The short basics are
Offer to help your roommate to budget, pay their expenses as soon as they get their money, so they don’t spend it, or give up an expensive compulsion or addiction.
If they don’t accept your positive help, then you have to stand up for yourself and explain why you cannot give them the money.
This article contains all the 6 main reasons your roommate might keep asking you for, and what you can do about them.
How Can I Be Owed So Much
A college student called the other day to thank me for my advice about a roommate who insisted on having a dog. I really love it when people reach to me that way.
She suggested I write about roommates next who use their friends as auto teller machines. I thought that was a great idea. Much of what follows is loosely from my own experience and the rest from doing a lot of research.
Reason 1: Your Roommate Thinks Life is a Party
Folk going straight from school to college still have to discover life is not an auto teller machine. If your roommate asks for money all the time, there’s a possibility they are hoping you turn out to be a surrogate parent.
- This is not what you want; you have to tell them their attitude has to change. Explain to your roommate that you have just enough money for yourself, and they need to learn how to come out on their allowance, internet freelancing, moonlighting whatever is the case.
- The politer version is to say that you would love to, but sadly you can’ Then say a reason such as it’s because you are short of money yourself
- Teach them how to budget for the month ahead, and set money aside for non-discretionary items like rent and utilities. Then help them work out what they have over for airtime, clothing, transport, eating out, and whatever else applies.
- Offer to sit down and go through their expenses, and do their budgeting with them. Often when you offer to do this, they don’t want to show their expenses; the most common reasons are that it will show how wasteful they are being, or they just can’t be bothered to do it.
- Of course, if they owe you money, they also have to pay you back say over the next three months, so it’s not too hard. I’ll tell you what; they will be so pleased to have extra money in month four they may never try to borrow from you again. Life will be so good again.
Reason 2: Your Roommate is Playing for Time
You have been living together for five months, and you are beginning to realize your roommate has financial difficulties. That’s pretty normal for students. Some are on bursaries that pay their fees, but little else. Others, as we have learned by now think life’s an endless party.
- You have agreed to each pay your half of the rent directly to the landlord. But the landlord is smart. That’s because you are each ‘jointly and severally liable’ in the lease. In other words, you each owe the lot if the other does not pay.
- Every time your roommate pays late, the landlord comes down harder on both of you. Lately they have been talking loosely about eviction and giving you bad credit scores. So you have gotten in the habit of paying the full rent on the due date and having the hassles of recovering your ‘loan’ to your roommate later.
You can’t continue on this basis with your roommate asking for money this way. If you wondered why some landlords are so irritable, now you know!
- Have an open discussion with your roommate. Explain how this is hurting you financially. Tell them you both face eviction, and you can’t afford lousy credit scores at this time in your lives.
Persuade them to agree to a setting up a monthly stop order with their
bank to pay the landlord’s account, or your bank if the lease does not allow
that. A stop order is where they tell
their bank to make the payment automatically each month. Saying how much easier
and less work it is for them, is a good way to sell it. If they do not want to play ball (and you
don’t want to continue bankrolling them), then you
may have to take legal steps according to your state law.
- Your lease may allow you to terminate early, or evict your roommate for regular late payment. You might then be able to sue them for the outstanding amount. However, I can imagine your legal costs stacking up as I write this and I guess you don’t have that kind of money.
- Perhaps your roommate is late with the rent because they are out of their depth financially. They might also no longer be happy about sharing with you any longer. Whatever the case, their heart is clearly not in the joint lease, and they may be looking for ways to get out of it
Tactfully suggest – even firmly if you must – that they find another place to stay. After they are gone, take more care reference checking your next roommate, and making sure you don’t get into this situation again.
Reason 3: Your Roommate Is Living Beyond Their Means
The number of Americans living beyond their means is scary. A third earning over $150,000 have less than $1,000 in savings. Your roommate is also your friend. Therefore, you shouldn’t step aside and watch them sliding down a slippery slope if they keep asking you for money.
So what you need to do instead is sit them down and have a friendly chat about finance. Say ‘you keep on borrowing money from me to come out and I like to help. But what are you going to do when you are on your own’.
Of course, they may still be in denial and not understand what your problem is. In that case, you need to take time out and explain these principles of responsible personal finance.
1. Be guided by your credit rating
America lives on credit, and it is a given that suppliers expect you to borrow, That’s great if you want to purchase your first condo, but bad news if you are using your card to pay for drinks after work. Why is that?
- Property is an enduring asset that keeps its value. You could get your money back (and more) if you sell.
- If you borrow money for consumption items, you still owe the money when you have eaten the food or watched the movie.
Therefore, you are not doing your roommate any favors by allowing them to borrow from you. In fact, you are helping them get deeper into the debt cycle, and this is why you would like to stop.
Suggest they monitor their financial health by checking their ratings on TransUnion, Equifax, and Experian every few months. If their scores are dipping towards 600, from 850 max, then they need to reel back on their borrowing real soon
2. Always keep a little back for a rainy day
Responsible people regularly save at least 10% of their disposable income. That’s because they know they need a backstop in case their income collapses under them. This income could be their ‘pocket money’ at college, or their wages from moonlighting or a regular job.
Help your roommate understand they are skating on extremely thin ice, so to speak if they are spending all their income every month – and borrowing from you too. Eventually, this ‘support’ will collapse under them. When you are on your own without money, this is a difficult hole to climb out of without help.
3. Watch your credit card balances carefully
Smart people pay their cards in full at the end of every month. They have a self-imposed limit, and they use this rather than carrying cash. However, if your roommate only pays the minimum to keep the bank happy they are being foolish. Why is that? That’s because their total debt is rising.
- They are behaving like a country that keeps borrowing from the International Monetary Fund until that dries up.
- Those foolish countries end up spending more on their international debt interest than on their people — no prizes for what happens next.
Help your roommate understand that borrowing from you to pay for shared expenses is a short-sighted habit. Eventually, they are going to drive you away too. Who then is going to bail them out? When they answer ‘probably nobody’ that’s your chance to say ‘let’s sort this out.’
4. Don’t spend more than 25% of your salary on accommodation
Ideally speaking a single person should spend their available income as follows:
- 25% on accommodation costs
- 20% on savings including annuities
- 15% on food including dining out
- 15% on subscriptions, utilities, transport
- 10% on medical insurance
That leaves just 15% over for discretionary holidaying, partying and hobbies. If their share of the rent costs more than 25% of their net, you may have discovered why your roommate keeps asking you for money.
Accommodation in many of the world’s capital cities can be exceptionally high, so people have to spend a third of their income on housing and this often causes problems.
Reason 4: Your Roommate Has an Addiction or Compulsion
Wikipedia, Figure shows drug addiction, author U3155259
Addiction is more than just about drugs. Your roommate could be addicted to a substance or activity costing money. This means they cannot stop the activity even though it is harming them mentally or physically
1. Addictive Substances
- Alcohol, marijuana, PCP, LSD and other hallucinogens
- Stimulates, for example, cocaine, and methamphetamine
- Opioid painkillers including codeine, oxycodone, heroin
- Intoxicating inhalants for example paint thinners, glues
- Medicines that sedate, tranquilize, or relieve anxiety
- Tobacco, whether smoked or nebulized in a vaper
2. Addictions and Compulsions
Addiction is a broad term where the victim becomes dependent on behavior (or substance) to cope with life. It’s important to understand that they are victims as much as if they had a disease.
- Their dependence becomes more friendly to them than anything else in their lives. This includes their jobs, their families, their roommate, the rent, and even their lives themselves. Addictions usually begin as compulsions, for example needing to attend every match in a league, whatever the cost.
- However, gambling stands out as the most compulsive (and dangerous) form of addictive activity because it offers hope, and the numbers are rigged so that hope does sometimes occasionally come true.
- Addiction and compulsions are challenging to deal with because they are not logical behaviors we can analyze with our minds. They are driven by deep-seated emotions instead.
- A psychology professor I knew explained emotions stack like cannonballs on an old navy ship or outside a fort. “You can rearrange the top layer,” he said “but you interfere with the bottom corner at your peril. That’s because the whole pile could come tumbling down and you could harm yourself”.
Even everyday things can become compulsions, such as memorabilia when following a sports team.
It’s quite normal to follow a league team, and spend your entire discretionary allowance on attending matches and purchasing memorabilia. However, if this means your roommate keeps borrowing money from you to cover shared expenses that is another matter.
Be careful with a person who has an addiction
I don’t suggest you discuss addictive behavior with your roommate. That’s because they may see you as the only way to satisfy their compulsion, and this could create a bitter reaction you might regret. Remember, their condition is blindly driving their behavior, not the other way around.
They are deaf to reason. You need to seek professional advice because I am not qualified to provide further information. However, do take care of yourself: Especially if you are young and have your life ahead of you.
Reason 5: Your Roommate think they can pass the buck
The best plan I know when it comes to shared expenses is to set money aside at the start of each month, so you have food on the table and can afford to download movies.
However then there is an ‘exception’ you never saw coming and it’s something you want too, so you roommate thinks they can make you pay for it.
An example of a crunch time like this is when there’s a special occasion, or your roommate invites a load of friends round for a party.
What can you say when your roommate says “lend me a hundred dollars for beer and pasta.” You have to believe them when they say “don’t worry my dad will come up with the money” unless they have said this many times before, it has never happened, so that can be your reason.
You are on tricky ground when this happens because people tend to repeat what works for them. That’s because we surround ourselves with information that matches our beliefs. If you weaken, your roommate will continue their reckless borrowing, and you will be the loser. So you need to stand your ground!
What you do is never have more than $20 in your pocket, and choose a provider that does not have an automatic teller nearby.
You will enjoy the party so much better when you know your roommate is paying their share. And guess what, they’ll think twice about impulsive spending when you know you don’t have the cash to lend.
Reason 6: Your Roommates Has a Short Memory
Sharing expenses is an excellent recipe for misunderstandings, and this can easily lead to conflict. This is especially the case if you announce at month-end “okay you owe me a certain amount for my contributions.”
“No way” your roommate is ten-to-one likely to reply. “How can it be so much?” And if you read out the details, you will soon start feeling awkward as you mention a few dollars here and there for items like soap and toilet paper.
What you need is a transparent system you and your roommate can review at any time of the month.
I recommend using free software like Splitwise you can both log onto and update as often as you like. At month-end, you click a button and the software calculates who owes what, and the final balance due.
That way, your roommate is far less likely to keep asking you for money each time they want to buy something for the apartment. That’s because they know you will log it on Splitwise and at the end of the month they will have to cough up and settle their debt.
Of course,
you wouldn’t have to manage money this way in a perfect world. However, until
that day comes you will have a smoother, more comfortable relationship with
your roommate, when you take a formal approach when
it comes to money.
A roommate agreement that you both signed and agreed to also helps. If you don’t have one, although it’s best to have done it before you became roommates, it’s still better done now than not at all.
What I Learned From my Experience
The Roommate Who Thought I Was Their ATM
I remember my first roommate when I was a fresher at college. This was the first time I lived away from my parents, and it sure was a learning experience for me. I was lucky I guess. We were not wealthy people, and so I already knew how to stretch my money through a month.
Now my new pal had a different take on finances, as I discovered when my roommate started asking for money. I had a roller-coaster surge of emotions as the days stretched into weeks and even months.
How This Situation Affected Me Personally
- I had less money for myself and had to cut back on discretionary spending on clothes and to eat out with friends
- Getting my money back as soon as my roommate promised became a problem, especially as they gave me loads of excuses each time
- I felt increasingly mean about asking for repayments. To be honest, I started feeling I was the problem
- I didn’t want to be greedy, but my roommate was rolling their debt at my expense, and this didn’t seem fair to me
That happened a way back but from what I from what other people have told me, not much changes. The eternal triangle, you, me, and money can be as troublesome as ever unless we check a roommate carefully before we decide to share with them.
If You Want to Keep Your Roommate Consider This First
Perhaps you really like them, and you get on famously except for your pal is forever running out money. Or so it seems because you never know for sure before you drill down into what is really going on.
So let’s explore the possibilities together. If I can help you understand your situation ‘from a distance’ then I hope my advice will help.
Of course, if your roommate is an inconsiderate person walking all over you like a floor rug, then perhaps you should take legal advice and serve papers on them before they walk away from what they owe.
Sure, that’s the end of the friendship if that’s what friends are for. But then we both know that’s not the case. You can assume from what follows your roommate is basically a nice person who just needs to come out on what they have.
The best you can typically do is be as pleasant as possible about it, so you don’t damage the friendship. You have to stand up for yourself, but not be aggressive.
Say it’s sad that you can’t give them money and explain why you need it, or can’t give it to them. Do it with sympathy and compassion, saying why you can’t do it.
If they start getting into a debate about it, don’t get drawn into that, it’s your money, and you don’t have to win an argument to keep what’s yours. Almost like when going past a beggar in the street that you choose not to give money to, don’t engage.
Wrapping Up and Closing Out: A Roommate That Keeps Asking for Money
We have been on quite a long journey on this topic haven’t we, you and I. Let’s summarize quickly what we have discussed and discovered together.
There are six possible reasons why your roommate may be asking you for money
I offered you a workaround to all six possibilities. These all call you to stand up and be your own person. Room sharing is like any other relationship. It has its ups and downs because that’s the way life works.
Having a roommate can teach you a great deal about standing on your own feet. I know, because I lived that way myself after I left home when I wanted my own life. I’ll be back soon with more thoughts about the ups and downs of roommates. Until then, you take care, and please be happy.
Sources
https://www.merriam-webster.com/dictionary/jointly%20and%20severally
https://www.thebalance.com/dont-let-a-roommate-ruin-your-credit-960988
https://www.splitwise.com/
https://www.thestreet.com/personal-finance/even-high-income-people-overspend-14776389
https://www.investopedia.com/articles/pf/08/in-over-your-head.asp
https://www.cnbc.com/2019/06/13/what-its-like-to-live-in-san-diego-on-80000-a-year.html
https://www.psychiatry.org/patients-families/addiction/what-is-addiction
https://en.wikipedia.org/wiki/Gambling
https://www.verywellmind.com/the-difference-between-an-addiction-and-a-compulsion-22240
https://en.wikipedia.org/wiki/Addictive_behavior