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Sharing Bills: A Guide for Those Renting with Friends

Living with flatmates, whether they’re friends or strangers, can be a gratifying experience. It’s often characterised by shared meals, shared laughs, and sometimes, shared frustrations. Among these frustrations, one stands out: managing shared bills and rent. This essential aspect of shared accommodation can turn into a battlefield if not dealt with correctly. That’s why it’s vital to establish clear guidelines on how to navigate the potentially contentious process of splitting bills fairly when sharing a home.

Table of Contents

  • Why Financial Transparency Matters
  • Rent and Utilities: Distinguishing the Two
  • Three Equitable Methods to Divide Your Rent
  • Splitting Utility Bills in Shared Accommodations
  • Dealing with Financial Hiccups
  • Using Financial Apps for Shared Expenses
  • Conclusion

Why Financial Transparency Matters

If you’ve never lived in a shared space before, you might be wondering, “Why all the fuss about discussing money?” Unfortunately, when it comes to shared living spaces, it’s never just about paying the bills. Disputes about money can quickly spiral out of control, creating rifts in relationships or leading to dire consequences such as legal trouble or a negative impact on your credit score.

Consider this scenario: one of your flatmates suddenly defaults on their share of the rent without any prior notice. As a named tenant, you’re now suddenly burdened with their unpaid dues. This situation becomes even worse when you discover that this unpaid bill has resulted in a default notice on your credit rating. This negative mark can stay on your record for up to six years, making it more challenging to rent or borrow in the future.

To avoid such financially distressing scenarios, it’s crucial to have a frank discussion about shared expenses right at the beginning. Transparency around finances can help maintain harmony in the household and keep everyone’s financial health intact.

Renting with Friends

Rent and Utilities: Distinguishing the Two

Understanding the difference between rent and utilities is an essential part of sharing a home. As tempting as it might be to lump everything into one big payment, this method can create complications.

Joint tenancy agreements, for instance, mean that each tenant is equally liable for the rent owed to the landlord. This arrangement can create an imbalance and lead to disagreements, especially if the living situation changes midway through the tenancy, such as a new flatmate moving in. Therefore, it’s wise to treat rent and utilities as separate expenses.

Three Equitable Methods to Divide Your Rent

Dividing rent among flatmates can be a challenging task. There are several methods to go about this, each with its own advantages and potential pitfalls:

Divide and Conquer

The most straightforward approach is to divide the total rent by the number of tenants. However, this method might lead to disagreements if the rooms are not identical in size, or if there’s a couple sharing one room. While its simplicity is attractive, this method may not always be the fairest one.

The Income-based Approach

Tying rent payments to each tenant’s income is a more modern approach to splitting rent, but it comes with its own challenges. It requires tenants to disclose their personal income, which might not be comfortable for everyone, especially if the flatmates are strangers. This approach might work well for partners or close friends, but only if there’s a significant income disparity. Otherwise, it could lead to unnecessary conflict and feelings of resentment.

Pay by the Room

A highly recommended method for sharing rent among flatmates is the ‘pay by the room‘ approach. This method works best in larger houses with varied room sizes and different perks. For example, a room with an en-suite bathroom, better views, or extra storage space might warrant a higher rent. However, determining a fair price for each room can be challenging. Tools like the SplitWise online calculator can be of great assistance, but remember to adjust for the appropriate currency if you’re outside the US.

Splitting Utility Bills in Shared Accommodations

Compared to rent, utility bills are typically easier to divide. However, to ensure fairness and prevent any future conflicts, here are some tips:

Discuss in Advance

Before moving in, have an open discussion about how utility bills will be split. Make sure everyone understands their responsibilities, due dates, and the chosen payment method.

Get an Estimate

If you’re new to renting or moving into a different type of property, estimating utility bills can be difficult. You can look at national averages to get an approximate idea. For instance, the Money Advice Service and the Department for Business, Energy & Industrial Strategy websites offer such information for the UK.

Assign Responsibility

Choose a responsible person to manage the bills, or alternatively, rotate this task. A shared spreadsheet can help keep track of actual costs, and standing orders can be adjusted as necessary. Some people might suggest opening a joint account for bills, but financial experts typically advise against this as it ties tenants to each other’s credit histories and could potentially allow one party to drain the account.

Regular Reviews

Conduct regular reviews of the financial arrangements. These don’t need to be frequent, but having a quarterly check-in can help bring any issues to light and prevent resentment from building up.

Dealing with Financial Hiccups

So, what happens if a housemate can’t pay their share, or worse, refuses to do so? Company policies and legal regulations vary, so this situation can be difficult to navigate. While this article can’t offer legal advice, the Citizens Advice Bureau’s document on ‘Problems in Shared Accommodation’ could be a useful starting point. In extreme cases, you might have to resort to Small Claims Courts to reclaim the money, but this is a lengthy and often stressful process. The key is to try to prevent such situations from arising in the first place.

Using Financial Apps for Shared Expenses

In today’s digital age, there are numerous apps that can help manage shared expenses. These apps allow you to keep track of who owes what, send reminders for due dates, and even facilitate payments directly through the app. Some popular options include Splitwise, Venmo, and Zelle. These apps can help streamline the process of splitting bills, making it easier and less stressful for everyone involved.


Sharing a living space can be a rewarding and enriching experience, but it comes with its fair share of challenges, especially when it comes to managing shared expenses. The key to successfully navigating this issue lies in open communication, clear agreements, regular reviews, and the smart use of technology. With the right strategies and tools, you can ensure a fair and hassle-free financial arrangement, allowing you to enjoy the best aspects of your shared living experience.


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