MU Extension MU Extension       University of Missouri    ●    Columbia    ●    Kansas City       Missouri S&T     ●    St. Louis - Money Matters - Consumer Action


Feature article: Housing


Real friends loan money (and other myths)

Cynthia E. Crawford, Ph.D., Family Financial Education Specialist, and Rob Weagley, Ph.D., Department Chair, Personal Financial Planning, University of Missouri Extension


You may have heard some horror stories about college roommates. Most of them are true. One way to reduce the trauma from this stage in your life is to have some agreements with your roommates, from the beginning.


One of the first topics to agree on is how you’ll share costs of things you might need for your room (for example the cost of a dorm refrigerator and stocking it with snacks) and whether you will lend money to each other. The National Endowment for Financial Education (NEFE) recommends that you have a policy of not lending money to your roommate or anyone else who goes to school with you. This is the only way you will avoid hard feelings when you do not get repaid. A big caution is to never leave your debit card or credit card laying around the dorm room or apartment. No matter who uses it, you’ll be the one receiving the bill. It is a great idea to read your statements, either online or in hard copy, to make sure you are paying for only those items that you purchased. If there is a charge you are not certain of having made, contact the debit/credit card company immediately.


These ideas go double when you are sharing an apartment with friends, in order to prevent them from becoming ex-friends. Negotiate how or if you will share the costs of utilities, internet and cable services, and basics like food. Will you shop together and split the food bill or will each of you buy your own food? What if one person likes a toasty warm apartment in the winter and the other would rather dial the thermostat down and save money? What if one person damages the apartment and jeopardizes the security deposit for all? Talk about this at the beginning before there is a problem. Once the problem exists, it will be difficult to have the conversation and the conversation could turn ugly.


One thing that works for many students is to make a list of all agreed-upon common expenses. Each month have roommates keep the receipt for every common bill that they pay, sign it, and put it in a jar or other safe place. Then, when the monthly rent is due, calculate all that has been paid by each person and make adjustments to each person’s rent check to assure that each is paying their own way.


What happens if a roommate moves out early? If a roommate moves out before the lease expires, the landlord likely can hold the remaining tenants on the lease responsible for the full amount of the rent. When tenants sign a lease, generally each tenant agrees to be fully responsible for the rent. However, if a tenant moves out, the landlord often looks to the remaining tenant(s) for the rent because they are close at hand. One option is to see if the landlord will allow individual leases for each resident. The downside, of course, is that the landlord can replace the tenant without your agreement – unless it is written otherwise into the rental contract.


Having a written roommate agreement, signed by all, is a great way to address all of these issues. In the agreement write out your agreed upon expectations for payments, cleaning, cooking, late night visitors, long-term visitors, etc. Don’t make it so stultifying that you remove all the fun from your college years, but focus on those things that you’ve seen cause problems in your or others’ past.


Importantly, when leasing property, respect the property of the landlord. Treat it as if it were yours and always maintain a businesslike relationship with the owner of the property and/or the management representatives. How you begin your success in your financial life, as evidenced by how you treat others and the property of others, says a lot about how you will live when you’re the landlord and some person-to-be-named-later is your tenant.


University of Missouri logo links to

Site Administrator:
Copyright  ADA  Equal Opportunity

MissouriFamilies is produced by the College of Human Environmental Sciences,
Extension Division, University of Missouri

Last update: Monday, July 18, 2011