Decreasing your money woes by tracking personal expenses - Elaine Froese | Canada’s Farm Whisperer | Your go-to expert for farm families who want better communication and conflict resolution to secure a successful farm transition


Decreasing your money woes by tracking personal expenses

by | Aug 26, 2021 | Farm Family Coaching, Farm Legacy, Farming Business, Grainews Articles, Wealth Management

A wise person once said you can have more money over a long time if you make more than you spend or spend less than you make. The rollercoaster of grain prices has pinched many farm folks who are saying “I shoulda….”.

What you can do is keep better track of what you are spending on your farm for family living. This is very personal, and fuel for many fights.

Dr. Brent Gloy on a webinar called “2 Economists and a Lender” said that fixed expenses are difficult to measure yet they change over decades. He mentioned that family living gets pushed into the bottom of the “too hard drawer” yet there can be great outcomes if you choose to tackle this issue. Dr. David Widmer, another economist agrees that there are many hidden variables on farms such as shared expenses like vehicles, utilities, and property taxes that may get muddled.

What gets measured gets managed!

Imagine that you think you are spending $38K a year on family living but the real number is $72K. A study in Illinois found the top third of farm families were at $144K, the low third at $57K, and the middle was at $84,300 per year. (US dollars!) On our farm, our number for family living is $75K annually, and that doesn’t include any mortgages for housing nor rent. We also don’t include our charity in that number.

What portion of your family living does the farm need to cover? Many farm partners are working hard off-farm to create a decent cash flow to the farm for family living and debt servicing. Is this number being recognized and appreciated?

The economists recommend avoiding what they call “black hole calculations”, using a number for family living that is the gap between earnings and equity changes. You need to balance off short-term versus long-term payoffs. Recognize that there is a “family living creep”. The number gets bigger during lifestyle changes, inflation and living higher than the farm can really afford. Economists want you to read the billboard that says “Don’t spend it!” Rebuild your liquidity in times of higher-priced commodities.

Once family living expenses go up, it is hard to pull down. A South Dakota family of 4 spends $75K USD, and this number depends on health care benefits, retirement, and whether there is off-farm income. If two people are frugal perhaps $50K is a reasonable family living number with no debt.

My friend Dick Wittman, a rancher, a farmer, and a wonderful management consultant has a tool called the compensation worksheet. You can email me at and I will happily send it to you. You get to work out the farm perks such as housing, cell phone, internet, a pick-up truck with fuel, contributions to bonuses, etc.

How can you make tracking family living easier?

  1. Have a personal account for family living, not mixed in with the farm account.
  2. Use your bank statement to get a quick idea of family living expenses.
  3. Use your debit card or cash. Folks who use credit cards typically spend 34% more.
  4. Talk to your creditors if you are feeling financially squeezed, keep the debt servicing conversation respectful and open. This may also be important if your crop contracts are not going to be met due to the drought-stressed yields.
  5. Consider using a financial planner, you can start with your bank or credit union’s free service. I can refer you to fee for service planners who know to farm.
  6. Entertain yourself with Dave Ramsey and Financial Peace University videos, he has a great success rate with getting folks back on track even though his methods may be a bit far out to you.
  7. Give your kids a Spend, Save, and Give Jar…three different jars to start having more money conversations. Ramsey doesn’t use the term allowance he says, “here’s your commission for being part of this family.”
  8. Get rid of secret accounts. Money is a form of energy and secrets are not helpful. Go back to my blog and start reading the Intentional Wealth Management books.
  9. Consider cleaning out the shop after harvest. New parts never used, things no longer needed amounted to $40K for a farm family who spent a week re-selling the stuff in the shop. You may have things you can convert to cash, but it will take time and discipline to sort that out.
  10. Make your own coffee and tea. Avoid the “latte factor.” Small things add up.
  11. Celebrate small wins. Build on the good choices you are making to decrease your family’s living expenses.

Elaine Froese, CAFA, CSP, CHI Coach is wired to help farm families find harmony through understanding.

Did you enjoy Decreasing your money woes by tracking personal expenses? You might want to check these articles out too:

Intentional Wealth…books to spark money conversations
Farm Women: Say Goodbye to Money Issues by Identifying Your Money Scripts
What does money mean to you?

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