Budgeting as a farmer?
I am a farmer from from Norway, and I have just started using YNAB today.
I need some tips on how to best budget in my situation.
I am a grain farmer.
So that means that I have large income and large expenses roughly 2 times a year. I know roughly when they will come, and I know roughly what these numbers are in a normal year, but of course they vary.
The rest of the year I have other known, but smaller expenses. Like tractor maintenance, building maintenance and so on.
I know ca. how large they normally are in a year, but not when they will come.
And then I have the normal month to month expenses like electricity, food and so on.
I am struggling how to best use YNAB for this situation, and I want to get a good start.
Hope someone can give me some tips?
I hope you are more successful than the American farmers I know. They do all this on credit. It's like what YNAB calls the credit card float, but over a whole year. Not a good idea. They buy the seed on credit, live on credit etc, then hope harvest time will pay off the bills. I'd not recommend that at all. Here's a starting place: https://www.youneedabudget.com/say-goodbye-to-crazytown-mastering-your-variable-income/Reply
Hello to another farmer! I'm not an official farmer, per say, but I work around farms a lot.
Figuring out what your average monthly spending is will be really helpful to you. If you've just started YNAB, then I'd encourage you to give it a couple months of tracking spending to figure out what your averages are, so you know how much you need to account for in various categories. Don't worry so much about budgeting your dollars are figuring out where you dollars are going when they're on the way out. Then you'll know how to plan for where your dollars need to go. I'd give it a solid 3 months, and really maybe even more than that since you have such highly fluctuating numbers over a long period of time. Honestly, for you, I'd say stick with it for a year, and don't worry about how "bad" your budget looks in the first year at various times. Once you get through a year cycle, then you'll really be able to know how to work it to your advantage. I've been using the system for about 3 years and I FINALLY feel like I've got a good handle on it.
Feel free to message me if you have questions. I'm not a YNAB official, but I totally understand your situation and am really good at putting together systems, and would be happy to help you figure out a way that works for you.Reply
After reading the book, I posted links on another thread that parallel the book sections: https://support.youneedabudget.com/t/k9wcwn/ynab-book
I'd recommend going over that content before diving into the software too much. The book took me two evenings after dinner to read, and the links are more condensed than the book content.Reply
Well, I`m at the planning phase of it now.
Been analyzing a great deal, and reading the articles and listening to the podcasts thats closest to my situation. And I think It`s been helpful.
As it stands now I`m currently planning to take the money I am paid now in February
(Grain I have had in the silos for better prices after new year + subsidies) and budget for most of the amounts I will need to buy everything I need to get through this growing season + seeds and fertilizer for next year.
(I already bought seeds and fertilizer for this season last fall)
This is because without money for that I can`t make more money next year without using credit instead.
So I treat those as immediate obligations. Also the prices are better in the fall than the spring.
Since this years harvest is still unknown, I dont know how much I will get paid when I sell whatever I can`t fit in the silos in the fall.(I.e Last year we had a draught)
That means I cant really rely on that money to be enough to pay the other half of seed and fertilizer if I instead had decided to split the bill evenly between February pay and September pay.
For the rest of the expenses related to the farming, I will split the yearly forcasted expenses in half between February pay and September pay. Those sums may or may not be needed anyway, and are easier to move money between after what comes into play.
And now I take what is left from February pay and budget for my part of the private fixed(bills) and true expenses(bills) until september. Whatever is left now I will have to budget towards groceries, savings and so on each month. And finally I am left with my own fun money(if there is any left...)
How does this sound?
Just to clarify a little; It might seem I have had no control over the farms finances up until now. And that is because it`s true. I took over the farm last summer after doing completely other stuff for the last 14 years. My father on the other hand has been doing this so long he just has a gut feeling about everything. That works fine for him, but this is my attempt at taking control and getting som oversight :)Reply