How Do Roommates Fit Into A Financial Plan
Do you need a roommate? Maybe you do and don’t know it. A roommate could pay half your living expenses.
Many people use roommates to lower their cost of living and to become debt free. But if you take having a roommate to the next level, they could pay into your retirement plan or other investments.
Roommates can be a significant part of your financial plan if you use the money they contribute positively. Suppose you treat the money you receive like a business and apply the funds to investments. Your roommate can be a very significant part of your financial plan.
How Do Roommates Fit Into Your Financial Plan
Roommates pay rent and half the utilities. If you take that money and apply it to the debt, you’ll be able to be debt free in no time. But, now what? Can they help you achieve any other financial goals?
Yes, they can. You need to decide where you’ll invest the money your tenants pay you.
Planning Is Everything
If you fail to plan, you plan to fail. Benjamin Franklin 1790
Planning is essential for success. If you don’t plan, it’s like taking a trip to somewhere you have never been. You don’t take extra money for food and gas. You don’t take additional clothing to protect you against the wheater. You don’t have a timeline, so you don’t know when you will be back. You don’t even know where you are going. You go.
Too many people run their finances the same way. They have no plan. They go.
You should always address dangers or potential dangers before you leave.
In finances, you need to plan with milestones along the way: education (maybe), buying large items, cars, houses, getting married, retirement, and many others.
A plan is more than saying I plan to go to college. A plan requires you to think about when you will go to college. How will you pay for it and so much more?
A plan requires you to analyze all aspects of what you want. How to avoid problems.
What will you do if you have a problem? Having a list of resources would be very helpful.
A good plan will give step-by-step instructions on what to do and how to do it. You have a plan of action.
Going back to school doesn’t need to be your only financial plan.
You decide you need to lower your cost of living so you will have money left over at the end of the month. You want to supercharge your savings.
You need to know how roommates can fit into a financial plan.
You Need A Roommate
You have decided your roommate will contribute to your financial plans by paying you part of the rent and utilities. Decreasing your cost of living gives you more money to save toward your financial goals.
You should take their share of rent and utilities and make up the difference leaving you more money than you had before you acquired a roommate.
You have also decided to go through a roommate finding service to screen potential roommates giving you a list of people that will meet your criteria for a good roommate.
Roommates don’t last forever. And you know you should expect their rent and utilities on time.
Don’t Be Dependent On Their Rent
Be cautious that you can afford the apartment/house you will be sharing without the added money of someone else. If you should have time that you don’t have a roommate, you don’t want a financial obligation you can’t afford.
How To Split Groceries With Roommates
You are doing this to have money to satisfy your financial plans. Buying someone else’s groceries should not be considered your job or responsibility. There are many ways to decide who should buy what.
Typically people buy their groceries, and an area is assigned to them to store their food. You can assign shelving in the refrigerator for perishable foods.
Work out a plan with your roomie, where they can store their food.
How To Deal With A Cheap Roommate
Cheap roommates can be a challenge. Living with other people means you need to accept them and their habits. You have to take the good with the bad.
Knowing where to draw the line is essential. You must set clear boundaries and rules to ensure everyone pays their fair share.
Splitting Bills In A Shared House
Splitting bills for a house of roommates isn’t rocket science. Divide the bill by the number of roommates, and that’s how much each should pay.
Note: a plan should be worked out ahead of time if one of the roommates moves. How will the bills be paid then?
The most logical answer would be to change the number you divide the bill by giving each person a more significant portion to pay.
Yes having a roommate is beneficial.
How To Charge A Roommate
The last thing anyone wants is to have someone walk up to them and say, “you owe this much.”
Keep it professional and give invoices on how much is owed and when it’s due. Itemize the invoice, so everyone knows how much they are paying and for what.
Conclusion
How do roommates fit into your financial plan? Roommates will pay you rent and utilities, decreasing your living cost and giving you more money for becoming debt-free and investing.