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Your Homestead budget

Your Homestead budget

by HomesteadWorld
in Uncategorized

Money is one of the most important things to consider on the Homestead. And budgeting is how you manage money. If you don’t have a budget you might as well throw your money into the wind; that’s often where it goes when you don’t manage it.

A good, well planned budget will direct where your money goes and will take control over your money for you. You decide what’s in the budget and let your budget go to work for you. If your budget says you can spend money on something, then you can. If your budget says you can’t spend money on something, you can’t.

Planning your budget means you get to think about everything you’re going to spend money on, what you’d like to spend money on, and it will even allow you to have an unforeseen emergency; everything is planned.

One of the most concerning topics around a Homestead is money. It doesn’t matter if it’s a little or a lot of money, it’s a common topic of concern. That’s why you can’t ever ignore it. You have to take control over money and the way to do that is to have a budget. The way to make a budget is to plan it.

How to plan your budget

Flexible Expenses

This is the list of all expenses that are generally short-term commitments and flexible in their amount. Initially, try to get a handle on where you are spending your money right now. Once you have that written down and can get the picture of how your income is being used, you can begin to make adjustments based upon your goals. So, be realistic and honest in this step! I will write more about how to cut some of these costs down in the next section, but for now get a handle on your spending. You will be able to make better decisions if you plan spending ahead of time, together with your spouse. Remember that accountability is very helpful!

During a month, try to keep track of the normal expenses within this category. However, it may be that you only make a sizable purchase to restock your reloading supplies or soap making supplies or other prepping materials, which can often be obtain at greater discount when purchased in larger bulk. Do your best to figure out what is a realistic amount you need to spend over the course of the year for these items that you only buy once or twice a year and then divide the cost into months, so you can properly determine how much of your monthly income should be set aside for those future expenses.

For gifts, list the people you buy gifts for each year and about how much you spend for each person and then total it up and divide by 12. Apply these same steps to other categories to obtain monthly estimates for each category of flexible expense. These categories (in no particular order) include:

  • Gasoline. Remember to include extraordinary use, like car trip vacations that might be taken in the summer or at holidays to see family and friends.
  • Transportation/toll.
  • Vehicle repairs and maintenance. Include tires as well as oil changes and repairs. Repairs are hard to estimate in advance, but set some money aside especially if you have older vehicle(s). More will be needed if you require a garage to do the work rather than you just buying the parts and making repairs yourself. For a seven year old truck, you are probably spending (or needing to save for future expenses) $100-200/month. If you live in town or the city and must transfer clients in your vehicle where you require a full service car wash/detail every week, then you may be adding another $40-150 per month, depending upon the services required and your location. Edmunds provides a resource to estimate the total cost of ownership of vehicles since 2010. Part of the information available on this website is estimated repairs and maintenance for various makes and models over the course of the first five years of ownership. If you have a newer model vehicle that you recently purchased, you could use this to estimate your repairs and maintenance. There are other sites as well to help find average costs.
  • Clothing. Include purchases of everyday street clothing, work clothes, hunting/survival/tactical clothing, vacation clothing, church clothes, shoes/boots, coats, gloves, hats, jackets, hunting/camo gear, swimsuits, and anything you and your family wear on your body throughout the year– winter, spring, summer, and fall. (I do list fine gold and silver jewelry separately, because it has the potential to be used for barter or trade as something of high value rather than merely a functional item, like clothing.)
  • Laundry/dry cleaning.
  • Children’s toys.
  • Entertainment/books.
  • Memberships.
  • Home school/continuing education.
  • Prescriptions.
  • Dining out. A lot of people do not realize how much they spend in this category. Keep receipts and add them up for a full month. Include breakfast, lunches, and dinners as well as those quick runs to the mini-mart/dollar store for frozen dinners, candy bars, ice cream, chips, and soda, too! Those are conveniences usually purchased at premium prices. Either place them in this category or in groceries, but do not exclude them.
  • Groceries/cleaning supplies. Keep your receipts for an entire months and total it up. Don’t modify your purchases yet.
  • Livestock/pet care/veterinarian services. Your expenses for medicines, neutering/castration, injuries/illnesses, basic first aid supplies, as well as securing their area (fencing, kennel, or cage), feeders, watering supplies, hygiene, feed/seed, vitamins, and toys, and anything else specific for your animal(s).
  • Household maintenance. Whew! Our homes need lots of TLC, don’t they? This is especially true of the older homes, but it is true of even the brand new homes. At a minimum there is the A/C and heating maintenance, light bulb replacement, battery replacement in fire and carbon monoxide detectors, but there are plumbing issues, electrical issues, and simple little functional things that need attention, like drawer sliders, door knobs, and key locks. It is conservative to say that a person should budget $100/month for household supplies, especially if you have a home that is not “newish”, and if you must hire help for even minor repairs then I recommend that you budget more. Take a look at what you have spent in the last year, if you have receipts. Some of the stores, like Home Depot, let you email your receipts to yourself and then you can electronically keep track of expenses over time, but it is best to keep paper copies in case we lose our electronics.
  • Yard/land maintenance. Do you have to mow the lawn and/or maintain a lawnmower, weed eater, hedger, edger, and/or chain saw? Is a tractor, hay baler, trailer, and/or other heavy machinery required to maintain your property? The cost of any of these items and their fuel and oil should be included in this category along with anything else required, including plants, seeds, chemicals/sprays, gates, gravel, et cetera. If you have a tractor loan, include it here, unless you want to set up a “ranch” or “farm” expense category because it is a significant separate category from the house yard.
  • Vacations. How much have you spent in the past year on trips, including weekend getaways? Do you have plans to do something extraordinary or different in the future? Consider the fluctuations in gas prices and airline tickets when projecting costs going forward.
  • Gifts. As stated earlier in the introduction, think about the holidays during which you give gifts and the list of people to whom you give gifts. Estimate the amount you give to each person throughout the year and then divide by 12 to arrive at a monthly expense. Most of it may be utilized in the months of November and December (the biggest shopping time of the year) or at some other time of year, but you will need to set money aside each money prior to these months in order to have enough when it comes time to do the shopping, so we need a monthly amount to withhold from our monthly income for gift-giving. Also, remember that you will likely have a few surprise gifts or invitations extended beyond what you know about now, so add a little extra. Try to be realistic with this budget, based on what you have done in the past and then add just a little for the “unknowns” or “forgotten gifts”. If you have used your credit cards, you may be able to go back through your receipts or history and get a good idea, particularly around the times of year that you celebrate holidays/birthdays.
  • Reloading, ammo, gun maintenance, and cleaning supplies.
  • Hobbies.
  • Religious education/conferences.
  • Larder. Include in this what you have bought beyond “groceries” for your larder. If you have purchased buckets of freeze-dried foods that you don’t normally use in your food supply, the expense of these buckets would certainly fit in here. Anything that is above and beyond what you utilize during the month and that can be stored long term should go here. It may be difficult to tell which category some things should go into (groceries or larder), but don’t worry too much about that. The main thing is to get every expense into a reasonable category. Just make the best judgment you can. If you want to combine these two, as I do, go right ahead. Going forward, it just may help if you are only beginning to build your larder and getting started with prepping to separate an amount toward buying some things that you don’t use normally, like freeze-dried items, to help you get disciplined in doing so. In spite of some who ridicule the idea, our family does eat what we store and store what we eat. We eat some wild things also, including some early spring-time dandelions in our salads and so forth, and we always eat whole grains so that our bodies will be well adjusted to the stored grains. We’ve found we prefer their taste and the health benefits, so it is now a way of life for the Latimer family, and the “larder” is simply our larger pantry with an intermediate and small pantry, too. You have to figure out what works for your family and how you make purchases. Look at receipts and begin by looking at what you are buying now.
  • Jewelry/precious metals.
  • Cash.
  • (others categories specific to you and your family.)

Take a Good Look at Your Budget

Now that you have everything written down, take a good look at where your money is currently going. Is there money left over every month, or are you going into debt each month? Ask yourself, “Am I spending my (our) hard-earned income in ways that support my (our) life goals?” Is this how God has directed you to utilize the resources He has enabled you to have? If not, you need to think about making some changes, possibly some significant ones.

~ A very good starting point to planning a budget written by Sarah Latimer and published by our friends at SurvivalBlog where you can read more in detail.

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