Tuesday, February 20, 2018

Insurance...The Poor Farm Budget 2018

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Moving on with our annual financial budget, I'll share with you how we manage insurance costs. In this category we include auto, home and life insurance. In 2017 we also included health insurance because one of us had it, but in 2018 it will be absent because neither of us is covered. But before I hit that hot topic, I'll discuss the more mundane insurances.

Auto insurance. It is required by our state law but we carry only the minimum on our vehicles, liability. It costs us $32.67/month for both vehicles: a 2002 Ford F-150 and a 2000 Dodge neon.  So if one of our cats lights up in my car and the whole thing goes up in flames...we're out of luck. And that cat has lost another life I imagine. 

Home Insurance. Also fairly simple. We wouldn't even have it if it wasn't required by our mortgage lender, but it is, so we do. Cost is $43.08 per month. This was the best price we could find and the company we use has insured our home for twice the present appraisal value because that amount was their minimum. It also covers personal belongings and the outbuildings.

Life insurance.  We each have a term policy payable upon death. We've had the same policies for years and we are rewarded for such loyalty with a steady increase in premiums as we age. I would've preferred a free toaster. Oh insurance, how thou vexes me. We have a combined coverage of $400,000 and it costs us $739 every 6 months or $1480/yr.

We no longer have minor children at home, the most minor one being twenty seven , but we want the surviving spouse to have a nice cushion to live out their days and the ability to stay on this property until their own death. And although we personally do not believe it is a parents duty to leave an inheritance to their children, it would be nice if we could leave enough for them to have a nice weekend away. Certainly, if we still have a mortgage we want our offspring to be able to pay it off.

So, how did our projections compare to actual costs? For 2017 we budgeted $155/month for auto, home and life insurance. Actual spent was $202/month. Not too far off. The additional $47 month was due to the increase in our life insurance premiums we forgot to budget for. For 2018 we've budgeted $220/month. Looking at our projected life insurance costs, we're not expecting a big jump until I turn 60 in 2019.

Now, health insurance. Last year from Jan-Nov. 2017 Keith was covered by his employer at no cost to him. I also could've gotten coverage through his employer but the cost was way out of our budget as Keith's income would've been reduced by 30%. So we said, No Thanks. In Nov. 2017 his employer announced that employees would have to pay a portion of their health insurance. Again, this would've dropped Keith's take home pay by about 20% and we said No Thanks again.

Thus, neither of us has health insurance. because Keith's employer technically offers it to both of us, neither of us qualify for any of Obama's Health Care Plans. We fall between all the cracks . We have handled this by working harder every year to get healthier. We do not take any prescription drugs, handling any aches or pains with holistic or herbal treatments. We do not regularly see physicians. We don't even see them irregularly. We are eating better than we have in decades by avoiding many processed foods and growing as much of our own food as possible. We remain active.

But we are both very aware that a semi-truck could run through us at the corner tomorrow morning, that our hearts might decide a serious arrhythmia would be entertaining, that a bulging aneurysm is lurking in our brains, that cancer could be looming within a pancreas waiting to jump out and yell BOO!

C'est la vie.

Like our dear blog friends Leigh and Dan at Five Acres & a Dream, have recently experienced, accidents can happen anytime, especially for those who do so much hands on work required on homesteads. Like Dan, Keith badly cut his finger using a saw two summers ago. Fortunately his injury was not as serious as Dan's and the total bill was less than $1000. We paid it over time to OSF Saint James Hospital whose mission is to recognize the  Personal worth and dignity of every person we serve regardless of race, color, religion and ability to pay. They were more than willing to set up a payment plan with us. We are blessed to have such a facility in our community. 

It is with these events that you learn to rely on family and friends, and you pay off the medical bills as you can, when you can. Health insurance never guarantees your safety, and none of us gets out of this life thing alive anyway.

Saturday, February 17, 2018

Food...The Poor Farm Budget 2018

Image result for funny picture of julia child

"Never eat more than you can lift."     -Miss Piggy

"I always cook with wine. Sometimes I even add it to the food."     -W.C. Fields

"Red meat and gin."     - Julia Child  (When asked what attributed to her longevity)

Food. It rocks my world. I spend a huge hunk of my time in our looney bin kitchen every day, cooking at least two meals a day and often three. The majority is made from scratch. The bread, the cakes, the stews, the roasts, the mayonnaise, the pancakes, the salads. I'm not a martyr, I just play one on TV.

I'd say with prep time and dishes and putting away dishes and getting the dishes out again-I spend about 3-4 hours at counter side every day.

You would think with all that time around food we would've had a better handle on our food budget. Wrong. So very wrong. We budgeted $150/month and we spent (prepare yourselves) on average $408/month. I know. *GASP*

After the shock of adding it all up wore off a bit, I did some digging and revealed some valid excuses for this gross miscalculation. When we came up with the original $150/month we were-in our little bitty brains-thinking only of edible food purchased in a grocery store. What we did not include, but dumped expense wise into this category, was the following:

Meat processing costs of $1370/year for beef and pork. (Except for fish, we raise all our meat.)
Broiler chicks purchase. (When grown we butchered 30 for our freezer)
Garden seeds and plants
Household items like toilet paper, bath & laundry soap making supplies

If I were to separate those items out, and I've decided I won't, we'd be closer to the $150 we budgeted except for the eating out we did. We blame family for that. Hey, if the scapegoat fits...

We'll do  well for a few weeks and then a mother-in-law needs a doctor visit, so we'll take her out on the way home for a meal. Or my sisters and I will gather and it's often at a restaurant and includes a meal. Or, I'll be missing a teen granddaughter and will bribe them to spend a bit of time with me with a meal out. (THIS is worth every penny, they are growing up too fast.) And of course Keith and I still like the occasional Sunday eve. meal out where I get a break from cooking and he gets a break from me whining about all the cooking.

Here's what we are doing for 2018. We raised the food budget to $300/month to account for all the items listed above except the eating out part. That's just weakness on our parts. We decided to invite grandkids on nature walks where we bring homemade snacks with us. (It's worth a shot. We may still have to bribe them with DQ ice cream). I'm going to eat before I meet with my sisters and have just coffee when we get together for gab fests. We're all on diet number 999 this spring anyway, and we're going to invite the mother-in-laws over more often to eat here with us.

But, Keith and I will still have the occasional Sunday meal out to give me a break from cooking and him a break from me complaining about the cooking. 

We're not saints you know.

Thursday, February 15, 2018

Automotive...The Poor Farm Budget 2018

Image result for picture of john candy in planes trains and automobiles

Trains, planes and automobiles. A fabulous movie, if you like John Candy and Steve Martin and I do. But for Poor Farm blog purposes we'll just be talking about automobiles.

Our budget for 2017 in this area was $400/month or $4800/yr. Actual spent was $535.33 per month average for a total of $6432.91/year. Over budget by $135.33 per month.

What happened? Old vehicles happened. Keith's truck, an F-150 2002 Ford has 228,000 miles on it. My little 2000 Dodge Neon has 229,000 miles.  As stated on Auto Blog , American cars are aging almost as fast as we baby boomers are. The average age of a car on the road is now 11.5 years. In 2009, this number was lower, at 9.4 years.

Our vehicles are 16 and 18 years old, as elderly as our oldest grandchild. This past year they both required some repairs. Of the total $6432.91,  $2028.96 was spent on repairs alone such as new brakes and radiator for my car, new wheel bearings, manifold, spark plugs and other engine issues on the truck. This equates to $84.54 per vehicle per month for repairs.

Thus the remaining $4403.95 was gas, license and registration expenses** for both vehicles or about $183 per month per vehicle. Since it costs so much more for Keith to fill his truck, about $50, vs my car at around $25 and because the mileage is not so great on the truck, Keith does drive the car to work ( 24 miles round trip) whenever weather allows. My little car does not do so well in snow drifts.

Even with our expenses being over budget, when compared to the cost of newer vehicles, we feel we're doing ok nursing along the two geriatric modes of transportation. In the US today the average car payment is $503 a month, the average car loan is 68 months and the average auto loan is $30,000. When compared to our repair costs of $84/month/vehicle, it appears having a new or newer vehicle is not yet validated.

But, we are realists, and we understand more repairs are likely, so here is our plan for 2018. We've increased our auto monthly budget to $550/month which includes all fuel, registrations and repairs. In addition we are planning for life with just one vehicle. If the truck breaks down to the point that it makes more sense  to purchase a newer used one, we'll purchase one and we'll hang on to the car until it does the same. But, if the car crashes first, we'll get by with just one vehicle, the truck.

A truck is truly essential here, for transporting hay and grain, for hauling home barn building materials, and for taking animals to the locker for butchering.

How about you? Car or truck? New or old? Tips on how we can save even more in this area?

** Car insurance is not covered in these numbers as we budget and account for it along with home, and life insurance. This is a separate category for our budgeting purposes. I'll blog about it soon in this series.


Saturday, February 10, 2018

Income....The Poor Farm Budget 2018

The Poor Farm's Phone Booth
My father's old shop stool holds up my aunt Bernies 1960's phone

As promised, I'm going to share our Poor Farm finances as I did last year about this time. Those posts start HERE if you weren't a blog follower then, or just want a refresher. I mentioned then and I'll mention it again  now, homesteaders, small farmers, and those just trying to live on a budget can benefit each other by sharing some of this financial info. Specifics like health insurance for those who work at home, getting by with decade(s) old vehicles and building your own outdoor buildings with recycled materials or new materials bought with cash only, are struggles we can soften through information sharing.

We Americans are quite weird that way though. We have no problem bragging about how much we make, how many things we own, how expensive our vehicles are, how many vacations we can afford, but we are shy about sharing how to survive on LESS. How often do you hear a person say with pride, "I get by on a low five figure income"? Frugality is frowned upon rather than applauded or at least accepted.

I find this sad as we were once a nation that prided itself, especially during depression times, on getting by with very little through self sacrifice ( a dirty phrase during these "entitlement" times) and sharing of resources. During the war effort of the 1940's, rationing and recycling was the norm.  Often this past year, when I've spoken to others about our goal to survive on less and less income, paying less and less taxes, I get quizzical looks at best and out right sneering at worst.

Enough rambling. Let's talk Poor Farm Income

Last year, based on projected expenses, we estimated we needed an annual income of $23, 640. Our actual income for the year (Keith's county custodian salary plus my small nursing pension) came in at $20, 701, obviously short of our projected needs. But never fear, we made up the difference with some beef and pork sales and Facebook sales of pig feeders, seed spreaders and a few other things we no longer needed.

Interesting to note: this is our lowest combined income in the last 25 years. Keep in mind, our children are raised and we are not financially responsible for any elderly family members.

Consequently, because of our low income, our completed tax return (thank you Turbo Tax) will result in a 100% refund of all federal income taxes paid but only 12% of or state taxes are being refunded. Oh Illinois how you vex us!   Therefore one of our goals, not to pay income taxes, was nearly accomplished.

Well technically we did pay them via payroll deductions but we're getting them back. Now that we have one year behind us of low income, Keith was able to submit a new W-4 form claiming he is exempt from paying income taxes. So that money is ours to use right away rather than the US government sitting on it for a year without paying us any interest. Confusing isn't it?  No one said having less was easy. :) 

In my next post I'll share some of our expense areas, specifically those where we did not meet budget, and how we plan to improve in 2018. 

Monday, February 5, 2018

For Every Window That Closes A Barn Door Will Open

 Progress on the new barn, made of old and recycled materials, has been slow with all the debris that has accompanied our Illinois winter this year. Debris in the form of rain, ice, sleet and again tonight, more snow.

Young folk around here have been heard to say it's a rough winter while I keep saying, "Remember the snow of 1967 in Chicago? Not THAT was a tough winter" These kids.

Image result for 1967 Chicago snow storm
Chicago, January 1967   24 inches of snow in one day.

Anyway, Keith does what he can on the barn as weather allows. Yesterday he installed the door going into his shop area. It's a beaut isn't it? We found it-frame and all- at a garage sale last summer for just $20. Sure it's on the ornate 80's side with its gold trimmed glass oval, but it's sturdy and big. The outside gray goes pretty well with the weathered gray of the barn steel. The funny thing is, it's a better door than either Keith or I have ever had on a house of ours-let alone a barn-in our entire lives!

The inside of the door is white and goes with nothing and everything simultaneously. The most important aspect of the door is the fact that just a little bit more of winter stays OUTSIDE of the barn. Except of course for the snow we track in with us. 

Wednesday, January 31, 2018

Tax Time. Oh Joy. Seriously.

Image result for photos of crazy tax time

Early last year I shared with you our budget for 2017, covering everyday items like income, livestock care, utilities, food, car repairs and more.

In the next few posts I'll tell you how we came out at year end. First though, I want to get our taxes done, a process I am looking forward to. Why? Because for the first time in over 25 years, our income is so low, our financial life so simply mundane, that we can complete the tax forms ourselves.

No more accountants. No more asinine tax forms like Interest and Ordinary Dividends (Form 1040A Schedule B), Capital Gains and Losses (Schedule D), Profit or Loss from Farming (Schedule F), Passive Activity Loss limitations (Form 8582) and so on.

"Passive Activity"  I wonder what government entity came up with that oxymoronic form title?

Ah well, you get the point. In years past it would take us days and days to collect all our sales info and other farm related data for our annual meeting with our tax guy. We never really knew how we would come out as we could not keep up with the ever changing agricultural tax laws. Thus the reason we had a tax guy. Some years we had losses and paid less tax, while other years when we were more "successful",  those profits went right back into some bureaucrats pocket.

This year we'll just hop on the TurboTax site where we can complete the 1040 EZ form FOR FREE.
We received the last W-2 Form for my small nursing pension just yesterday so tomorrow...is tax filing day.

I really am so excited and I just can't hide it!

Monday, January 22, 2018

A Happy Pig is a Muddy Pig

 The weather continues to vex us. Very cold then unusually warm. Good amounts of snow, then ice, then fog like we had yesterday. But at least the ground thawed enough to let our four feeder pigs out of their small training pen and into a bigger lot.

Feeder pigs. I love that term. We feed them and soon enough they end up feeding us. Sheer poetry I tell ya.

For the last month they have had a large boxy building and a closed-in section for exercise. The back of the fenced area above had a hot wire across it to teach them electricity hurts, stay away. Normally we have our feeder pigs out of the training pen in a week or two, but with the horrible cold we figured keeping them in closer quarters kept them warmer.

But when the thermometer got up in the fifties again yesterday, we knew it was time to get them in a bigger area. Keith put in additional fiberglass posts and then strung two hot wires around a 100 foot by 80 foot area. We opened up their playpen and let them go.

They did well with the electric fence, hitting it with noses a couple times and then going backwards instead of through the fence as hogs will do if they are not familiar with electric fencing. Once they had their perimeter scoped out they starting running from end to end, jumping and twisting their bodies in midair. What? You've never seen a pig dance?

It reminded me of this ridiculous you tube video I once found where a female scientist was defending the awful confinement hog operations, stating that hogs did not need any room to move or turn.  She said "they don't even like to turn around." What an eejit.

Hard to believe these guys are black and white, not just black as they appear in the photos,  but they've had a good time rolling in the mud. They are growing well on a diet of cracked corn, raw milk from our cow Liz and veggies from the kitchen. In the next couple of days I'll make an appointment with the locker for late April. Good thing. I ate our last pork chop from our fall hogs a couple of days ago.