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State of the art of the management of debts inside a social group

Inside a social group (friends, roommates, colleagues, ...), people may have debts between each other : by borrowing/lending money or sharing expenses. Debts induced by shared expenses may happen in different situations, like living with roommates or spending holidays with friends. Some situations may be much more complex than others: settling accounts with your 6 roommates after 5 months of shared expenses is not as simple as splitting the bill at the restaurant. That's why each situation may have its best solution.

The problem called "managing debts inside a social group" consists into two sub-problems:

  • effectively managing debts between you and the people around you: tracking those debts and possibly simplify them (e.g if A owes B who owes C, maybe it's simpler if A pays C directly),
  • calculate debts induced by shared expenses: tracking those shared expenses and calculate the minimum set of debts.

Multiple solutions

Currently, the options for managing debts inside a social group are:
  • pen, paper and calculator,
  • spreadsheet software:
    • desktop apps: Microsoft Excel, Open Office,...
    • online services: Google Spreasheets, Zoho, ...
  • dedicated software:
    • desktop apps: AllBillsConsidered and tons of others
    • online services: Expensure, Buxfer and tons of others (see that post)

Comparison

Pen and paper Spreadsheet Dedicated
Desktop Internet Desktop Internet
simple setup + - + - +
reliability - + + + +
fast/simple input of shared expenses + + + +/- +/-
fast/simple input of debts + + + + +
automatic calculation of debts induced by shared expenses - +/- +/- + +
simplification of debts inside a social group - - - + +
simple shared access - - + - +
handle every situation - - - + +
no accountancy or geek skills required +/- - - +/- +/-
possibility to check by yourself the calculationsn + + + +/- +/-

This is evidently a subjective comparison, based on my experience of 6 years living with roommates and sharing expenses with friends. Anyway, the online dedicated software column gets more "+" than the other. But to my opinion, none of the online tools are satisfying:

  • they lack the ergonomy of a spreadsheet which make entering several weeks of shared expenses such a chore
  • they digest all you shared expenses and debts: you have to trust their calculations, debts are simplified even if you didn't want it
  • most of them group all the expenses together whereas you may want to have several "spreadsheets".

Conclusion

Pen and paper are good if you have few shared expenses and don't want to turn on a computer.

Spreadsheets are a bettered "pen and paper" solution with automatic calculations. They're great for a simple situation like holidays with friends where everybody pays the same. Still they just computes sums and you have to make the debts repartition by yourself (unless you're a macro master).

Dedicated tools can manage every situation but for simple one, you may prefer not to take a hammer to crack a nut.

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