Episode 47 - Homestead Yearly Budget

Homestead Budgeting for the Year E47 Introduction: -

Well, homesteading is definitely a way of life we also have to consider the fact that if we intend to do it full time and not work in a paid wage job during the day we need to earn an income. many years ago I used to be very embarrassed and very nervous about asking people for money for goods that I was supplying off.

I no longer have that problem and I now realise that it's very important for people to pay for what an item is worth I think that gives them a sense of exactly what they're out laying for their health or for good quality food but it also shows them what a cost to produce a product. we live in a completely disposable society and it really is important that people pay what something is worth.

And that sometimes means that it's a little bit more expensive than what you would get at the supermarket but you're paying to have that item produced on a farm that you can go and speak to the producer and know exactly what went into it.

1. Assessing Livestock Needs: - Breakdown of different livestock categories and their associated costs. Make sure to include medical expenses in your calculations, As well as feeding costs betting costs shelter costs and any other items that you might need - Considerations for feed, veterinary care, and breeding expenses. I find it easier to put aside an allocated amount each week or each fortnight depending on your pay cycle for feed and veterinary care. - Discuss the impact of animal numbers on resource allocation. At some point in your homesteading journey, you need to make considerations about what animals will be staying on the farm for their entire life and which ones will be going for food sources. Many people don't like to think about this but unless you have unlimited funds there are only so many mouths you can feed. therefore you need to consider if you are going to sell animals for meat or butcher them on the farm for yourself for me and that way you will reduce feed costs

2. Income Streams and Diversification: - Identify primary income sources from the homestead (e.g., livestock sales, produce). Do you have an off-farm income that you earn and if so are you going to use all of your off-farm income to supply things on your farm. if not then you need to consider what things you can do on the farm to sell or make or use to generate an income. - Discuss the potential for diversifying income streams (e.g., value-added products, workshops, agritourism). diversifying income streams is vital on farms and the reason for that is because of seasonal fluctuations. you can't earn an income of the same source continuously there will always be some seasonal changes for that income source. even without egg production during the period where our chickens are going through their seasonal molt the egg production drops down. so we need to build in either contingency plans for other incomes during that period or building some sustainability as far having chickens that are malting it different times of the year. This year I'm also looking at adding to our income streams microgreens if I can get them up and going given that I'm not the handiest of gardeners I'm also looking at selling some of our Angora wool as just raw wool on Etsy or somewhere like that for crafty types to to buy if they need raw. We were also like to get into supplying pasture-raised meat chicken meat however there are some stipulations and regulations around that and I need to work out whether or not it's going to be cost effective for us. - Consider the seasonality of income sources and planning for fluctuations. It's important to plan for these fluctuations and income because that could affect when you have the money to do things that you need to do on the farm

3. Planning for Off Seasons: - Discuss strategies for managing the financial challenges of off seasons. Like income expenses can also be seasonal. And that's another reason why it's so important to have incomes that are diversified and coming in at different times of the year. - Explore off-season activities that can generate income or reduce expenses. One of the off season income generators that I was also considering was the possibility of putting a tiny home on a property to rent out through as an Airbnb so that people can come and stay on the property and enjoy the Peaceful nature around them it would be a completely off-grid little tiny home so it would be interesting to see whether or not people would want to stay in that - Highlight the importance of having a financial buffer for leaner months. Knowing that you have savings put aside will definitely take some of the stress off those seasonal fluctuations in both expenses and income

4. Budgeting for Farm Infrastructure and Maintenance: - Breakdown of annual and seasonal maintenance costs for farm infrastructure. It's also a good idea to budget at the beginning of the year on things that you want to buy during the year so knowing that you need to get a new ride on lawn mower or a small tractor or some feeder bales is something that you can plan for at the beginning of the year and break down the costs each month - Considerations for equipment repairs, fencing, and building upkeep. Fencing is definitely our big go-to this year we have got some big fencing plans and it's gonna cost a bit of money - Discuss the impact of regular maintenance on long-term expenses.

5. Setting Emergency Funds and Contingency Plans: - Emphasize the importance of having an emergency fund for unforeseen circumstances. - Discuss the creation of contingency plans for unexpected events that may affect income or increase expenses. - Explore options for insurance coverage for key aspects of the homestead. Insurance is something that a lot of barefoot investor type in type of people don't necessarily want to think about because we think if we put the money aside each month then we would have enough to cover for insurance later on but for public liability it's probably a really good idea to consider having the insurance coverage there for your farm. this would be absolutely vital if you are having customers come on to your farm

6. Managing Bills and Utility Costs: - Breakdown of typical utility costs (e.g., water, electricity) associated with homesteading. The people living off grid this type of Breakdown can be very very different we have to budget for battery replacement without offgrid system we also have to budget for water supplies in the event that we do not get enough rain collected into the tank. we also have to budget for a large gas cylinder that we get brought out to the farm every couple of months at the moment we're managing about two large tanks about every eight months which I think is pretty good for gas usage - Discuss strategies for optimizing energy efficiency and reducing utility bills. A system that I like to use for that is to have a mortgage offset account that is separate from other accounts and I put a weekly or fortnightly again depending on which way you get paid in your day job amount into that account that covers battery replacement water deliveries and gas deliveries through the year - Explore options for alternative energy sources and their upfront costs versus long-term savings. Certainly I think the costs of our batteries is definitely cheaper than what it would cost us if we had power on here and we're using normal electricity grid power. some people would disagree with me on that but our batteries we always buy when they're on special and we try and buy a bulk Mount at a time so we always have that money aside for when they come on special.

7. Record-Keeping and Budget Tracking: - Discuss the significance of accurate record-keeping for budgeting purposes. Brickle keeping in regards to our egg laying production is vital for us because that way we know what we can charge per carton through our eggs. I even go so far as to Mark down the egg cartons that we consume so that I know that they would be eggs that would normally be sold and I would normally have to pay for. - Explore tools and methods for tracking expenses and income. MYOB zero etc - Emphasize the importance of regularly reviewing and adjusting the budget as needed. It's important over time to keep checking back in with your budget to make sure that the expenses that you have are being either covered by the income coming in and that they're generating or that you are not overspending compared to what you have budgeted for at the beginning of the year. many years ago I worked as an assistant accountant and we used to do budgeting for quite big companies and it's amazing how much people will overspend on certain areas and understand it in other areas. That in itself is not a problem if you have the income coming in however it's important to stand back and have a really good overview of what is costing you the most.

8. Community and Networking for Cost Reduction: - Discuss the potential for community sharing, such as equipment swaps, seed exchanges, and collaborative projects. - Explore local resources and organizations that may provide support or cost-sharing opportunities. Probably my biggest cost reduction is that I am a very frugal at very handy second-hand shopper I will go to our local greenshed and pick up things that I need or that can be modified that I need for the farm and I don't even blink and I about it. I know some people always like to buy new but I feel that there's no point buying new if I can get something for the minimal amount of the price or a smaller amount of the price and the item will do exactly the same job as a new item would. just recently we had to put in some fencing for our anglo-nubian bucks paddock and we also had to put in a gate I'd want to have to buy a new gate so we went to the green store so we got a secondhand gate that is perfectly sufficient for what we need and it only cost us 25 dollars