Most homesteaders aren’t looking to make a fortune from their land and you are far more likely to want a self-sufficient lifestyle that doesn’t require a big budget. As true as this may be, and as well as you can do without money, there will always be a few ways that money will be important on your homestead. For this reason, planning your homestead finances is very important.
While you should continue to aim for your dreams, you also need to be practical about what homesteading really entails. Being realistic about what financial challenges may come your way and make a plan for them.
Planning Your Homestead Finances
Funding Your Start-Up
Homesteading might be about escaping the 9-5 for you. But, like any business, you will still need enough funds to buy a decent plot of land and a house. Think about the amount of land you can feasibly manage yourself or with your family and don’t be tempted to buy a lot of acres you won’t use. Similarly, do think about the location of your homestead. If you are coming from the city, a remote plot might seem romantic, but being nearer to town has its perks too.
When you create your plan for your first year, remember that when you are starting out, everything from seeds to animal feed to the animals themselves will need to be bought. This means that, ideally, you will have enough in savings to cover these initial costs. And then reach profitability at some point in your second year.
The Hidden Costs of Starting Up
As well as the cost of buying the land, animals, and plants, there are also your living costs to consider. Until you are completely self-sufficient and producing your own energy and water supplies, you will still need some income to pay your bills. Selling your produce will certainly bring some money in, but you need to remember that when you are just starting out, it will take time before you are fully up and running.
You also need to think about getting the right type of insurance to cover your homestead. As your land is both your home and your business, it is worth investigating which types of insurance will provide the most coverage without you paying twice as much for the same thing. Talk with an insurance agency to see what coverage is best for your situation and shop around.
Another area you may consider when planning your homestead financials is having a small emergency fund. Have a small amount of money set aside for those sudden debts that appear when you start homesteading. Money to fix a leaky valve or broken water line can be helpful.
Set Realistic Goals
Homesteading is of the land and therefore controlled by the weather and the weather alone. This is important to remember as it means that one year you could achieve a bumper harvest. The next you barely have anything to sell. With this in mind, you need to set a realistic goal for how quickly you can start profiting from your business. Or at least start considering how you will make ends meet.
But your goals shouldn’t just be about making money. You also need to think about how you plan to use your land, which animals you would most like to raise and which crops you would like to try. As a homesteader, you aren’t just thinking about what will sell. You are also thinking about what will bring you the most joy living off the land.
As the seasons affect the way you live, so too will they affect the way that you treat money – when it comes in and when it goes out. Rather than living month to month as you would on a salary, you will need to learn to make hay when the sun shines and have savings ready for the winter months.
A Final Note About Homestead Finances
Planning for your homestead finances can be difficult and does require some planning on your part. Think about the hidden costs involved before you start homesteading. Make a solid plan to allow for an income on your homestead. Lastly, set yourself realistic and achievable goals.
By making a solid plan, you can keep your homestead financials on track.
Do you have a plan in place to meet your homestead finances head on and successfully? Tell me about your plans in the comment box below.