Making a Farm Budget
When my husband David and I first purchase our farm it was in the middle of the year. It's a 1911 fixer upper farmhouse so for the first few months we just made it liveable. There were a lot of lessons learned when we first moved in so we didn't get as much done as we were hoping - and that's okay. Then Christmas hit, we had used all our money so we had to borrow from my parents. Have you ever had to borrow from your parents in your adult life? It's embarrassing.
So then January hit and we decided it was time to make a difference. We used to budget monthly, we needed to get back on track. But farming is a whole new beast. How do we know what we are going to spend? How do we know if we have enough money?
Enter the Farming Family Budget. In my other life I am an English teacher. Still doesn't sound like I would be good with numbers does it? Well I'm not. So that's why I use my Educational Technology degree to help make spreadsheets. If you want to see what the budget looks like before you keep reading, check it out here!
Why It's Important
Like I mentioned previously, David and I budget monthly AT THE START OF THE MONTH. We follow Dave Ramsey's EveryDollar budget app and calculate what we are planning to spend. To quote Ramsey we, "Tell our money where it's going instead of wondering where it went." Budgeting helps our household know what money we are going to spend BEFORE we spend it. I'm not here to tell you what you have to do, but when "41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money" (Hill) then it is a problem I want to help.
To be more specific to farmers, "More than half of all farmers have lost money every year since since 2013, and lost more than $1,644 this year. Farm loan delinquencies are rising" (Semuels). Farmers are in crisis because to keep their farm afloat they are spending more than they are making.
And that's where budgeting comes into the picture. We are beginning farmers. Everything costs money and we aren't making that much yet. Both my husband and I have off the farm jobs. We are using all of our extra income to subsidy this farming dream we have. I understand that not everyone can do it like we are (or even want to!). But I would still strongly encourage you to create a budget so you aren't out of cash by November.
Think of all the different ways your money could possibly be used. We split our expenses up into House, Farming, and Garden. We listed as much money that yearly goes into those big areas. After that we made our dreams. What did we hope to accomplish this year? How much would that cost us?
Once we had a plan I created a Google Sheets template to help update automatically. It allowed for a great conversation where we talked about our big ideas, our hopes, our dreams and we saw what money we had to accomplish them. The budget isn't perfect. There are still going to be expenditures that you did not anticipate. So leave room in the budget for these big items. You don't want to have the furnace go out in the middle of winter with no money to pay for it because you spent it on fencing. Not that that's happened to anyone we know *cough cough*.
So if you are struggling in your farm, not knowing how much money you are going to spend, or what you have money - create a budget. If you want to use mine, feel free! It was definitely set up for us, but I think you can make it work for you!
If you want to see a video of our budget check out the link here.
I am feeling better about our farms outlook all because we took time to do the hard thing first! So if you would "rather be farming", do the budget first and then get out and get it!
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