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Setting up a joint account to pay household bills as a student?

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Setting up a joint account to pay household bills as a student?

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
6 replies 27.5K views
AnnaUniAnnaUni Forumite
14 posts
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
Hi

I'm a student in my first year of uni. This year, I have lived in uni halls, so haven't had to worry about bills or anything. Next year, I'm moving into a privately rented house with 3 friends. We've found a house and signed a contract, but now we're thinking about how we're gonna pay our bills. We've spoken to some second year students, and they've said that the way they do it is they have a joint bank account set up in the names of 2 people living in the house, then everyone sets up a standing order to pay money regularly into that account, and all the bills come out of it. Does this sound like the best way to work it? And if so, roughly how much do you think our monthly bills will be (we need to make sure we put enough in to cover them!) And also, the main question I wanted to ask really - which bank account would you recommend for this situation?

Replies

  • CLAPTONCLAPTON Forumite
    41.9K posts
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    Madness.. completely mad
    just don't do it.

    A joint a/c links the people (it can be more than 2 ) financially so if one has a bad credit record then all will be affected

    A joint a/c means that all are jointly and severally responsible for the debts.. so if one refuses to pay then the other is wholey responsible.

    If one runs up an overdraft then the other is responsible .

    Its difficult to close a joint a/c so it can haunt you for years afterwards.

    Keep it simple.

    Make each person responsible for one bill i.e. elec, gas, water, phone

    when the bill comes in then sit down and divide it up and one pays the bill and the others simply transfer their share to the payer
  • margaretclaremargaretclare Forumite
    10.8K posts
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    No, I wouldn't do it in your circumstances, living with friends in a shared house.

    It works for us, but then we're a married couple living in the same house, we keep a joint account just for this purpose and we both tip into it from our own accounts, bills are paid by monthly direct debit. But that's completely different.

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • CLAPTON wrote: »
    Madness.. completely mad
    just don't do it.

    A joint a/c links the people (it can be more than 2 ) financially so if one has a bad credit record then all will be affected

    A joint a/c means that all are jointly and severally responsible for the debts.. so if one refuses to pay then the other is wholey responsible.

    If one runs up an overdraft then the other is responsible .

    Its difficult to close a joint a/c so it can haunt you for years afterwards.

    Keep it simple.

    Make each person responsible for one bill i.e. elec, gas, water, phone

    when the bill comes in then sit down and divide it up and one pays the bill and the others simply transfer their share to the payer

    But surely that would still cause problems? If people don't pay up, the person responsible for that bill is going to be left with a bill to pay on their own. And it would be hard to keep track of whose paid who with the money going to so many different people. My thought was that if we all had standing orders set up, at least then you can almost forget about having to pay the money, because it's done automatically. I get what you're saying about the problems of a joint account, I'm just trying to find the best solution. Would it maybe be better then to do what I originally said, but with a single account in just one persons name?
  • The thing with each having a bill in your name, is that everyone will pay up, because they want everyone to pay up when its time for their bill. And if one person doesn't pay you for your bill one month, then the next month, you just don't pay them for their bill. It does work easier if everything is paid monthly - big lump bills like gas or elec can cause probs, so go with monthly DD if you can.
    I really wouldn't get a joint account, it just means potential problems could get much worse than they need to. EG someone could use it to pay personal bills, or go into the overdraft, etc. I just think the benefits of a joint account don't outweigh the downsides. (I say this as a student in shared housing for 3 yrs, we never had a joint account, but each had responsibility for one bill)
    I would sit down and work out how much bills are likely to be each month (average any bills that don't come monthly) so that everyone knows how much they will need to budget for which may nip future problems in the bud.
    Also you will need to work out strategies for some things eg landlines which some people might use for phone calls but others will not, but you will all use for broadband etc...
    How much your bills are depends on a lot of things, if you know where you are going to be living why not ask the current tenants for their estimates.
  • If someone is willing to set up an account just for bills in their name then fair enough but it's not a role I would volunteer for!

    Personally I would do as clapton has suggested and each take responsibility for one bill and split the cost for each between you. If one person doesn't pay up for your bill then it's quite simple, you don't pay up for their bill! The only way to make sure everyone pays is to make everyone responsible. It's useful for each person to have a bill in their name anyway as so many places these days require a utility bill as a form of ID.
  • juggan66juggan66 Forumite
    1 posts
    Thought I would reuse this thread rather than start a new one.

    I am looking for a similar account. My wife and I live with another family member and we split everything three ways. There is no trust issue. Obviously I trust my wife and the third party almost as much.

    We want a current account between the three of us. Ideally we would like 3 debit cards (for groceries etc. which we also share equally) and a half decent rate of credit interest as we intend to keep a float of around £1,000 in there for contingencies. We are not interested in overdrafts or loans or anything. Oh and probably a chequebook (one between us should suffice) in case we need to write a cheque for anything.

    Does anyone have any suggestions?

    Re the OP's question, in your situation I would not advise it. I lived in many (10 or more) different student/shared house arrangements when I was younger. No direspect to you or you're freinds but you will always get problems over the bills. I found the best way was to have everyones name on the bills but to pay them in cash so noone gets stuck with all the DDs. The one bill each idea sounds good too though - I never thought of that one! Better still, for gas/electric get key meters, don't bother with a landline (everyone has mobiles nowadays, right?), Council Tax you're exempt from, that just leaves water rates for essentials plus luxuries e.g. sky, broadband. Keep it simple is my advice!
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