon moving in. Everyone who is named on the joint account will be affected by each other's credit rating, and seeing as there will be multiple people who have access to the funds there has to be a great deal of trust that the account won't be used for anything other than bills.

Designating specific bills to each other

If specific bills can be allocated to specific housemates this may be the easiest option, provided the totals are somewhat similar. It's unlikely you'll all be paying the exact same amount, so it could be a case of switching bills around with each other every few months to keep it all as fair as you can while monitoring any increases in specific bill payments. Communication is key, but if everyone is onboard it can work well.

Transferring funds to one bill payer

If one organised housemate is happy to take charge of the bills they could pay everything from one account. This could involve setting up a separate account in their name and then having everyone else transfer their portion of the bills into the account each month - it could be a lot easier than trying to manage it from a standard everyday use personal account.

Direct debits and standing orders

No matter how you share bills among each other, the setting up of direct debits or standing orders is likely to be involved to help ensure payments are accurate and on time - just make sure you all remember to keep enough funds in your own accounts to cover the amount!

It can also be beneficial to arrange for utility companies to take payments on certain dates so that you always know where you are and when the money is due to be paid. This will allow you to get your finances in order from the very beginning and always know what is expected and on what date, and the fact you have direct debits or standing orders set up will mean your only job will be to ensure the funds are available for the right date.

Phone apps to split bills

If you're all hot on the heels of current technology, apps are available to help you with splitting utility bills fairly and ensuring they are paid on time - sometimes these apps charge a fee to use their services, so do your research beforehand. As with any other method, it really only works well if all housemates are onboard with the idea, but if you are then it may eliminate some of the headaches.

If this is your first time taking on the responsibility of paying bills, perhaps as a student or as someone who has just flown the nest, then it may seem very daunting. However, it's a valuable life skill that will serve you extremely well if you invest time in getting to grips with it as soon as possible.

Looking for the perfect property to rent in Cardiff? If so, our expert team here at CPS Homes are waiting to help. With a huge range of properties in all corners of the city we're sure to have the ideal home for you. Call us now on 02920 668585, e-mail enquiries@cpshomes.co.uk or pop into one of our three Cardiff branches.

16 December 2020

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