Unwinding Farm and Family Finances

Written By: Maria Pippidis & Jesse Ketterman

In 2020, a team of Cooperative Extension Family Finance Educators came together to discuss Farm Family Finances. We set out to determine what resources farm families need when managing personal finances. Our work began with conducting interviews with farmers and farm service providers.  

Farm families are unique for so many different reasons. Financial matters are a key area where there can be unique interplay between the needs, wants, resources, obligations and goals of both the farm enterprise and those of the family household.

This relationship is unique to farm audiences because it takes time, organization, communication and recordkeeping to ensure that the goals, wellbeing and success of family and farm enterprise are met.  

In some situations, farm income and resources may solely support the family and household while in others there may be off-farm income that brings in resources that support both. Alternatively, farming may be a part-time enterprise, and off-farm income is the main source of support for the family and household. There are some farm enterprises that generate income three months of the year which covers all farm and household expenses. Planning finances throughout the year is important. Coupling this with the unknown about how much may be coming in adds to the strain on managing finances.

Another example is when the farm pays for groceries because it can’t afford to pay wages for the family working on the farm. Each of these scenarios brings a connectedness between farm and household finances and the choices made about how resources are used to support the household expenses over time. 

Another unique aspect of a farm family household is the sharing of some of the assets and resources. Knowing who is paying for what is key to setting financial boundaries. For example, household electric and the farm truck may be used for the household chores; all paid out of the farm budget. Alternatively, the off-farm income may help pay some of the farm bills or debts during the time of year when there is little farm income. Tracking and knowing how money flows is critical to the success of the farm enterprise and the family finances. 

Some farm families combine all sources of income into one checking account for ease of managing bill payment and other obligations. However, there are benefits to keeping household and farm income and expenses separate by establishing a farm business plan and recordkeeping system that parallels a system for the household finances.  Aside from aiding in recordkeeping for tax purposes by making it easier when paying taxes, one will have more clarity on your business finances, overall business management and cash flow. 

In 2023 we partnered with the Consumer Financial Protection Bureau which led to additional interviews and the opportunity to modify the Your Money Your Goals Toolkit for the farm family. That brings us to today. We are putting the final touches on the modified document and plan to lead some focus groups in the coming months to get feedback on the revised toolkit. Some items developed specifically for the farm audience include a Yearly Financial Planning Chart and Who’s Paying for What (farm or family). Other tools were adapted for this audience such as adding columns for on-farm and off-farm income and narrative in the modules speaking to the farm family audience.

The overarching goal is to have a toolkit available for farm families to address the challenges associated with family finances. 

For more information about the initiative, contact one of our team members:

• Laura Hendrix 
• Jesse Ketterman 
• Elizabeth Kiss 
• Lorna Saboe-Wounded Head 
• Maria Pippidis 
• Catherine Sorenson 
• Kayla Wells-Moses