Money: What I Learned Having Roommates – Making Sense Of Cents

For some having a Davis roommate is an ugly necessity. Swinging the rent on a Davis apartment on your own can be tough but but Michelle Schroeder-Gardner has a great spin on What I Learned Having Roommates – Making Sense Of Cents. Here are a few of our favorites:

1. Roommates are the single easiest way for a BIG WIN.

SO I winI’m a big believer in big wins. They have a major impact on your finances and often can be left to run on autopilot once they’re set up. The downside is they can be tough.

It’s easy to say max your IRA / 401k, but you don’t always have the money.  It’s easy to say go to college debt free, but on a practical level it can be tough.

Your living expenses (rent, mortgage, utilities, etc) is likely your single largest expense, and it’s the single easiest to cut with a roommate. It’s a BIG BIG WIN. If you’re simply willing to share your space, your rent instantly cuts in half and if you own your place, you may be able to even live for free. Getting that roommate can also help forgive a lot of small personal finance sins, like keeping the cable or your latte habit because your more than making up for it with that monthly check.

2. It’s tax free.

If your splitting an apartment you are deducting you may be deducting your expenses by 50%, but if you think about how much extra cash you would have to earn to cover those costs, it’s well more than 50%. An extra $600 in rent is more like a $1,000 pre-tax.

If you own your place, I won’t give tax advice, but how you report your roommates contribution, I’ll leave up to you.

5. Craigslist Can Work (it’s not scary).

Depending on what part of the country you live in, finding a place to live or roommates on Craigslist is either completely normal or considered a way to meet a serial killer. I find that people on the coasts (NYC, San Fran, LA) tend to be really comfortable on CL, while the Midwest and South find it a bit scary. Here’s how we find our roommates:

Create detailed description of your home (no address), the space for rent, your lifestyle and expectations. We include our age range, our drinking and socializing habits, our work hours, and our expectations on all those issues. It’s also worth noting no smoking or drugs. We also usually include a photo of the house and the room (which is fully furnished).

Ask for a Facebook and Linkedin profile. This is the crucial step I’ve found. You may not meet a person you click with, but if they have a super normal facebook, with friends, events, and family, they’re probably not a serial killer. Linkedin helps ensure that they have a quality, paying job and a solid job history, and shouldn’t have an issues paying the rent.

If you are really worried about it you can also background check who you are dealing with. We’ve never actually taken this step.

Most emails can go in the trash immediately. We’ve found that if we get 50 emails, less than 10 are worth responding to, 5 we have a phone call with an invite to see the place, and there’s usually a clear 1-2 that we click with and think would be a good fit.

Only choose people you can see yourself hanging out with. This isn’t a tenant in a rental house. You’ll be sharing your kitchen, watching tv together, and likely meeting their friends and sharing experiences.

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