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Blog Post Wednesday 06 March 2019

How to Manage and Split the Cost of an Energy Bill in a Share House

How to Manage and Split the Cost of an Energy Bill in a Share House

Living in a share house is a great way to save on costs. A good option for students or those living in a new city, sharing a household offers many opportunities and freedoms that you wouldn’t otherwise get renting or living on your own. Unfortunately, one of the downsides is that conflict almost always comes up, particularly when it comes to managing and splitting the cost of bills. Bills and money are always a touchy subject, and it can be very difficult negotiating a happy medium between multiple people. According to a recent Australian study, the cost of household bills makes up 66% of conflict experienced in share houses. To avoid any awkward situations and to save energy costs among all parties, here are a few tips:

 

1. Find the right energy plan and provider

Choosing the right energy plan and finding the right provider will make a huge difference when it comes to how much your household will need to spend. Ultimately, you and your housemates need to sit down as a group and jot down a list of considerations including price, contract terms, conditions, tariffs, and discounts along with your household’s daily needs. As there are multiple people living in the house, it would also be worthwhile considering opting for a green or environmentally-conscious or online energy retailer. Compare energy plans by enlisting the help of a comparison website or an electricity retailer such as Click Energy. It may seem like a hassle weighing the pros & cons of each plan, but by doing so you ensure you will end up with the right plan for your household which will take into consideration fair sharing of costs between residents.

 

2. Decide whose name the bill will be in

It’s important to have an open and honest discussion to decide whose name the bill should be in. You can make this fair by spreading the responsibility between housemates; for example, you can choose to have the electricity bill in one person’s name and the gas bill in another’s name. A good idea to devise how much should be shared is by having each roommate paying the same amount. As an idea, if there’s four in the house you can decide to have each one pay 25% of every bill. Following the groups' decision, you should then hold accountability by keeping everything in writing and choosing to keep a formal correspondence for future reference.

 

3. Check if anyone’s eligible for concessions

Students, apprentices, and low-income earners in Australia may be entitled to a Health Care Card or Low-Income Health Care Card. These cards allow you to get a concessional rate on your energy bills. You may also be able to qualify for a rebate through the Commonwealth and State Government’s Annual Electricity Concession, Heating Allowance, Water, and Sewerage Concessions. This will reduce your household’s energy bill and make it a lot easier to split between each other.

 

4. Adjust bills accordingly and fairly

If you’re in a share house where residents come and go or use appliances to varying degrees, it may be an idea to divide energy bills based on individual usage. If one roommate works from home and spends the most of the day on the Internet, they may look at paying more toward the energy bill. Whereas if there’s a roommate who works during the day and often goes out of a night then they can pay less than everyone else. This is all determinate on individual use and how often or significantly an appliance is being used each day.

Depending on everyone’s personal situation, splitting bills may be dependent on income level. In this situation, the renter with the higher income pays a larger percentage. Of course, this also requires open discussion and a mutual understanding between each person.

The best way to avoid conflict in this situation is to make use of an app which allows roommates to calculate and divide energy costs. Using an app such as IOU can be very helpful in keeping track of bills that are owed and it also allows you to send email reminders between housemates. Another app, Venmo, allows for a quick and easy way to split energy bills by allowing users to pay each other directly.  

 

5. Be energy efficient

Make your energy bill more affordable and safeguard the environment at the same time by opting for energy-efficient appliances and fixtures in the house. The three most expensive energy appliances to run in a household are electric hot water units, air conditioners, and clothes dryers. So wherever possible, try to limit their use or opt for a high energy efficiency rating appliance. You can work together by having a meeting to discuss ways you can make your house more energy efficient and devise a shopping list to purchase energy efficient light bulbs or decide that only one day a week will be devoted to laundry to save on daily running costs of a washing machine.