We believe investing in your homestead is investing in your future. We chose to change our lifestyle, leave the suburbs, downsize our home and belongings, reduce our work hours, and devote more time to family, home, and creating a productive homestead. Our biggest worry? Can we afford it. Here is our story of starting a homestead and financing our homestead.
I realize we all have different priorities and resources available to us. This is just one example of starting a homestead and managing finances. We are always re-evaluating and adjusting our priorities and I believe remaining flexible and continuing to learn is the best way forward. I am not a financial professional, and I offer our story and links to others for ideas and inspiration only.
Downsizing and Reducing Our Expenses
One of our primary goals in moving from the suburbs was to cut our expenses. Although we lived within our means in northern Virginia, it was very expensive. For years Carl was stuck in a stressful and unhealthy employment situation, but one that provided well for our family. The townhouse we lived in was in a modest neighborhood, but property taxes and neighborhood HOA fees were expensive. And their strict rules made homesteading on our tiny lot difficult (no compost, no animals, no food plants in the front, etc.)
Today we live in a rural community on 2.5 acres of land. We pay an annual road maintenance fee, which covers the cost of snow plowing the 3/4 mile private community road from our house to the state maintained road, plus general road maintenance. Our mortgage is significantly reduced, allowing us to pay extra toward the principle each month with the goal of becoming mortgage-free.
Our monthly grocery amount is embarrassing I admit, but this represents plenty of organic whole foods, and local organic grass-fed meats, for a family of five (including two teenagers). Quality food is a priority and as we increase what we produce ourselves, refine our processes for growing, harvesting, and storing, as well as learning to increase our growing season, we are seeing our food costs decline.
|Previous Expenses:||Current Expenses:|
|Home: 2,200 square feet||1,500 square feet|
|Annual Taxes: $3,200||Annual Taxes: $2,200|
|HOA Annual Fees: $1200||HOA Annual Fees: $300 (road maintenance fee)|
|Monthly Mortgage: $1500||Monthly Mortgage: $870|
|Monthly Grocery: $900 – $1,000||Monthly Grocery: $600 – $700|
When we lived in the suburbs, we required more money for a higher cost of living. Like most people, we were tied to jobs based on salary and benefits. Now we are able to reduce time earning money at our jobs to spend more time focused on producing our food, managing our home, and enjoying time with family.
I cannot emphasize enough how important it is for you to track your spending if you want to live within your means. Once you know how much you are spending, you can create a plan, make changes, and take control of your finances. Many years ago we started making nearly all of our purchases on our debit cards. Each month I would print our bank statements and decide what category each purchase belonged to – food, clothing, entertainment, etc. I kept records and determined our spending habits.
What we learned was eye-opening. And we began making changes. We decreased our consumption habits, decreased our spending, and increased our savings. We made the decision to only buy used vehicles and so had no car payments, and we were fortunate in that neither of us had a habit of using credit cards and carried no debt other than our mortgage.
While we have come a long way, we still have a lot of room for improvement. My goal is to find the best balance for us – living frugally, but without feeling deprived. Living in this American society poses a challenge as we are constantly bombarded with advertising, promoting a level of insecurity and wanting.
My goal is to live a contented life.
When we left the suburbs to downsize our life, we made some choices that go against conventional advice. We left behind Carl’s ability to collect federal employee wages and benefits, and his federal retirement was only 9 years away. But a lot could happen in 9 years, and we questioned the conventional wisdom of “hanging in there”. Did we really want to sacrifice health and happiness (Carl was already experiencing stress-related health problems) for another decade of our lives? And did I want my children to believe one had to suffer through life, just to ‘get by’?
So, against advice, we packed up our belongings, put our house on the market, and moved.
We cashed in part of Carl’s retirement investments, despite the penalties and taxes. But we feel we are investing that money in a different way. Our goal was to buy a modest home and land with a small mortgage we could pay off quickly. By eliminating our mortgage, we will have more freedom. By investing in infrastructure to produce more of our food, we are increasing our security and decreasing the second largest part of our budget.
As Shannon Hayes, author of Radical Homemakers says:
“ We have a lovely home, we eat well, we have lots of fun, we’re warm, and we don’t worry about how we’ll keep the lights on. For me, that should be the goal when investing money. Our culture typically instructs us to think of investing in terms of generating interest, so that we’ll have more money, so that we can invest more money, and eventually have a higher income as a result. It assumes a continual growth of the economy. Bob and I believe that to expect that our economy can (or should) be in a state of continual growth is an impossible and unsustainable notion.”
For those who consider the earth’s resources to be finite, and regard the well-being of the majority of the world’s populations and their well-being as valuable, depending on the never-ending expansion of our economy is not a virtuous or compassionate option.
Shannon goes on to describe her family’s approach to investing:
“When we have enough money to invest, we want to use it in a way that, rather than make more money, will directly enable us to enjoy a good quality of life in perpetuity – no matter what happens in the mainstream economy; no matter what weather extremes we may face; and no matter what our annual income happens to be in any given year.”
And this is where my family and I are today, investing. But not in the traditional sense. We are investing in homestead infrastructure – building gardens, animal housing, fencing. Making changes to our home to allow for more frugal choices – repairing our chimney so we can heat with the wood stove, researching solar options for heating our hot water, and creating an edible landscape with fruit and nut trees, berries, and perennial medicinal herbs.
One of the greatest measures of wealth is the freedom to decide for oneself what makes sense. ~Ben Hewitt
What we are doing feels right for us even if it goes what we have been told is the “smart thing to do.”
Questions for you:
Do you have a budget?
What about financial goals?
For More Inspiration:
Here are the Five Steps we used to Finance Our Homestead
Tracy at Our Simple Homestead offers an honest review of the finances of starting her homestead.
Amy at Tenth Acre Farm shares 7 Ways to Start a Homestead (Without Being Overwhelmed)
Not everyone is able or wants to move to the country to homestead. Kendra at New Life on a Homestead encourages us with ways to Homestead Where You Are.