Viability Calculator Link

HOW MUCH SHOULD EACH HOUSE MEMBER PAY PER MONTH or PER WEEK?

Click here to download the Oxford House Viability Calculator (Excel spreadsheet)

 

Each Oxford House must be self-supporting and each Oxford House resident pay an equal share of his or her Oxford House’s monthly expenses. What does ‘self-supporting’ mean and how does a House figure out the right amount for each resident to pay? The answers are found below.

 

  1. The Oxford House charter requires that all Oxford Houses must be self-supporting.

The residents of each Oxford House are responsible for making sure that all House rent and household expenses are paid by the House on a timely fashion. This is a matter that must be reviewed at all weekly House meetings to make sure that enough money is being collected from the residents to cover these expenses, that these monies are secure in the House checking account and that the rent is paid on time each month and the payment is reflected in the bank statement. Failure to make these payments on a timely basis could result in the charter being withdrawn. This doesn’t happen often but, if a House is acting financially irresponsibly and not supporting itself as required, charter revocation can occur in order to protect the good name of Oxford House, Inc. and all individual Oxford Houses that are in compliance with their charter.

 

  1. All Oxford House residents must pay an equal share of their House’s rent and household expenses.

All Oxford House residents must pay an equal share of rent and household expenses. That means all residents pay the same amount as every other House resident each month. House residents don’t pay more or less because of greater income or because they have single room or for any other reason. All residents share equally in the support of the House. This policy avoids having someone assert more power because they contribute more than others to a House. Everyone in a House is equally responsible and has an obligation to encourage all House members to understand the policy and abide by it.

 

  1. How much must each House resident pay per month?

The equal share of rent and expenses that a resident must pay each month depends upon both the amount of rent and household expenses for the month AND the number of House residents available to make the payment. So long as the rent and the household expenses AND the number of House residents remain the same, then the amount of the equal share of expenses remains the same. BUT, if either the amount of rent and expenses or the number of residents in the House changes, the equal share amount must be recalculated.

 

  1. How does a House calculate what each resident has to pay?

The basic formula is that a House must calculate the total amount or rent due for the month and the cost of utilities, telephone, cable TV and any other expenses that the House includes in its common expenditures. (It’s always good to estimate expenses little high; that lets the House cover any shortfall if there’s an unexpectedly large heating or other bill and lets the House carry a small surplus in its account for emergencies.) You then must divide that number by the number of residents in the House. The result is the monthly equal share that each member must pay. REMEMBER, however, that if you have a vacancy, you will have to recalculate the equal share and each resident will have a higher amount to pay that month and each succeeding month until the vacancy is filled. (The better you are at keeping your House full, the lower the equal share will be for each House member.)

 

  1. THE VIABILITY CALCULATOR

Click here to download the Oxford House Viability Calculator (Excel spreadsheet)

The Viability Calculator is a tool to help residents of an Oxford House to quickly do the arithmetic that is necessary to accurately compute the “Equal Expense Share” that each resident must pay for a house to have enough income to pay its bills. You put the numbers in and the calculator will give you the equal share amount.

 

Examples of Equal Share Calculations

Example #1: Suppose your household expenses – including rent to the landlord – are $4,000 a month and ten residents live in the house. The equal expense share [EES] for each resident would be $400 a month. [$400 x 10 = $4,000]. What happens if there are five vacancies and only five residents live in the house? The equal expense share [EES] then has to jump to $800 a month. [$800 x 5 = $4,000]

Example #2: Another example is a house that has seven beds and monthly household expenses of $3,800. The EES would be $543 a month [$3,800 ÷ 7 = $543]. If the house has only five residents, the EES would have to be adjusted to $760 a month [$3,800 ÷ 5 = $760].

If your house determines the equal expense share [EES] on a weekly basis, remember that you cannot convert the monthly expense to a weekly rate by assuming that every month has just four weeks. If that were the case, we would have only 48 weeks in a year! Therefore, it is necessary to convert monthly expenses to weekly expenses by multiplying the monthly EES by 12 [because a year has 12 months] and then divide the result by 52 – the number of weeks in a year.

The weekly EES in example #1 is $92.30 [$400 x 12 ÷ 52 weeks]. The weekly EES in example #2 is $125.27 [$543 x 12 ÷ 52 weeks]. The viability calculator helps a house to remember to list all its expenses and then makes the math automatic and easy. BUT you must remember to reuse the calculator whenever you have a vacancy that lasts for a week or more. If a house wants to make sure it does not violate the second condition of its charter, residents should recompute the EES to make sure that its income is enough to pay all the bills on time.

 

Review the EES [Equal Expense Share] at least once a month to make sure it is high enough to pay all the household bills including rent, telephone and cable TV.

 

  
 
 
Phone:  (301) 587-2916    |    Toll Free:  (800) 689-6411    |    Fax:  (301) 589-0302
Address:  Oxford House, Inc. · 1010 Wayne Avenue, Suite 300 · Silver Spring, MD 20910