Managing money issues in a share house

Moving into a share house can be really exciting, but sometimes sorting out all the bills can be a bit overwhelming and stressful if you and your housemates haven’t established a few ground rules for splitting the expenses fairly.

This factsheet identifies some options to help you manage your finances as well as a few ways of minimising conflicts while living in a share house, which will hopefully lead to your share house experience being as stress-free as possible.

Establish a kitty

A kitty is where everybody contributes a set amount of money to cover costs like cleaning products and other essential items.  This might also include sharing cooking and groceries. The kitty can be kept by one person or kept somewhere in the house. It’s up to you and your housemates to work out what the money in the kitty is to be used for. 

Try to remember that kitty rules vary from house to house, so it’s important to make sure that you and your housemates have discussed this from the start. Whatever kitty rules your household settles on, it’s a good idea to ensure everyone is aware of the game plan and that the house reviews the rules from time to time to ensure everyone still considers the outcome to be fair. If you don’t feel comfortable with trusting just one person with the kitty, another option is to agree to alternate buying the essential items.

Work out utility bills

The easiest way of working out utility bills (i.e. water, gas electricity) might simply be to split them equally among all of the people in the house. However, there are a few precautions you can take to ensure that no one is left with big debts if someone decides to move out of the house without paying the bills.  

These precautions include:

Names on utility bills -  If your utility companies will let you put the bills in everyone’s name, this is can be good idea, so that each house member is authorised to discuss the account with the utility. However, just because the bill has more than one name on it, doesn’t mean that you will only be liable for your share if things go wrong.

Everyone whose name is on a joint account can be held fully responsible for the whole debt. No matter whose name is on the bills it is important for steps to be taken to prevent big debts, by establishing payment plans.

Utility payment plans -  The costs of utilities can be a big burden, especially with seasonal use of appliances such as heaters. Fortunately, many utility companies can provide you with payment plan options to meet the cost of utilities. There are usually two types of payment plans for you to choose from.

The first is a budget plan where you are sent a payment card to enable you to make payments as you choose in advance of the next bill. The second type of plan, is an installment plan where you make an agreement with the utility company to pay set amounts at set intervals, again using a payment card (but direct debit of your account is possible).

The installment amount is calculated on an estimate of your household’s average usage over the year, which softens the impact of any variations between winter and summer bills. If you stick to the installment plan, the utility company will not expect you to pay bills as they arrive, but it will send you the bills so you can check all your payments went through. It is important for you to monitor the installments to ensure that the amount you are paying will be enough to cover a full year of bills. Installment plans can be started even when there is an outstanding bill.

Sharing the installments around installments payment plans can be an easy way to share the bills, as everyone can take turns at paying the installments as they become due. For instance, If there are 3 of you and 3 utilities to pay, then you could rotate the fortnightly installment payments, so that you each end up making one payment to each utility every six weeks. The beauty of the payment plan card system is that you get a receipt for each payment, which can be stuck on the fridge so the whole household can see that the installments are under control.

Utility bill blowouts - If a crisis hits with a utility bill and it can’t be resolved with a payment plan all utility companies can tell you about the special government run, one-off Grant Scheme that may be able to help you if, due to some unexpected financial hardship, your household can’t meet a bill. Contact your utility company for more information.

Work out telephone bills

Phone bills can often cause tension in a share house, particularly if people forget that they made an overseas phone call or rang the cricket competition hotline 10 times. To avoid these conflicts, there are a number of options your shared household can pursue.

Most houseshares split costs such as rental, fees and local calls equally, while paying for any mobile, std or international calls which are itemized on the bill. It can sometimes be helpful to keep a notebook next to the phone to write down numbers each person has made. This can make it easier to work out who the bill when it comes.

If you don’t want to share your phone bills, perhaps because everyone has their own mobile, consider getting a phone service that provides the household with incoming calls only. This is provided for free in some instances by phone companies, subject to you meeting certain conditions, such as your having a non-rental plug-in phone. This system means no landline bills for the house to argue over but does not resolve the all too-familiar complaint of house members failing to pass on phone messages.

Some phone companies have recognised the needs of shared households and provide a phone service where each member of the house gets their own phone account. The account gives you your own personal phone number with a PIN to access outgoing calls and messages. Some of the services are limited to two accounts per phone line but you could consider installing extra lines. This type of service costs extra but it may be worth it to prevent conflicts from occurring.

More information

If money issues are getting you down you might want to talk to somebody about managing your finances. 

Nationally

For assistance with complaints about treatment by a utility or phone company:

Telecommunications Industry Ombudsman (Nationally) 1800 062 058 or 03 8600 8700 or (TTY) 1800 675 692

Victoria

Energy and Water Ombudsman - 1800 500 509 or 131 450 (Translating and Interpretation Service) or 133 677 (NRS) or 9649 7599 and quote the number 12550 for a reverse charges call

Financial & Consumer Rights Council – (03) 9663 2000 or 1800 134 139

For assistance to mediate a dispute in your household:
Dispute Settlement Centre - (03) 9603 8370 or 1800 658 528

Tenants Union Victoria - (03) 9416 2577
Web: www.tuv.org.au

New South Wales

Energy and Water NSW - 1800 246 545 or 133 677 (NRS) or 131 450 (Translating and Interpretation Services)

Consumer Credit Legal Centre - 1800 808 488

Financial Counsellors Association of New South Wales  -  02 9551 5559

Tenants Hotline New South Wales - (02) 9251 6590
Web: www.tenants.org.au

Queensland

Energy Ombudsman QLD - 1800 662 837

Tenants Union Queensland - (07) 3257 1108 or 1800 177761
Web: www.tuq.org.au

South Australia

Energy Industry Ombudsman SA - 1800 665 545 or 08 8216 1888

Office of Consumer & Business Affairs Tenancies - Tel: (08) 8204 9544

Adelaide Central Mission - (08) 8202 5180

Para Districts Community Legal Service (08) 8281 6911

Northern Territory

Territory Ombudsman - 08 8999 1818

Darwin Community Legal Service - (08) 8941 3394
Web: www.dcls.org.au

Darwin Legal Aid Commission - (Darwin) 08 8999 3000 (Katherine) 085 8973 8704 (Alice Springs) 08 8951 5377

Resolve (Anglicare Northern Territory)
(08) 8985 0000 or 1800 898 500

Australian Capital Territory

Essential Services Consumer Council of the ACT - 02 620 7740

Tenants Union ACT - (02) 6247 2011

Care Financial Counselling Service - (02) 6257 1788

Tasmania

Energy Ombudsman TAS -  1300 766 725

Tenants Union Tasmania - (03) 6223 2641 or 1300 652 641

Anglicare Financial Counselling Service - 1800 243 232 or 03 6234 3510

Consumer Credit Helpline Hobart Community Legal Service - 1800 232 500

Western Australia

Energy Ombudsman WA - 1800 754 004 (within WA) 08 9220 7588 or 1800 555 727 (NRS) 131 450 (Translating and Interpretation Service)

Tenants Advice Service - (08) 9221 0088 or 1800 621 888

Financial Counsellors Resource Project - (08) 9221 9411

Consumer Credit Legal Service - (08) 9221 9411

Financial Counsellors Association of Western Australia - (08) 9325 1617

This fact sheet is based on the Debt Suxs Info sheets written by Financial Counsellor Jenny Lawton and published by the Youth Affairs Council of Victoria.  For more information see www.yacvic.org.au