Homestead Budgeting

When living on a homestead, there can be a lot of extra expenses that those living in an urban area don’t have. Most people, regardless of where they live, will be paying for rent/mortgage, water, trash, electric, internet, and phone. Other expenses that everyone will have are groceries, gasoline, and auto insurance. Additional expenses may include a car payment, student loans, credit card payments, cable, medical insurance or medical expenses, and the list could go on and on.

When living on a homestead, you tend to pack some additional expenses like feed, hay, fencing materials, livestock processing costs if you don’t do it yourself, and more vet costs for vaccines or emergencies. You also tend to have expenses such as seeds, soil, and canning equipment if you are growing your own produce.

Regardless of what your expenses are, life has a way of adding up VERY quickly and finding yourself in a place where you are struggling to make ends meet will not only increase your stress and lead to health problems but also have a negative effect on your relationship and overall wellbeing. It is crucial that one of your top priorities is your finances.

Creating a budget where you list all of your fixed monthly expenses (ones that are the same amount every single month) is relatively easy. The more difficult part is listing your expenses that may fluctuate like your water bill, groceries, fuel, or livestock feed. There is no way to know how much these things are really costing you without doing a little bit of math. For things like electric and water, you can add up the last 12 months, so you have a year’s worth, then divide the total amount by 12 to determine your average monthly cost. This will allow you to have a rough estimate of what those bills will be every month. You can do this with any bill that you have and will continue to have each month.

For expenses that are a little more varying, like groceries, gas, and feed, you can take a guess on what you think you spend each month, but you will likely be underestimating the actual amount you’re spending from month to month. It is crucial that you start tracking your spending. No matter how big or small, you need to keep track of every single penny that comes into your home and goes out of it. Doing this is going to be a huge eye opener of how much money you are actually spending each month. You can list them by category such as groceries, cleaning products, hygiene, etc. and you’ll likely find that you have categories such as eating out, tools or repair materials, clothing and shoes, subscriptions, and a whole list of other things that you are spending on from one month to another. Spending $10 to $20 here and there may not seem like a lot, but it’s usually those little things that end up totaling a huge amount each month. Some of the spending areas we found adding up were books, monthly subscriptions, my husband's beer, cigarettes (time to quit!!), eating out, auto parts/maintenance, clothing, tools, and fencing. They seem so far and in between, but really, they were more common than we thought.

Tracking all of your spending down to the cent will give you so much insight to where your money is actually going. Knowing these costs will allow you to find areas where you can decrease spending or eliminate them entirely. One category that I will be completely eliminating is books. I have tons of books that I haven’t read yet and should be good for the entire year, if not the next two years! Even after I read them all, I do not need to be buying more. The library is free!

After you’ve done some tracking homework for at the very least one month, you will now have a little more insight to be able to continue building your budget. The more data you collect, the closer you can become to really creating a budget that is accurate. While collecting your data, you can even be making changes to reduce or remove expenses as you go. You need to list your income totals in your budges and all of your fixed/flexible expenses to ensure that you are making more than you are spending each month.

While homesteading, tracking your expenses associated with feeding, housing, and caring for you livestock will be crucial when creating your monthly budget. It will also help you figure out if you are off setting the costs enough by selling eggs, selling babies, or whatever other type of income you may be bringing in from your land. If you are not bringing in any money, not paying for eggs, meat, milk, etc. is a great thing to track. Whatever your animals provide you with can be tracked and that money saved is part of offsetting your cost of raising them. With eggs for example, one dozen of organic, cage free eggs costs approximately $6.15 where we live, and we collect on average about 6 dozen eggs per week. That means that we are saving $160 a month on eggs. Granted, we don’t eat 6 dozen eggs per week, but we do sell them every Sunday at our farmstand, and that income goes back into paying for their feed. You’ll have to do quite a bit of math to determine if you are making money, breaking even, or losing money on your farm, but it is definitely something worth knowing!

Once you have your budget created and it is listing all of your income and expenses, you will be able to make some financial goals whether it is paying off debt, saving more money, increasing your income, or opening up an investment account. The sooner you are debt free and are saving for the future or an emergency, the better off you’ll be. You don’t want to be in a position where one unplanned expense, like needing new tires, completely derails your budget and overall financial health. You know things happen, so having a proper monthly budget in place and some money for life’s surprises will help keep you in far better shape both financially and mentally. Wherever you are at financially, YOU and ONLY YOU have the power to change your spending and get to a place of comfort and abundance! Get committed to your financial goals, practice self-control in relation to your spending, and make it happen!

Cheers to homesteading and a life of fulfilment!