Communication is key
It’s easy to misunderstand messages and texts, and Snapchat probably isn’t the best place to arrange your broadband contract. Before you start contributing to the costs of running a house, it’s best to have a face to face meeting with all your housemates. That way, you can work out who is paying for what, so you don’t end up with bailiffs knocking on the door because your mate forgot about the electric bill.
There’s often one person in a student house who organises all the bills. That might be easier for the rest of you, but it’s important for everyone to be on the same page with payments. Save the Student recommends that contracts are shared out between every housemate, so that one person’s bank balance isn’t jumping up and down like a yoyo each month, as the money goes in and out. However, sharing can make it difficult to keep track of who’s paid for what, but help is at hand. Free budget calculator apps like Splitwise and Kittysplit allow you to easily keep track of bills in a shared house. They’re also much cheaper than paying for bill-splitting services. It’s possible to set up a joint bank account together, but this means your credit score will be impacted if one of your housemates messes up their own finances.
Identify what needs budgeting for
So you’re ready to sit down and talk over the finances with your new housemates, but what should be on the agenda?
Electricity - this will be more expensive if you have electric heating. If you have storage heaters, learn how to use them properly and get an economy tariff to make them cheaper.
Gas - you will often use the same supplier for gas and electricity, but it may be cheaper to get these separately.
Water/Sewerage - these costs are usually incorporated into just one bill, but in some areas, different companies will deal with the two services. Unlike with other bills, you can’t choose your water supplier.
Internet/Phone - it’s 2017 and you’re in a houseshare, so you’ll probably just want fibre - remember that some internet service providers add on line rental at £17/month. With router, installation and contract termination fees, it can all get confusing and expensive, so it’s best to use a price comparison site to compare all the options available in your area.
Broadcast TV - do you watch live TV or iPlayer? You’ll usually need a TV license per tenant (£147/year). If you don’t watch live TV or iPlayer, you don’t need a license, but you should contact TV Licensing to opt out. Your house could be randomly checked and license dodgers face a £1000 fine and prosecution.
Subscription TV - with the TV license working out at over £12/month, cheaper alternatives are Netflix (£9/month for 4 screens), Amazon Prime Student (£39/year for 2 screens + 6 months free) and NOW TV (£7.99/month for 2 screens).
White Goods - do you need a fridge, freezer or washing machine? You can rent these out on a monthly basis, which may be cheaper and easier than buying something new.
Deposit - what will happen if you lose your deposit due to accidental damage? Should the cost be shared by everyone? What if the damage was from a guest? Who will clean and tidy at the end of the tenancy? Get these answers in writing as soon as you can.
Groceries - you’ll be amazed by how many arguments start over sharing the milk. Agree from the start how you’ll be paying for milk, tea, coffee, bread and other communal groceries.
Some letting agents won’t let you change utility companies, and you should be careful about getting fibre or a satellite dish installed, as it could break your contract. But as students, you’re probably on a tight budget, so you’ll want to get your utilities on the cheap. Use price comparison websites for everything from groceries to broadband. Be aware that low cost companies sometimes have low quality services, though this isn’t always the case!
With electric and gas, you probably won’t lose out by finding a cheap supplier. However, choosing a bad internet service provider can mean delayed installation, terrible customer service, poor security, low signal strength and slow speed with frequent dropouts. A good price comparison website will allow you to see customer reviews of each product. Use these to decide which companies to trust, and be wary of sponsored listings, which appear at the top of the search results (you won’t see sponsored listings or adverts on Choose Wisely).
Draw up a budget
Once you’ve come to an agreement with your housemates about how to split the bills, you’ll soon realise that keeping on top of a budget can be tricky. Yes, you can use a student budget app, but it’s likely that you’ll need a budget planner. Many banking apps and the prepaid card from Monzo allow you to set a spending target, so you can stay on track. But one of the most popular articles on Choose Wisely is the guide to managing a student budget, which has a free spreadsheet template.
The Choose Wisely uni student budget spreadsheet lets you work out how much you could spend each month. Download and make a copy, then fill out the student household spreadsheet with your own budget and be sure to change the student finance payments to the right amount.
Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.