If you're reading this post, I know you are an independent thinker. You probably like to DIY whenever you can. Chances are you're either already a homesteader or you want to be. Maybe you're living off the grid, or maybe you're planning to. And if you have kids, you're homeschooling (by choice, not necessity.)
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Whatever the case may be, it's important to remember that in today's crazy world, financial self-sufficiency is critical to your success.
And even though taking care of your money matters isn't nearly as much fun as some of the other bushcraft, homesteading, homeschooling and off grid activities can be, it's every bit as important.
As a former financial advisor and banker turned off grid homesteader, homeschooler, and business owner, I'm happy to share my top seven tips on how to become more financially self-reliant.
Start Homesteading Right Where You Are
As we continue to deal with shelter-in-place mandates and other restrictions, one thing is certain. The world will never be the same.
We don't know for sure that our food supplies will be in place in a few months. And if we do get access to fresh produce and meat, the experts (and plain old common sense) tell us that it will be expensive.
No matter where you live, your journey to financial self-sufficiency should include learning how to start homesteading. Taking action to secure your food supply will help protect your money because you won't have to spend it all to buy some fresh lettuce or fish.
Learn how to grow your own food to feed your family. Try backyard gardening or even starting a container or indoor garden. And choose some easy vegetables for kids to grow to get children started on financial self-sufficiency as well.
Start with a simple free homesteading course or class and put what you learn into practice at home.
Build a Budget
If you don't already use a household budget, it's time to start. And if you already have one, it's time to fine-tune it.
The fact of the matter is that what you *think you spend in a month is often pretty different from what you *actually spend.
By creating a budget with spending categories and setting a limit on each, you'll find it easier to stick to. It's a lot easier to see where you overspend.
You can track your spending patterns, too. And if you have a spouse, it helps you both stay accountable.
Budgeting can also help with planning for homestead projects to help boost your financial self-sufficiency.
It can help you save money to move off the grid, and, more accurately, see just how much it costs to live off the grid if you already are. And if you're working on financing a homestead, it can also help you find savings as well as potential income opportunities.
You'll find many different ways to create a household budget. Try a free budgeting app on your smartphone, use a free Excel spreadsheet, or try the envelope budgeting method.
Get your partner and kids involved by playing money saving games. The key is to get started with paying attention to money and to creating your household budget.
Track All Your Spending
Along with budgeting, tracking every single penny you spend can help you spot problem areas. Write down or print out all of your expenses. Every. Single. One.
That includes those chicks you bought at Tractor Supply or the extra heirloom seed packs you grabbed at Walmart.
Seeing your monthly spending in black and white can be a real eye-opener. And sometimes that's just what you need to start thinking twice before impulse buying.
Remember, every extra expense you carry means you either have to make extra money or cut your costs elsewhere.
Cut Your Expenses
And here's the big one. How much can you cut your expenses?
Spending less each month means you'll have more money to pay off your debt sooner so you aren't relying on money from a lender. And so you aren't paying interest. (More on this in the next section.)
Cutting your costs means you'll need to make less money to improve your financial self-sufficiency.
While every family and financial situation is a little different, in my experience these are the areas where cutting costs can pay off quickly:
- Groceries - cut your junk food and sweets, grow your own produce, buy in bulk, make more from scratch, and meal plan to reduce your food waste and stretch your leftovers into new meals
- Subscription creep - yes, this is a thing! Check your bank account and credit card statements for recurring digital subscriptions, apps, services, etc. that you don't need or use
- Bells and whistles on internet, cable, and smartphone bills. Cut them and bundle where you can. Call your service provider and ask for a lower rate - especially if a local competitor is advertising a better offer
Pay Off Your Debt to Boost Financial Self-Sufficiency
Is all debt bad? Not necessarily.
Investing in your education with student loans or getting a mortgage to buy a house can put you into a better financial position at the end of the day.
(Full disclosure, I had student loans many years ago and even a mortgage once upon a time. I worked very hard to pay them both off.)
The hard truth is that in the uncertain times we're living in now, it's going to be hard to boost your financial self-sufficiency if you're beholden to a lender.
As long as you have mortgage payments or student loans to pay off, you're not fully financially independent, unless you have a lump sum to pay them off. Otherwise, if your lender calls in your loans, it could wipe you out financially.
And while we're on the subject, have you taken a good look at your mortgage amortization table?
If you haven't, either get a copy from your lender or find a good free amortization calculator online. Look at how much interest you're paying over the life of your mortgage. Not pretty, is it?
Cut your household costs and apply your savings to your highest interest rate non-tax-deductible debt.
Once that has been paid off, then make prepayments to reduce your mortgage principal and pay off your mortgage faster. A long as you can do this penalty-free it's a no-brainer.
If you do have to pay a penalty, it might still be worth it. This is where you should take to an independent financial advisor.
Chances are you'll save hundreds -- or thousands of dollars, depending on your mortgage amount and how many years are left in your mortgage term. And not only will you save money, but you'll also reduce the financial stress that comes with debt.
Get Financially Self-Reliant With Multiple Income Streams
It's pretty tough to improve your financial self-reliance when your family depends on a paycheck from an employer. As the recent economic freeze due to pandemic restrictions has shown us, an income stream can dry up overnight.
The best way to protect against this is to have multiple income streams.
Depending on your skills, work background, interests, creativity, and sheer determination, this could include a variety of moneymaking opportunities.
If you have a full-time job with one employer, great. But start looking at ways to make money with a side hustle. Or two.
Turn a hobby into a home-based small business. Check out my big list of how to make money off the grid.
Explore freelance writing for digital publications. (Tip: start with one niche where you have a lot of knowledge and credentials or authority to back up your writing.)
Do you enjoy teaching? Look for online teaching opportunities you can do from home. For example, the recent number of families homeschooling and working at home has jumped.
Platforms like Outschool, which offers online classes for kids aged 3 to 18 are always looking for teachers in a whole lot of different subjects, including gardening, beekeeping, and homesteading skills.
Improve Financial Self-Sufficiency With Tools to Create Wealth
In our new reality, it's important to realize one thing. And that is that financial self-sufficiency might not mean having a big bank account.
Instead, I believe the most successful financially self-reliant among us will have access to the tools to get what they need for their families.
This could mean producing all (or most) of your own food, making do with what you have, and doing your own repairs and building. It could mean bartering your skills, services, and cottage-industry goods for what you can't produce or do yourself.
That said, there's nothing like a good emergency fund of at least six months of living expenses to keep you independent. You or your spouse could get sick, lose one or more income streams, or face an unexpected financial expense.
I worked in banking for many years, advising people from all sorts of backgrounds on how to manage their money.
Over and over again, I saw the same patterns emerge.
Those clients who budgeted, paid off their debt, invested in themselves, built emergency savings, and created diverse income streams prospered.
Although they got advice from financial advisors like me, they took responsibility for making their own decisions.
At the end of the day, your financial self-sufficiency is up to you. No one else. So roll up your sleeves, read this post over again, and start taking action.