We all know that person…the one who just seems to be a terrible money manager! From over-spending to under-saving, this friend is the one always scrambling to make ends meet because they simply spend money they don’t have. The situation is much worse when this friend is also your roommate! What to do when your roommate is a bad money manager?!
Is it your problem?
First, ask yourself: Is your roommate’s money problem your problem? While it may be frustrating that your roommate splurges on nights out but then can’t chip in for a mutual friend’s birthday gift, the only time their money management is really your problem is if it starts to impact your rent and bill payments.
The best way to get around that potential pitfall is signing a mutual rental agreement that outlines which roommate pays for what and when. That way, whether your roommate is financially responsible or not, they are legally on the hook for certain payments each month. This protection can help to save you from getting into trouble with your landlord, as well as save you from headaches and roommate drama.
In most cases, roommates’ poor money management isn’t really your problem. Instead of being irritated by their behavior, talk to them about it or ignore it and move on!
If they do begin to miss bills or payments, you can have a conversation with them to try to right the situation or, as a last resort, begin to take legal action. If you pay any extra bills to fill the gaps, make sure to document it closely (while recognizing that you may never get that money back from your roommate).
Can you help?
When your roommate is your friend, you may be interested in trying to help them achieve financial stability. Living between paychecks and constantly worrying about funds can lead to chronic stress which is unhealthy mentally and physically. First, be sure to test the waters to determine if your roommate is interested in any advice from you about budgeting. Money can be a sensitive topic, but if you offer concrete ideas instead of criticisms, the conversation can be very productive. Consider a few options to help your roommate manage their money:
- Download a budget spreadsheet, or share the spreadsheet you use with your roommate
- Offer to take a financial planning class together
- Recommend spending nights “in” instead of spending money out together
- Start saying “no” to activities that you know they can’t afford (i.e. roommate asks you to a fancy dinner when you know they have to pay rent next week)
- Talk openly about your money-saving strategies (not how much you save, but how you save it!)
How to deal?
In general, be calm, cool and collected when it comes to money management. Everyone makes a different amount of money and has different spending habits. If it doesn’t impact you, leave it be! However, when a roommate’s poor money management starts to affect you, don’t be afraid to take action by opening the lines of communication to ensure each roommate understands the bills they are responsible for paying each month! Being proactive means that having a roommate who doesn’t manage money well will not become an ongoing source of conflict!
hi , i have question and it’s pretty short. As of right now im making 9.05 an hour and trying to save up to move out before im 30.
With the money im making now and me saving my money, will i be able to make that goal ?
How many years do you have to save? The most important number you have to focus on is your ongoing income at the time you start renting. You should take home each month after taxes and deduction at least 3 times as much your rent. If you plan to get a rental that you have to subsidize from your savings each month, at some point the savings run out and you have to start living within your means. Check out this post https://www.myfirstapartment.com/2016/07/how-much-rent-can-i-afford-on-my-hourly-pay/ to see what your max. rent is and save at least 3 times that amount before your move. Good luck!