How Much Can You Save by Having a Roommate
Stagnant wages and rising rents are prompting many people to consider trading a little privacy in the interest of savings. But how much money can you really save?
Lots. And depending on where you live, that generalization could be huge. In fact, in the Golden State of California – with high-rent cities such as San Francisco, San Jose and Los Angeles – having a roommate can save you into the thousands.
Rent is the big expense
According to Apartment Guide rental data, the average rent on a one-bedroom in San Francisco is more than $3,800 a month, a two-bedroom around $5,300. Cut the latter in half and you just knocked your rent down about $1,150 a month compared to living by yourself in a one-bedroom unit. That's nearly $14,000 saved in a year's time!
Rent may cover your actual space, but you still have to heat it, cool it and stream Netflix from it. Utilities are a mandatory part of the budget. And having a roommate can cut down on all those costs, as well.
Depending on where you live, costs will vary. This isn't just a reference to overall location (San Francisco vs. Birmingham, AL.), it's also about neighborhood and the actual building in which you will live.
Here are a few utilities that you can generally split with your roommate and a look at how much you can save over time.
Some apartment buildings or communities will build an average water cost into the rent (the national average is about $40 per month). Others will combine several utilities and tally them together.
If neither of those is an option for you, it's treated as a stand alone utility bill that must be paid on time.
If you use it, what you're using it for is going to determine the average cost. Heat? Look out Wisconsinites. Hot water or cooking only? Then it's lower (but your electric bill will be higher). The range here is wide – $15 to about $100 per month.
3. Heat and AC (electric)
Again, this depends. Is it central air or a window unit? And how hot or cool do you need it to be? It will vary seasonally, of course, but you and your roomie will have to plan for a higher electric bill in the hottest summer months. The average is about $50 to $150 per month.
Yes, you can save more on getting both from your local cable provider but here's where it's important to really decide if you need that cable or will be happy with streaming services alone. If you need both, that's going to run you in the ballpark of $90 per month. Internet alone is only about $50.
5. Renter's insurance
It's not particularly expensive – roughly $15 a month – but most complexes will require you to have it. Even so, in the event of theft, fire or otherwise, it's well worth the cost.
Adding it all up
In averaging the above utility costs, splitting them with just one roomie results in more than $1,000 savings in a year. Add that to what you're stashing away on shared rent and you're well on your way to lining the coffers of your savings account, paying off student-loan debt or even splurging on a special purchase you've got in mind.
Or it could simply be the solution to moving out of your parents' house.
No matter which, it's a victory.