Saving Money With a Roommate

Life is unpredictable—and the cost of living seems to get higher every day. Put these two factors together, and you can easily find yourself struggling to get by financially.

One of the biggest expenses for today's consumer is housing. Whether you're renting your home or paying off a mortgage, housing expenses are likely the biggest-ticket item in your monthly budget. In fact, the average American household spends up to 30 percent of their monthly income on housing.

If you find yourself in a financial crunch, whether you've lost a job or you're drowning in bills, title loans and other quick-cash options are a viable short-term solution. Saving money with a roommate is a long-term option you may not have thought about—but one that can save you hundreds of dollars each month. If that sounds like music to your ears (and money in the bank), keep reading!

Rolling the Dice With a Roommate

It's true: You take certain risks when you decide to take in a roommate. But those risks can yield big rewards.

If you're paying $1,600 per month for your rent or mortgage payment, for instance, and a responsible person moves in to take over half of that obligation, you've just saved $800 per month, not to mention the added savings on utility bills if your new roommate is also sharing that expense. No matter who you are, holding onto an extra $800 or more per month out of your paycheck will make a significant difference in your finances.

If you're ready to take the plunge with a roommate, here are some tips to keep in mind:

  • Check Them Out – You wouldn't hire an employee without finding out about their background, so don't let someone move into your home without doing the same thing. Ask your would-be roommate for some personal references as well as references from previous landlords. You are also within your rights to ask for proof of income and contact information for their workplace. You can additionally run their name through the national sex offender registry and your local or state court systems to check for any shady legal problems in their past. Finally, take a gander at their social media profiles—you'd be amazed what you can find out about a person from their Facebook page alone.
  • Spell Things Out – When you've selected a promising candidate, get some things down on paper before you give your new roommate a key. Fill out a roommate agreement (free templates are plentiful online) and spell out things like how much rent the roommate is expected to pay, when it is due, and what kind of a deposit they are giving you, if any. It's also a good idea to get agreements about shared bills down on paper. If you're going to be splitting the electric bill, for instance, note that on your agreement and be clear with your roommate about how the bill will be divided and when they need to pay their share each month.
  • Be Flexible – There are always adjustments to be made when you share a home with somebody. Be flexible, and be upfront with your roommate, too. Talk openly and respectfully when a problem arises. It's wise to pick your battles, as well. If you work early and your roommate is a noisy night owl, talk calmly and find some solutions and compromises that will suit both of you. A late-night gamer can use headphones to solve a noise issue, for instance. Be thoughtful and aware in your own habits, too. Swiping your roommate's milk because you forgot to go to the store can quickly sour this new relationship. Be respectful and expect respect in return.
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