Are you a new homesteader looking to start your own rural or backyard homestead?
Or maybe you're an experienced homesteader pursuing your homesteading dream on a tight budget. Either way, your money management activities could make or break your homesteading dreams.
Get started by creating a homestead budget to improve your chance of success as a homesteader.
Why a Homestead Budget?
Now, I know that not everyone loves to chat about finances.
However, homestead budgeting, personal finances, and other money matters are all near and dear to my heart.
You see, before my life homesteading off the grid, I was a financial advisor in the Toronto area. And my "main" business is a freelance business and personal financial content creation company.
You'll find literally hundreds (thousands?) of my budgeting, credit, investment, and savings articles online.
I've covered everything from funding source alternatives for small businesses to mutual funds. I've written about how to pay off your mortgage faster and how to compare savings accounts and money market funds.
And I've even created detailed explanations of how the Federal Deposit Insurance Corporation operates. (Yes, I really do enjoy writing about this stuff.)
I've also discussed how to shrink a grocery budget, retire on a fixed amount, and help protect against possible loss of principal down the road.
And on this site, I've also discussed topics like financial self-reliance, saving money, and income-producing activities for off grid homesteads.
Note: this article is about how to create a budget when you are already homesteading.
After almost 25 years of combined experience as a financial advisor and personal finance money writer, I know one thing for sure.
Long term financial success always starts with a budget.
Budget for Homestead Success
Whether you just started homesteading or you've been at it a while, going through an annual budget process for your homestead is the only way to see exactly how much money comes in.
And a budget helps you to see just how much money comes out of your account each month.
Whether you're apartment homesteading, looking for homestead land, or you're already a property owner with acres of land, you need to know the beginner homesteaders budget basics.
How to Create a Monthly Homestead Budget
Creating a budget for homesteading may seem like a daunting task. Yet once you do it, it gets easier.
Here's the simple version. Note: Simple does not mean easy.
- Start by listing out your after-tax income, homestead and household expenses, then your current long-term, short-term, and emergency savings. Don't worry if you don't have anything saved yet. (Well, you're right to feel concerned, but don't feel bad. This is the reality for lots of people. That's why I wrote this.)
- Set realistic goals for each category of expenses, savings, and emergency savings. (More on that down below.)
- Develop a system to monitor your spending.
- Make adjustments as needed.
- Don't spend more than you make.
- Save a portion of your monthly income.
Following this homestead budgeting advice will help you stay on track with your long-term homesteading plans.
Homesteading Income Sources
How are you making money on your homestead? If you're anything like most homesteaders I know, you likely have a variety of income sources.
List them all - including the amounts.
Not how much money you hope to make from your homestead. The amount of money you make right now.
Don't worry, you'll brainstorm homestead income later on.
Monthly Homesteading Expenses to Include in a Budget
If you search online, you'll find all sorts of free online budgeting tools.
You'll see everything from fillable PDF version forms to old-fashioned printables, software, Excel sheets, and even Google Sheets budget templates.
While these offer a good starting point, the reality is that as a homesteader, you'll have several additional expenses.
So you need to create a budget that accounts for these homesteading expenses. Doing so will make it easier to manage your household finances.
Use this list of specific ideas and expenses to include in your monthly budget to ensure your finances stay on track.
This includes all food items and kitchen supplies required for cooking, canning, baking, and processing any homestead meats.
If you prefer to list this under home expenses, that's fine too. I just find that many homesteaders have different food and grocery expenses and bills than non-homesteading families.
Include seed packets, fertilizer, garden tools, seed starter trays, sprinkler systems, hoses, plant pots, etc.
If you're raising animals on your homestead, include this essential expense, especially if you don't grow crops to feed them.
As we found out a few years back, it's pretty easy for feed costs to really add up quickly.
One year we had almost 40 chickens over the winter and spent close to $500 CAD getting chicken feed shipped up from Hay River, five hours south of us.
I plan to experiment more with chicken feed recipes. And grow my own chicken feed - a bit tricky this far north, but I'm willing to give it a go!
Are you heating or cooling your chicken coop, barn, or other homestead outbuildings in addition to your own house? If so, budget for it.
The cost of fuel or electricity to power heaters or coolers when necessary.
Water Bill/Well Maintenance
Your homestead water bill depends on whether you get your water from the municipality or town or if you have wells on your property.
In our area, all the homesteaders we know (including us) get our water for free from our lakes. We have a pretty decent custom off grid water system setup. Yet we still budget for our pump purchase and maintenance.
Homestead Building Materials
I've yet to meet a homesteader who WASN'T working through a long list of homestead projects. And another long list of homestead projects to get started on.
The easiest way to budget for upcoming homestead projects is to prioritize the projects first. Also, use homestead seasonal checklists to get organized.
Then save for the first one. Otherwise, it is too easy to start feeling overwhelmed and discouraged.
Estimate costs for lumber, concrete, sheetrock, insulation, hose, etc., you may need to build outhouses or sheds. And don't forget the smaller items, too, as their costs may add up quickly.
For example, you'll need nails, screws, paint, etc., for maintaining buildings around the property.
If you plan on construction off the grid, you may want to budget for additional diesel fuel or gasoline for a generator to run power tools.
Actually, it's a good idea to overestimate all those costs by at least 10 percent. And don't be surprised if your final costs still come in higher than expected.
The year we budgeted for a chicken coop (all new construction), the pandemic started. The Northwest Territories closed the BC and Alberta borders.
Shipping costs increased dramatically. At the same time, the price of lumber skyrocketed.
It was one expensive chicken coop.
Livestock and Homestead Animals
Budget for your chicks, chooks, goats, pigs, geese, cows, etc. ahead of time when you can. And don't forget to factor in shipping costs if needed.
This includes any expensive equipment, including tractors, bush hogs, chicken pluckers, portable greenhouses, cold frames, permaculture supplies, canning supplies, smokers, dehydrators, etc.
Once you've tackled the list of homestead expenses, the next step is to look at your household expenses. That is where your money goes each month to keep your family fed, housed, and clothed.
This includes food, rent or mortgage, property taxes if needed, and property/tenants insurance if needed.
Don't forget utilities - heat, hydro, water, internet/cable, transportation costs.
You may also have debt repayments such as student loans, consumer loans, credit card debt or other monthly obligations such as financial support for an ex-spouse or children.
Record all of it.
Even the private loan payments you're making.
The only way to start moving in the right direction with your homestead budgeting is to take a completely honest look at how much you spend compared to how much money you have coming in.
- Food - Set aside funds to buy fresh fruits and vegetables, meats, and other food items to sustain your family. Don't forget to factor in the cost of pantry staples like grains, oils, and spices.
- Tools & Supplies - If you didn't include these in the homestead expense section, add any tools and supplies, such as gardening equipment, power tools, and building materials, that will allow you to maintain and improve your house.
- Maintenance - Set aside monthly money for general home maintenance costs such as repairs, cleaning supplies, fuel, etc.
- Emergency Funds - Building up an emergency fund is a crucial part of any household budget; make sure you have enough saved up in case of unexpected events or expenses.
Once you've listed all your current home and homestead expenses, it's time to look for ways to slash them.
Take a look at my post on how to save money to move off the grid for some inspiration.
And come back in March for my post on 25 Ways to Live Extremely Frugally on the Homestead.
Monthly Homestead Savings Budget
When you've completed listing all your expenses, record all your savings.
Include bank accounts and investments. Now, this isn't a post about how important it is to have long-term savings.
However, I do want to talk about why you really need an emergency fund if you're homesteading.
Emergency Fund for Homesteaders
I believe that everyone, homesteaders or not, needs an emergency fund.
Whether you call it a slush fund, your savings, or just a rainy day fund, homesteaders need emergency savings even more than regular folks.
After all, unexpected expense comes up.
Like a vet visit after your dog has a run-in with a wolf. And then another with a porcupine.
Or your tractor breaks down right before planting time.
And if you live in a very remote area, you could end up dealing with expensive property damage from bears. Or even vehicular damage from a moose.
Honestly, when you're a homesteading family, the list of situations that could require dipping into emergency funds goes on and on...
You might fall victim to sudden weather events or disasters. You'll need to buy items like tarps, generators, and other supplies.
Unexpected veterinary bills and medical supplies add up quickly when caring for livestock, horses, and other animals.
If there are unforeseen property damages due to flooding or fires, you may need additional funds to repair them.
Keeping up with utility costs like electricity and water can be expensive in remote areas. A homestead emergency fund can help keep them paid on time. Oh yeah, and if you have a generator or a truck, diesel prices can really fluctuate.
Equipment used on the homestead, such as tractors and plows, often require repairs that could come from your emergency savings fund.
What am I missing here? Comment below to let me know.
Implementing and Maintaining the Budget
Once you've created your budget, it's time to use it.
Reminder, you don't need expensive software or paid apps to start sticking to your budget.
And it doesn't matter if you just wrote it out on paper or if you're using the envelope system. The key is to stay under or at your budget amount for each expense.
If you're like most of us, this can be a struggle.
So track your spending. Every last penny. Having to record each time you buy a coffee or a candy bar at the gas station will make you think twice about spending.
As you get in the habit of tracking your spending, you'll see patterns. And then, you can adjust your behavior to avoid situations that could tempt you into spending more money.
Don't get discouraged. It can take a couple of months to really make the most of your homestead budget.
Any tips you'd like to add? Let me know in the comments!
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