by Cynthia Brownell 1/3/2017
Happy New Year everyone! As we move into the next year plenty of people are trying to get their acts in order. Finances, fitness, and new year resolutions. If one of your life goals is to move off grid and start a homestead this year, maybe this article will help.
Five financial tips to help you move to your homesteading dream!
By Cynthia Brownell
Before we decided to move to the property, I read as much as I could about off grid living and money. Financing off grid living or not to finance off grid living. As much as I read I realized there were very different views and lifestyles. Some people felt comfortable living off the land and other people seemed to have a huge estate. We wanted something in the middle.
We have already been down the financing band wagon and our goal with moving to the property was to simplify our life. We were tired of our finances ruling our lives and forcing us to make decisions on where to live and work. We wanted to take control of our money not our finances controlling us.
Now if you know me, you realize I am not the savviest person with money. When I make the money, I like to spend it. I like spending my money on experiences. Road trips, vacations, and new places. That’s me. My husband on the other hand likes “stuff”. And not just any “stuff” good, high quality “stuff”. When we had the extra income, we did just that, spend!
Now that we are in recovery mode, every dime must be accounted for. When we made the decision to restructure the shed and turn it into a live-able cabin, we realized we had to get the money somewhere. We just couldn’t live in an uninsulated 12 ft. by 12 ft. shed. We scrimped and saved, took out a small retirement loan and completed the cabin with in a few months.
Phase one was completed. We were now living in an 18 ft. by 12 ft. insulated heated cabin. We lived in that space for the first year. Two adults, one teenager, and three pets. I don’t know who was more stressed at this point, the adults or the teenager. This past fall we completed the other half of the cabin, phase two. We now live in a two-bedroom heated cabin with a bathroom. Overall the completed renovation of the shed cost us about $8,000.00. We also saved money on labor because we did the work ourselves.
Back to the question: Do you need money to live off grid? For us, yes. We may be at phase two, but our “honey do list” is huge! Our next phase is paying off old debts and saving money for a tractor and small garage. Phase four is planning and building the house. Phase five, the barn and fields. And the list goes on. I can’t imagine not working and trying to live just off the land at this point. I don’t think we will ever get there and I am ok with that.
The following list is a guide we have been working on to put our finances in order. You may feel that we seem to have a lot of accounts open, but for us this works. Out of sight and out of easy access! You will find out what works for you, but please do not dismiss the power of planning and finances.
- Build a savings account that has enough money in it for your basic expenses for at least six months. Since my income is sporadic, sometimes it is easier to have the money set aside so that when it is time to pay a bill we aren’t scrambling. “Robbing Peter to pay Paul” so to speak. Start small if you have too. Just start!
- Set up a separate account for emergency expenses. It isn’t fun making the decision, “do we eat this week or buy a new battery for the truck?” For me out of sight and out of mind works best. My husband has a small amount per pay check going to this account. We have made it harder to access than our regular checking account so that when a “real” emergency occurs we have the money set aside.
- Budget and learn to live off one income. My husband has a salaried position. We have cut our expenses so that we can live with in his bi-weekly pay. When we first started this budget we had quite a few bumps in the road. If an emergency happens it would throw us off. Now that we have set up a separate emergency savings account, we can breathe a sigh of relief. The added benefit is when I do get paid, the extra income goes towards the emergency and saving accounts.
- Set up a septate savings account for taxes and insurance. Even though we have had a bad mortgage experiences before, we did learn one thing. Taxes and insurance do need to be paid! So, we have set up something like an escrow account in which we have calculated how much per month we need to set aside for the yearly tax and insurance bills. Once again, this account is set up separately so that we can’t access it on a whim. This payment is also taken out of my husband’s pay and is directly deposited. Out of sight out of mind until we need it.
- Build credit! When we went through our financial mess a few years ago, we did end up claiming bankruptcy. My husband has been slowly building up his credit. I checked my credit report not too long ago, and was surprised to find out that I didn’t have bad credit, I just didn’t have any credit. We are both in repair mode. Some banks offer secured credit cards in which you can place a minimum deposit. The idea is that you make purchases using the card, then pay the monthly payment and the key here is on time! The goal is to use this credit card to build positive credit history. My parents repaired their credit by financing a vacuum cleaner. You never know!
It has taken a lot of trial and error on our part to get ourselves out of our financial mess. But it does take time, some sacrifices and for me the ability to say no! No I can’t go out to lunch with the girls every Wednesday. Or no, we can’t afford the extra car at this point. Or no, Christmas is going to be small this year and we are going to scale back gifts for other family members. (This was a tough one for me because I love to give!).
In a nutshell, you do need money to live off grid and set up a homestead. Not a huge fortune, but enough to live comfortably and not worry about who is going to get paid next week and who isn’t. If an emergency occurs can you financially handle it? What if you get sick and lose additional income? These things are reality. It takes a while to be prepared, but I think it is the smartest way to approach homesteading. Start small if you have too, but at least start!
Resources to help:
- Credit Karma
- Gail Vaz-Oxlade’s blog and web site at gailvazoxlade.com. She has posted great articles and advice about getting your finances in order.