How to Financially Prepare for Homesteading Success
Lately the idea of homesteading has become more and more mainstream. If you follow me on Instagram you may already be aware of the homesteading journey our family started a couple years ago.
For anyone interested in this undertaking there are a lot of resources. But most of them focus on the daily tasks of homesteading: gardening, raising livestock, canning and preserving, etc. While I have knowledge of some of these things, my experience running a financial planning business equips me to contribute to the growing catalogue of resources in educating you on how to financially plan for your homestead—through the establishment, growth, and maintenance phases.
Why Homesteading?
Before even considering the financial requirements of homesteading, you should weigh the positives and negatives of this lifestyle.
Over the last few years, I’ve somewhat stumbled into this way of life—and it’s given me more meaning and purpose as my family grows in skills and self-sufficiency—a very important component of financial freedom.
We’ve learned how to grow and preserve food, how to raise chickens, and the infrastructure that comes with starting, expanding, and maintaining a very small homestead. We’ve met our local farm community and have a much better understanding of the food supply chain and why we want to part ways with traditional food sourcing.
But we’ve only just begun and we have had our share of anxieties and tragedies.
My husband and I are still learning how to work together effectively. Like any marriage, this can be challenging and adding in the load of growing your own food and having livestock can compound it—especially when disaster strikes during our harsh winters.
We lost two of our chickens to a fox earlier this spring, and it was devastating.
Our chicken coop has had infinite needed repairs and maintenance, and in fact we will need to build a more sturdy one for our winters next spring. Infrastructure is constantly needing to be maintained or replaced.
There is a never-ending list of things to do. As I write this I am dehydrating some of our tomatoes and boiling crushed tomatoes for canning. Once I’m done for the day with running my business, I will need to get out to the garden and do some harvesting, even if I just want to sit down and relax.
I say all of this only to be honest about the work it takes. Much of the homestead social media sphere highlights the joys and fulfillment—but the true joy only comes because of the difficulties and discipline along the way.
How to Financially Prepare for Homesteading Success
If you are in the beginning stages of considering this lifestyle, I have one major piece of financial advice.
The key to long-term success is to reduce your dependency on external income.
This is not something you need to do immediately or prior to starting a homesteading journey. But you must make this a priority throughout all stages of your homestead.
Beginning this process requires a two-prong approach:
Reduce your expenses—particularly food expenses, and;
Earn your income from home-based employment—ideally self-employment.
Reduced Discretionary Expenses
Many of your prior discretionary expenses will decrease naturally and possibly allow you to save more money (which will ultimately help you on your long-term financial freedom path). Discretionary expenses you will see reduced, if not substantially:
Food costs—you will be eating healthier and for a lot less! This happens naturally as you grow and preserve some of your own food. Another way that will drastically help your overall food costs is to find local butchers and farmers who can sell you meat in bulk (assuming you have the storage space; we have extra freezer space in our garage).
Entertainment—I’m going to be real with you, taking on gardening, livestock, food preservation, and homestead maintenance is going to eat up a lot of your time. Rarely will you be out at happy hour, restaurants, and movies. (And if this lifestyle is for you, you won’t miss those things.)
Travel—like entertainment, it will no longer be as easy as boarding your dog or cat if you want to travel. You will have a piece of land (no matter how big or small) that needs active management, particularly in the spring through fall months.
Upstart & Growth Expenses
You may need to reduce your discretionary expenses not only to reduce your reliance on external income, but also for upstart expenses to establish and grow your homestead. Let me be clear—Homesteading is not the FIRE (Financial Independence, Retire Early) movement. You may—at least initially—see a reduction in expenses, but there are real financial outlays that will be required as you build and grow your homestead. Here are some early-on expenses you will want to think about:
Gardening tools/landscape/architecture – You will need all the inputs (beds/raised beds, fenced areas, healthy soil, compost, seeds, etc.) required to make growing some of your own food possible. Before you begin anything, make a plan and estimate the cost. Remember, you can (and should) always build in phases, starting small and learning before you invest a lot of capital.
Livestock buildings, food, and possibly veterinary care—If you plan on having livestock, this will require a lot more in expenses than you may anticipate. I really caution you to start small and build as you are learning about how to care for livestock. Chickens are one of the easiest animals to start with—they are accessible and not terribly expensive.
As you grow you will incur other costs and those will be entirely dependent on how much you want to expand your homestead.
Home-Based Employment
Ideally, you will be able to make a plan to “work from home” either through a traditional job that is remote, or through self-employment. For me, I’ve been able to transition a successful financial planning business—which was already online—into helping sustain our way of life. This gives me the freedom to manage my time.
Being on the homestead throughout the day helps in countless ways.
First, you reduce any commuting time that traditional employment requires. Even a 10-minute one-way commute is 20 minutes daily, and 20 minutes is enough time for me to care for the chickens in the morning.
Second, it enables you to more effectively manage your tasks and/or possibly multitask. For instance, in the summer, I want to harvest and work in the garden in the morning, before it gets too hot, so I schedule time to do that before I have any client meetings. If you work from home you have more control over how you order your tasks so they are done as efficiently as possible.
Finally, depending on your livestock and other aspects of your homestead, you may want to be home for emergencies. Last winter the floor of our coop collapsed due to moisture from the snow; since I was home, I was able to immediately relocate the chickens to a warmer structure temporarily while we made the repairs.
A Note On Using Your Homestead for Income
There is a potential to use your homestead to generate revenue. I know a number of other homesteaders (further along than us) who have large social media followings and sell books and other resources for people who need education on how to proceed. Some of them have rental property on the homestead or offer in-person trainings on various aspects of homesteading. BUT, do not rely on this. Nobody should be going into homesteading as a money-making scheme. It’s a lifestyle that will need nurturing and investment—not an investment portfolio.
Homesteading Is An Expression of Self-Sufficiency, A Component of Financial Freedom
Achieving personal freedom motivates much of my life’s decisions. While I was a city dweller my perspective was limited to freedom only in a financial portfolio sense. True financial freedom underpins all the other freedoms you want to achieve in your life. But it’s not that simple. As I’ve been learning, freedom—to me—also includes the ability to self-sustain as many aspects of my life as reasonably possible. It means actively producing and controlling the food my family consumes. It means building and caring for our land and the creatures on it in a productive and sustainable way.
And just like with financial success, homesteading requires taking small steps to learn each day what you need to do. It means failing and making the wrong decision only so you can eventually learn the right one.
If you’ve thought about pursuing this lifestyle, start small, and most importantly, make sure you factor in the financial investment it will require as you learn more skills and want to expand.
P.S. If you’re interested in getting chickens, tune in to my live, Friday, 9/29 where I will talk about the Finances of Raising Backyard Chickens.