As you’re set to embark on your next year of Uni study, chances are you’re likely going to be heading into a student house for the first time, under a private tenancy.
It can be really exciting to escape the uniformity of your student halls and get into a proper house; you also get to escape those nightmare housemates you were shoved in there with, and move in with your proper mates.
Unfortunately, one of the biggest things that can lead to fractured friendships at University is the money problems that can arise from dealing with rent and bill payments in your new house.
While you might think that you’re sensible and responsibly with your money, not all of your house mates may be. And as your rent for student halls – including bills – was likely taken at the start of each term from your loan allowance before you even saw it, it’s not something you even had to think about.
Back when I was at Birmingham City University, I ended up moving in with 5 friends for the following 2 years. Luckily, we never had any problems with the bills. I’m going to share some of the tips that I learned, as well as outline some financial advice that should help you.
Don’t be the one person who ends up having to be chased for payments; you’ll ultimately become the one your housemates come to resent down the line.
You are all responsible for rent, you are all responsible for bills. It isn’t worth getting into silly arguments about how much more one person showers than the other, or that another person goes home every weekend so shouldn’t be responsible for X number of days’ gas and electric per term.
Delegate a ‘Lead Tenant’
Now, this ‘lead tenant’ doesn’t have to be anything to do with your tenancy agreement. Basically, we had one tenant who has able to take all the cash and pay all the bills.
Because we all had separate tenancy agreements with the letting agent, we paid our rent separately and this was the biggest expense so didn’t impact anybody else.
With bills, our ‘lead tenant’ set everything up to come out of his bank account (luckily he had a second account, which is something to consider) and collected all of the money.
Luckily there are services now where you don’t have to do this: a service such as KiTTi allows a group to all pay in a money as a cash-pool for spending – perfect for paying bills!
Pay in advance…
One of the best things we could do was to pay for all our bills up-front. Your maintenance grant comes in at the start of each term, meaning 3 payments every year. By taking this out of the equation of your budget straight away, there’s no chance of overspending.
We obviously knew how much TV and internet was going to cost, but electric, gas and water will fluctuate every quarter, so we essentially had to guess a maximum amount for these. If I recall, we worked it out at around £10 a week each (for 6 people). So at the start of the term, we worked out how many weeks there were until the next loan payment, and put it aside.
At the end of each year, we had a little left over. After the first year in the house we paid for a new TV with the over-spill, and in the second year (the end of Uni!) we spent the remainder on a night out.
A note about joint accounts
While it can be tempting to get a joint account between you and your housemates to collect your bills money, I would advise against it. By signing up for a joint account, you are financially aligning yourself with your housemates – and not just on this one account.
Should one of them get into debt, fail to pay credit due or get a CCJ on a defaulted payment, the impact could be seen on your own credit report.
While you may trust these people, you don’t truly know everybody’s personal circumstances and attitudes towards money, and it’s not worth ruining your own chances of a getting credit such as for a credit card, loan or even a mortgage later in life due to somebody else’s mistake.