Dealing with farm income loss
Learn how to address the stress and prioritize the financial needs of your family in the face of economic strife.
Due to the recent fruit crop loss and the current drought in Michigan, for farmers, income loss is inevitable. Income loss can be very stressful for families. One way to stretch your income is to examine how your family is currently spending money. Your family may need to examine and evaluate their current needs and wants.
- A need is something that you must have: shelter, warmth, good health and food.
- A want is something that is not necessary to survive, but something you deserve or desire: a new car and vacation.
To identify needs and wants, make a list of the things that are necessary for survival and those things that you would like to have if there is enough income. One way to cut down on costs and reduce expenses is to eliminate or reduce some of the things on your “wants” list. This is good to do both individually as well as with your family. Sometimes things may be a need for one family member and a want for others. Listening to the individual needs of each family member is important for cooperation by everyone.
Needs and wants cost money. If you and your family do not develop a budget as a plan for how you want to spend your money, you may end up spending too much money on items that are not necessary. Review each family member’s individual values to prioritize what you need to spend your money on first and what things can wait.
After deciding which bills are essential, the next step is to total the cost of those expenses and to see how much income you have. If your expenses are greater than your income, you will have to take steps to correct this situation. If the highest needs expenses can be paid with the income you have, then pay those bills first. If you have lest over income after paying off the critical items, create a list of the next most important items.
Sharpening your financial survival skills can help you address how to effectively manage your finances when bills pile up. This information is from Michigan State University Extension Furthering Families Curriculum.
- MSU Extension’s Drought Resources