What are the major production expenses and loan payments in your farming operation? What are the major sources of cash income in your farming operation?īy combining your expected yields and livestock production with your best estimate of possible selling prices you can project cash inflows or income. You can estimate how much short-term borrowing will be needed during periods of little or no income, and when operating loans can be repaid. Mapping cash income and cash expenditures for the coming year helps you plan ahead. Have you made out a cash flow budget for this year? Have you ever made a cash flow budget for your farm? There are no automatic retirement plans that are funded each month.Many items, such as vehicles, office equipment, machinery, and travel expenses, can be at least partially tax deductible even if they are also used for family purposes. Controlling family expenditures may be difficult when a farm couple is accustomed to spending large sums for farm inputs. Household expenses are small compared to farm expenses.Deciding whether to reinvest profits in the farm business or to make expenditures on the home or family is a difficult matter for young farm couples. Farm and home compete for surplus cash.There are usually no employers to pick up part of the cost of employee insurance plans, and individual coverage usually costs more. Insurance and health costs may be higher.Home gardens and homegrown meat and produce can trim grocery bills. Food expenditures may be lower than for non-farm families.For many farmers a large portion of their housing costs is included in the farm rent or mortgage payment. Prices and costs can vary widely from projected levels. Except for some enterprises like dairy production, farm income fluctuates widely and is often received in a few large amounts during the year. Although living standards on the farm have become more and more comparable to those of non-farm families, there are some important differences in managing farm family finances. Farm income can be both irregular and unpredictable. Computing benefits from adding additional off-farm work Managing Farm Family Financesĭo you find it difficult to know how much to spend each month for family living needs? Many farm families do.
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