Students -joint account?

spana-copita

Hi,

I hope I've posted this in the right place and that it's not a duplicate thread! I haven't seen anything that's helped me so far.

I'm a University student going into my second year and so am moving into a flat with two friends. My problem is about paying for bills as a joint unit/house.

At first we were going to put money for household utilities into an empty bank account that I had but then decided against it as any debt incurred would be solely in my name.
Then we thought about signing up for a joint account but I've read mixed things on the internet about this that suggest being financially tied to people like this is a bad idea.

Basically what we need is something we can all (3 of us) transfer money into, so that we can all pay for bills like electricity, internet etc. from one account.

Any advice/suggestions would be gratefully received as I'm struggling!

Thanks

Herbalus

Beware of joint accounts - not a good idea, especially if you have a reason to be worried about someone not paying. It won't help you to be linked to that.

You don't need a separate account to pay utilities. Simply get all the bills addressed to all three of you and then one of you can pay after the other two have contributed. You can take it in turns to pay.

In my second year we simply decided to pay for fixed costs (broadband) up front to whoever had paid for it, and then I put all the utility bills on a credit card. I told my housemates I couldn't pay until they'd all paid me, and that worked well

Paying for utilities out of your own bank account doesn't make you liable for costs: it's the name of the person on the utility contract that is responsible. Trick is to have all 3 names on the contract and then decide among yourselves who pays (you can even take it in turns), but only pay after you have the money from housemates.

spana-copita

Thanks that's really helpful.

When you say you paid for fixed costs up front, what exactly do you mean? Sorry if I'm asking daft questions, there are just a few things I'm still unclear about

Would you suggest getting a credit card is a good idea?

I think we'll do what you suggested, have everyone's name on the bills and then take it in turn to pay them, with the other two giving money to the payer.

Herbalus

Fixed costs up front simply means knowing which costs are fixed, and then paying the whole sum to the person who buys it. So we knew broadband was £20 a month for example for 12 months. That's £240 total so £60 each. At the start three of us paid £60 to the fourth and he got the contract in his name.

If you know how much certain costs will be it's so much easier than paying (or having to chase someone) for £5 every month.

About the credit card, it is a fantastic tool and I'm glad I got one. But you need to answer some questions before applying:
1. Are you financially disciplined? If no, credit cards can cost you money.
2. Will you set up a direct debit to pay it off in full each month?
3. What will you use a credit card for?

Credit cards can be very complicated products when you first get them so make sure you understand them. Some pointers:
1. never get cash out on a credit card because it's crazy expensive (apart from some specialist cards);
2. direct debits (in full) is the easiest way to pay a credit card;
3. there are charges for spending more than your limit.