Navigating money issues with lower income roommates

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money
By: giCC BY 2.0
I love my roomies, but while I have a sizable savings account and decent income, they are barely living paycheck to paycheck, even with help from family. Our rent is going up and though they've assured me they can afford it, I'm getting nervous. I don't want to loan them money, but I do want to stay current on our bills.

How can I impress upon them the need to budget more carefully while being sensitive to the fact they just plain don't benefit from the advantages I've had? -Mae

Oof, that can be a tricky one. I totally get you want to trust your roommates to hold up their part of the bargain, and yet you'll be totally on the hook to keep your life in order. That is straight-up stressful.

That being said, you (hopefully) chose your roommates for good reasons. They're (hopefully) full-grown adults. And you can (hopefully) trust them to do as they say. Because, the truth is, you can't instill your own values on anyone, and you certainly can't control your roommates spending habits. All you can do is be incredibly communicative.

With that in mind, I turn it over to the Homies who have roommates (or had roommates) that have been in this position before.

How have you discussed issues like bill paying and budgeting when you're in different economic situations?

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  1. I think "being incredibly communicative" is key here. I am a graduate student who has spent most of my 20s sharing apartments with other struggling graduate students (hello, NYC costs of living!) I have a bit of a savings cushion, thanks to frugality and steady employment, and when, last year, one of my roommates was between paychecks/loan checks, I just said "Look, I know X and Y are out of your control; I can pay thus-and-thus of rent/utilities for this month to avoid late fees; I can't afford to do that regularly." Admittedly, we're on a more similar footing than Mae and her roomies… I've also had friends offer to tide me over in times of need (I'm STILL bitter about that time my first teaching paycheck didn't come until I was administering midterms.)

    3 agree
    • I agree that communication is key, and the best way to be sensitive is to . . . well, be sensitive. Money issues are hard for people to talk about, and people who are struggling with money problems are constantly bombarded with financial advice, most of it unwarranted. Lucy's suggestion to make it a bit about you ("I'm not sure I can afford to shoulder the rent rise by myself") rather than just about them is a good approach.

      What's worked for me as well is to make money-saving a household effort. I used to live with four young twenty-something guys who were always in debt to each other because they liked to go out to eat. So we each learned how to cook one dish. One guy did tacos, another did red beans and rice, a third did pizza, the fourth did chili, and I made casseroles. Boring? Yes. Cost effective? Hellllllll yes. (Then again, that led to the great "[X] has never done the dishes" debacle of 2014, but that's another story for another day.)

      8 agree
  2. One option is to have a "Show Me the Money" jar. Have a jar (or envelope or box or piggy bank, etc) out in plain sight of all residents (though obviously you don't want to have guests aware of it) and have everyone put in money or checks for rent and utilities when they get paid. Money only comes out for those purposes. Twice a month (say middle and end of the month) have everyone get together and count it out so you know how far you have to go to make ends meet and who is behind.

    While you have a good point about being concerned about shared financial responsibilities, how they budget and what they spend their money on other than rent is honestly not your concern, nor should it be. Your goal should to be to help the "family" create a HOUSEHOLD budget. You've probably already determined what everyone's shares should be, so you just need to collect that money in a way that comforts you, doesn't leave you screwed at the end of the month, and doesn't piss them off.

    7 agree
  3. Having been on both sides of this situation at different points in my life, I'd like to reiterate and clarify: this is something you NEED to talk about. As much as you can't control your roomies' spending habits, you also can't control your feelings, so if you're truly concerned about the situation, you have the right – or more precisely, an obligation – to discuss this with them BEFORE it becomes a problem.

    Instead of trying to convince your roomies that their budgeting system needs improvement, discuss what your plan is going to be if something happens. Make it clear what your boundaries are (e.g. I'm not willing to loan you money). Additionally, you may want to write your plan up and have everyone sign/date it – it doesn't have to be a legal document, just an agreement that "these are our expectations should the need arise." You'd be surprised how much better everyone feels when you know exactly what the plan is and that everyone is on board.

    14 agree
  4. I read this, see the comments, and think ARE their spending habits actually an issue? Have they ever actually not paid their bills? Just because they don't have savings doesn't mean they aren't budgeting. I can't afford to save right now, but I meet all my financial obligations BECAUSE of budgeting. That's just where my income is right now. I'm really am uncomfortable with the idea that because their financial situation from her perspective (how much does she really know about their spending, and how much does she THINK she knows, how are their priorities different) looks different from hers, that they can't keep their word, that she knows best, or that she knows all of the details of their financial lives.
    If they've been meeting their obligations as roommates, which it sounds like they have, and they (who know their money situation best) say they'll be able to afford to rent increase, then she has no reason to believe otherwise. Until an actual problem arises there is nothing to be done. It appears that communication about the issue has been had, which is the right thing, and any further meddling is just patronizing and sort of rude.
    If I imagine someone to whom I already explained I can afford to pay my rent to (and HAVE been paying my rent to), started coming at me about budgeting and fussing about if I REALLY will be able to afford it, or tried to institute some system of tracking MY money, I'd be very offended. What had I don't make them not trust me?
    Also, people generally aren't poor (broke, maybe, but not poor) because they don't know how to budget, please, everyone banish that idea from your heads.

    57 agree
    • I agree. My hubby and I have switch positions in which he can pay for more stuff than me due to the fact that he has a higher paying job and I took a pay decrease to be at home with our child who has special needs and health reasons. His mom stated some concerns like you and he put it politely to her that we got it covered and she knows her budget…..I walked in on the conversation and he explain that if he he has gripes about anything I spent or say we will sit down, talk about it and make a new plan if the old one does not work out….but I digress. Sounds like your roommate may have a budget she sticks too and knows her boundaries. Again from what I read there are three sides of the story( yours, theirs and the whole picture) and we just heard from your side. A few questions did come to mind when I was reread the comments and your post:

      1.) Have they asked for money as a loan in the past from you and had a hard time paying it back?
      2.) Do you know what is their budget and what changes it goes?

      3.) Are you uncomfortable with the fact that they have a limited income and know their limits and try not to spent past it?

      4.) Have they not met their obligations in the past and jeopardizes their agreement when it comes to the bills and rent?

      5.) Have you had an honest conversation with them about the household budget and what needs to split up equally and how much of the burden you are taken up?

      Also don't give advice on budgeting or anything else if they did not asked. That is one time I have learn from others who did it to me without knowing all of the details and lead to me being pissed off and resentful. You will want to avoid that strain in the relationship and if they ask for the advice, give it from also a non-resentful POV and trying to be helpful…not hateful.

  5. How responsible are they? Not in terms of budgeting, apparently, but in terms of keeping their word and following through on stuff. If they've always managed to make it work in the past, you probably don't have to worry so much. They're going to try to keep making it work. This is particularly true if the raise in rent seems like a large chunk, but is actually a pretty small burden divided up amongst you. If they've always managed to scrape together the money for bills, they obviously understand how important it is and have good intentions to not screw you over. Stand firm on refusing to loan them money or cover extras.
    At the same time, do take a quick look at the household distribution of bills. Is everything split equally? Is there anything you can all agree to cut down on to save everyone some money?

    11 agree
  6. How close are you to your roommates? Is it a friendly business arrangement of convenience, or are they your lifelong friends? How much is your rent going up? If they are lifelong friends, could you absorb a greater percentage of the increase? If they are not lifelong friends, I agree with what other people on here said: make your boundaries clear, but if they haven't had any trouble making rent in the past, don't worry too much. Give them budgeting advice only if they ask for it. If they have had trouble making rent in the past, maybe it's time to start making an escape plan. You can't control their finances. You can only control your own.

    5 agree
    • I completely agree about the escape plan, whether you were friends before living together or not. Friendship can't always survive roommateship and you DEFINITELY DO NOT want to get into a sticky financial situation yourself for people who you're merely sharing a space with (rather than friend space, if that makes sense).

      3 agree
    • Yes to emergency escape plan! It's always important to know where the exits are located, even if you're in a comfortable and safe environment.

      2 agree
  7. My money lending rule is: I don't lend money. Period. The End. No Matter What.

    Two things:
    1.) If I can afford it, I GIVE money, but I never expect to see a penny back. That way I'm delighted if they pay me back, and I'm not bothered if they don't.

    2.) If I can't afford to give the money, then (in my mind) I shouldn't loan it out. And if I don't WANT to give that person money (again in my mind) I shouldn't loan that person money.

    I've done this a few times. Sometimes I get paid back, sometimes I don't. But in my mind, just thinking of it as a gift makes a missed deadline, a forgotten debt, or the possibility of a lost friendship non-issues. It's better for me…drama free.

    25 agree
  8. It really bothers me that the assumption here is one of impending irresponsibility: "budget more carefully," "instill your values," etc.

    I mean, it's been acknowledged that the room-mates are living paycheck to paycheck and yet still able to handle their commitments up to now, yes? Living paycheck to paycheck does not mean they will suddenly become irresponsible or require budgeting lessons. The rent went up, which means they will be struggling, but that is THEIR business. [Case in point: I make less now than I did four years ago. no raise + rent going up = less to live on But I worked it out. I didn't suddenly think, "F it. I'm going to Bermuda."] The room-mates have paid their bills as agreed upon since moving in, right? Who says they won't continue to do so? Geez.

    To be blunt, Mae's lifestyle and bank account balance do not mean she's more responsible. It means she makes more money, so perhaps she can find a place of her own. That way she won't have to fret about other people letting her down. Oops, was that insensitive to the advantages?

    19 agree
    • I don't know, I think the "even with help from family" part makes her concerns pretty reasonable and your criticism unfair. If they're already relying on help to cover their bills she has no reason to think they can/will make adjustments in other areas to cover the difference and no guarantee that whomever is currently helping them financially is willing/able to help them more.

      3 agree
      • I just don't agree. It's flat out none of her business. Being all judgey about her room-mates' finances says more about her than them.

        8 agree
      • "…she has no reason to think they can/will make adjustments…"
        Uh, you mean aside from the fact that they assured her they can afford the increase?

        Seriously, that should be the end of the discussion. Either she trusts them to come through, based on past rent payment history, or she doesn't. And if she doesn't, she should find another place to live.

        6 agree
        • A lot depends on how that conversation went down, I think. I can understand anxiety when financial things change. I had a bad experience with a housemate after rent went up significantly – she earned significantly less than everyone else in the house and we knew that it would be a bigger challenge for her to absorb that rise (which was a challenge for us, too). We tried to discuss it in a spirit of 'can you afford this or do we need to reassess whether this flat is still affordable' and she just brushed it off and insisted it would be fine. Right until we woke up one morning to find that housemate and all her stuff gone. She skipped out owing her share of the rent plus massive phone bills she had racked up on international calls. We never saw or heard from her again (we heard through the grapevine she was living with relatives). Covering her debts made life really hard for us for the next few months.

          Based on that experience, I'd definitely want to have a conversation with a housemate about changes in financial circumstances. Looking back, her totally blase attitude was the warning sign, because it signalled that she was just not engaging with the issue. If she'd said 'Well, this raise sucks, but I've looked at my budget and I think I can realistically stretch to it' it would have been a good sign that she had actually truly thought about it and her confidence was not misplaced. So, while it's right to take people at their word rather than scrutinising their budgeting, there is sometimes reason to be wary of assurances that everything will be fine. However, probably all you can do if you do feel that those assurances are flimsy is to put an alternative plan in place (finding a new place to live yourself, building up an emergency fund to ensure you can meet debts in the short term or move if need be). You can't really interfere in how other people budget.

          2 agree
    • I felt the exact same way. I totally understand the concern, but unless they have not paid their bills in the past it isn't your business. I assume you know they live paycheck to paycheck and their family helps them out because you have open communication, because otherwise it is NONE of your business.
      Living paycheck to paycheck, as a very large portion of the population does, is not the same as not taking care of your responsibilities.

      16 agree
    • I also feel like… if she's so much more stable… why can't she arrange to cover a little bit more of the bills. Being fair doesn't always mean being split evenly. I've done this for roommates before (who didn't return the favor when needed, but that's another story). Why can't they just make an agreement to split things 40/60 or whatever they need to do for everyone to feel stable and no one to have to worry about all the bills not getting paid. It just seems unfair to ask other people to be put in a bad place for the sake of "not getting ripped off." I mean it's one thing if they're spending all they're money on bullshit and whatnot, but If they're really just scraping, that's just rude, but what do I know? I'm just a poor hippy living the soccer mom life.

      5 agree
  9. In my experience the best way to protect the friendship in these situations is to protect yourself and specifically to protect your peace of mind. The problem is more than "will they ask me for a loan this month?" The problem is you are expecting yourself to live with the same financial uncertainty they face. No amount of communication is going to prevent resentment from accruing if you can't reconcile yourself to the fact that you, too, are effectively living "paycheck-to-paycheck" right alongside them.

    So what can you do to protect your peace of mind? Some suggestions:

    1) Find a cheaper place to live. This is great idea because if you're reluctant to do this, you should explore why you're reluctant. If you can't sacrifice convenience or nice amenities or extra space up front, I promise you sacrificing other things later won't go down any easier. I'm not suggesting you should sacrifice those things — only you can answer that. But going through the exercise of contemplating sacrifice is a great way to clarify your thoughts.

    2) Decide upfront how much you're willing to extend in case of an emergency. When you're deciding this I want you to picture that this money is a gift and not a loan. I never loan money to a friend without being comfortable with the fact I might not get paid back. Of course I want them to pay me back but if I don't give out more than I would as a gift, then I'm not going to be resentful when they are late paying me back or don't pay me back at all.

    3) Find your own place. A graceful exit is better than an impromptu break-up. Does the thought of moving out give you the hives? Well go back to #1 and #2 and adjust your responses. Repeat until you converge upon a decision.

    The bottom line is you're not going to have any control over how they manage their money so you need to get tight with that fact or move on.

    6 agree
  10. All I can say is, if you make a commitment to split the rent and utilities (and anything else, like communal food) be sure to write the terms down and get everyone to sign to it. I hate to be the voice of bitter experience, but in the past 8 years I've almost always been the more financially responsible roommate (that's not to say I was the wealthiest one, though) and I even had to take an ex to court, after he refused to pay for things that were in both our names (forcing me to cover his half, until I could get out of them, or risk my credit going downhill). The best defense against a roommate taking advantage is to have proof of an agreement, for their reference or legal reference. It also might be a good start for budgeting, for them. Good luck!

    4 agree
  11. I'm not saying this is right, but having a room mate who was always ALMOST late on the rent made me hypervigilant about her spending habits. Every month she would have to wait for a check from her grandmother to clear to help pay her portion of the rent, so we would often have to literally run the rent over to the office on the last day of the "grace period" before the office closed to avoid any late fees. Normally she only got $200 or so from her grandmother, so it was very easy to see that she spent that much on restaurants, nights out at bars, and frivolous purchases over the course of a month. Part of this was coming from a place of bitterness since I had to budget carefully to cover my rent and other bills, and she didn't.

    I was never worried that she wouldn't be able to cover her portion thanks to her generous family, but it was stressful and annoying to have to be 20 minutes away from a late fee every month. I would have rather not known that she was getting money from her family because then I wouldn't be adding up her purchases in my head. If we weren't almost late every month, I wouldn't have cared at all because it truly wasn't my business! But at some point when it affects you, it becomes your business.

    6 agree
  12. I have dealt with this my entire life. I come from a wealthy family. Both my parents and grandparents came from humble means and worked their way to mega success. Because of this, people (everyone from friends, to colleagues, former roommates, even my husband and his family) assume that my family supports me and that I can just run to Daddy for money. While it is true I have enjoyed some perks of my family's economic status, such as vacations, a free ride through my undergrad, and nice gifts, I have also struggled; When I was 17 and on my own for the first time, I found myself at the food bank. When I realized an undergrad wouldn't cut it in my chosen profession, I got a student loan for my masters ($25k I am still paying back). When my husband wasn't working as much as he could I managed to buy all of our food for the week on $40. My family doesn't shell out money. If I was desperate, my dad would pay my hydro bill, but never a cable bill or cell phone bill because those are luxuries. To say that my wealthy family carried me is BS although many think it is my reality. To put it in perspective, I can barely afford my little house that is the size of my Dads bedroom…no I am not kidding.
    All this is to say that we should never judge people by their fiduciary status nor think it is acceptable to rely on them to carry us. In a roommate situation it should be even-steven. I was flabbergasted when a roommate once said to me that I should ask my dad for money to pay the entire shared cable and internet bill because he is well off…not cool.

    4 agree
  13. This is a complex issue – just one thing I wanted to add – sometimes it is possible to pay your half of a bill, leaving the rest of the account to be settled by your housemate. I had a troublesome housemate and I called our utilities provider and made a payment for my half of the bills, leaving the other half to my housemate, and they were happy to take the payment in two halves (the problem was mostly that the housemate couldn't be trusted to split costs evenly). When that lease ended I also explained the situation to the landlord and they (very kindly) agreed to return my half of the deposit to me direct, instead of returning the whole amount to the dodgy housemate and trusting them to forward me my half. Essentially, if you do get in to difficulty, don't be afraid to act independently and deal with your finances separately from your housemate. And like with most things, communication is key.

    3 agree

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