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Farm Cost Saving Tip: Pay Your Family a Salary

Untracked, small withdrawals can leave a big dent on your balance sheet

Green combine and two people walking.
// Business Insights

There is no better time than the present to examine all expenditures. One of the biggest hits a balance sheet can take is untracked family living expenses.

Families tend to keep an eye on large expenses, like home mortgages and car payments, but all costs of living should be tracked. Smaller withdrawals for everyday expenses can easily balloon if not properly controlled. Before you know it, your operating loan could actually be financing your family purchases. Over time, seemingly inconsequential costs can make a dent in your balance sheet; but are invisible, because they aren’t stated on the farm’s tax forms or income statement.

A better method for controlling the cost of family living is to think of your family budget as a salary or stipend paid out from the operation. The best way to do this is to cut a single monthly check to the family and put it in an account separate from all operational expenses. This way, the cash your family has on hand is finite and it’s also easier to track how much your family spends annually.

Small expenses add up over time and become problematic if they aren’t tracked appropriately. Taking the relatively simple step of cutting your family a monthly check can have a big impact on both controlling your budget and on your operation’s balance sheet.

* Loans and leases are subject to credit approval. Additional terms and conditions may apply. Farm Credit Mid-America is an equal opportunity lender.

‡ Farm Credit Mid-America is an equal opportunity provider.

Farm Credit Mid-America territory includes Arkansas, Indiana, Kentucky, Missouri, Ohio and Tennessee. Arkansas includes Clay, Craighead, Crittenden, Cross, Desha (northeast of the White River), Greene, Lee, Mississippi, Phillips, Poinsett, and St. Francis counties. Missouri includes Carter, Ripley and Wayne counties. Kentucky excludes Ballard, Calloway, Carlisle, Fulton, Graves, Hickman, Marshall and McCracken counties. Ohio excludes Crawford, Hancock, Lucas, Marion, Ottawa, Sandusky, Seneca, Wood and Wyandot counties. We serve all counties in Indiana and Tennessee. 

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