Monday I wrote a post about the kind of skills farmers have. I was pretty tickled to see lots of farmer love in the comments. In the comments for that post, Deena suggested I write about the financial lessons I learned being on the farm. I think Deena must know my password because that is exactly what I had drafted up for my next post.
I learned lots of financial lessons growing up on a dairy farm, but here are the five big ones:
- If it’s broke – fix it. If you can’t fix it, repurpose it.
Growing up, I learned very quickly that most things around the farm break at usually the most inopportune times. It’s no coincidence that I learned all the best swear words at the same time. If something broke while we were milking, or working the fields, we couldn’t just run out and get a new cultivator or milk machine, because we needed those things working as soon as possible and they’re expensive. If you go back a post, you’ll see that I listed mechanic and welder as sub-professions most farmers are capable of – and for good reason, it’s way cheaper to fix things yourself, even if it’s just a band-aid solution for a while.
If something is beyond a fix, it gets repurposed. If it’s old equipment, it might sit in a scrap pile or tucked away in a corner of the barn for a while, but eventually most things get re-used. Old plow teeth can become garden tools, spare metal and components can be used on other equipment, even home accents. Two of my favourite examples from our farm is the stainless trough my grandfather got from the old cheese factory and stowed away in the scrap pile. We found it, filled the trough out with dirt and now have a super-raised garden for growing lettuce and spinach. The other is the bulk tank, once we got rid of the cows, we moved the bulk tank out of the milkhouse and around by the silo where we use it as a water storage tank, perfect because it hooks up to a big house that can be used to water the garden.
This is something that has stuck with me. I will always try to fix something before I throw it out. I’ve fixed a couple alarm clocks, easy stuff like chairs and wooden furniture, and even a tv. It’s tempting to chuck it and head to walmart to get something new, but it’s actually really rewarding to know you’ve fixed something and saved the money and time it would take to get a new one.
- Hard work doesn’t always pay off.
This is probably the toughest financial lesson from the farm. You can do everything right, but a windstorm, early snow or hail can make all that work for naught. It’s really disheartening, frustrating and hard on the wallet.
I usually equate this lesson with investments. You can research the heck out of a stock, fund or other type of investment and then something out of your control can happen and yours returns shrivel away.
This is why my next lesson is…
- Save for when hard work doesn’t pay off.
A bad growing year, or a mad cow, there are lots of reasons finances can be tight on the farm. The good years though, can more than make up this. If you plant the right crop at the right time and get a good harvest, there can be plenty of money to spend. The peaks and valleys of farming income make it a necessity to sock money away when you’ve got it. While dairying provided a pretty steady income, cropping is like riding a roller coaster sometimes. The possibility of a variable income I think is why so many farmers are worriers. It seems worrying about next year or the unexpected costs that might pop up (like when the tiles in the field break) make for great savers.
I absolutely and fully attribute my ability to sock money away to growing up on the farm and knowing that a dry summer might be right around the corner.
- Know when to cut your losses.
When crops are harvest, ideally it’s when they are at an optimum moisture level. For example, ideally, soybeans are harvested when they’re at a moisture level of around 14% – any higher and the beans have to be dried (which the farmer pays for) before they go into storage. The best case scenario is a great fall for harvesting and the beans are combined at 14%. Mother Nature doesn’t always play nice, so sometimes beans are harvested above 14% to ensure that there is a harvest when it’s been a wet fall. The farmer pays for the drying, which will cut into profits, but it’s better than not getting the beans harvested and getting nothing.
This is something I equate again with investments. It’s important to know when to cut and run. Also, this is key when you think about time vs. effort. You don’t want to be wasting all your efforts for nothing, so it’s really important to realize when you’ve hit that point where you’re just spinning your tires and not getting an adequate pay off your efforts.
- The newest and flashiest manure spreader is still just a manure spreader.
Manure spreaders don’t stay new and flashy for long and at the end of the day, it’s just around to spread shit. My Dad never bought any equipment new. New farm equipment is unbelievably expensive, but doesn’t work much different than the old stuff. There really haven’t been any technological breakthroughs in farming equipment in a while, so there’s no reason to go out and buy a brand new tractor. It doesn’t matter what the neighbour thinks of your old manure spreader, all that really matters is that it gets the job done.
This is probably the reason I have such an aversion to things that are expensive for the sake of being expensive. Lululemon is my favourite example – they are just yoga pants! I don’t need 90-dollar yoga pants to do yoga. The 20-dollar ones from costco (seriously, that’s where I bought my last pair of yoga pants and I love ‘em) seem to let me do yoga just fine. I am not always immune to new and flashy (after all, I’m planning on buying a new mac to replace my laptop) but the farm-mentality is still a pretty heavy influence when it comes to what I spend my money on.
I wouldn’t hesitate a moment to say that being raised on a farm has been a major influence on my financial outlook. I’m curious to know if others have had similar influences on their financial habits. What financial lessons did you learn from your parents or from where you grew up?