Signing on the Dotted Line....Part 2

This is the second part in a series on farm & family finances.  We are so excited about (and thankful for) our new project!

The farm still has debt.  When it comes to the business we look at it a little differently. Although we would like to be free and clear,  for us some debt is necessary to keep the farm in a profitable position.  We are very cautious when it comes to borrowing money.  We ask ourselves if:

1.   It is a profit-generating project
2.   If not doing the project will have a negative impact on the farm
3.   Can we make the payment even if the market tanks?
4.   Have we paid other debts off? ( or are we just be stacking another one on?)
5.   Is it really needed? (or are we just being wishful in our tiredness?)

We also pay attention to things such as our net worth, asset: liability ratio, cash flow and other financial indicators.

Proverbs 27:23 "Be diligent to know the state of your flocks and herds."

From the beginning we have wanted to build a barn to house the cows in.  It was our goal to save up enough money to do so.  We still could, but we really need the barn now.  In muddy/inclement weather situations we are using the same amount of space for 118 cows that we used for 60.  Now that we own some equipment, we need to be able to put it inside for the winter to extend its usable life.  So the plan is to use the old housing for storage for equipment & feed, and build new housing for the cows.  The cows haven't complained about being out-wintered, but now the lanes will take less of a beating, the cows will be cleaner on the muddy days, and feed (read $$$$) will be saved now that it's under cover. It may also be a little bit easier to find or retain team members with a better facility.  If not, at least we will enjoy it!

Signing on the loan for the new barn.  I signed too, but someone has to take the picture!  Look how happy the farmer is! He has worked so hard-now he can go at least another 34 years!

Proverbs 22:7 The rich rule over the poor, and the borrower is slave to the lender. 

We do not feel like we're a slave to our lenders.  We feel more like we're on a team, working together to win the game of dairy farming.  Truth is though, if we become irresponsible and make bad financial choices, we will have to do what they say, because they have a stake in our business.  Until the last payment is made, it is our obligation to prove that we are worthy of their trust and investment.  We honor God as best as we can by not taking on more debt than we can repay.  We also sleep better.  We encourage you to take a good hard look at your personal and business finances.  The first step is often the hardest one to take, but it may be as simple as picking up a book, or making a list of debts you're going to focus on paying. What matters is that you take that step, or keep walking (for some of you) to reach your goals.

-Terri

This Week in Pictures

Last Sunday we loved seeing the baby skunks at Mom & Dad's! The skunk's mom was killed in the road, so these little fellas have been camping out in the calf hutches, and they wander around as they please.  Everything is cute when it's little.....



Just in time for Father's Day-it doesn't matter what you're doing, as long as you're doing it together.

1 of 6 fields of hay put up this week for a total of about 480  bales

Rick, loading bales-most often we load our own loads, and unload at the wrapper. But this time I was blessed by his presence and he loaded his wagon and mine.

My hay haulin' crew!

They say milk is good for the skin...

"Eat more pork!"


Happy Father's Day, Dad!
Hope you have a memorable day!

Signing on the Dotted Line....Part 1

This is the first of a two part series on farm & family finances-How we think; operate; and plan for the future. Stay tuned for part two for an exciting new adventure for Grazeway Dairy.

Its probably no secret that we're big fans of Dave Ramsey.  His no-nonsense biblical approach to finance has helped people of all income levels get their financial affairs in order. Dave speaks the truth about responsibility and what it really means to honor God with the money He provides for you.

Dave has also wrote a book called EntreLeadership.  Its about the steps you need to take to succeed in the world of small business.  What sets this author and book apart from all the others is the fact that Dave was once bankrupt himself.  He now uses his own experiences to council others and get them (or keep them) heading in the right direction. 

One thing Dave claims is that you can start a small business without going into debt.  Is that possible in Agriculture?  It might be.  You could start with 1 cow, get her bred, and grow your herd.  You could lease your cows to another farmer until you herd is big enough, and then rent your own farm.  You could trade labor for use of equipment until you save up enough money to buy some very used pieces.  Along the way your herd (under good management) would continue to grow, you could trade up on equipment, and save to buy a farm.  Around here land is going for about $6,000.00/acre, or more.  If you could save about $2,000 a month(with a modest herd milking), it would take about 25 years to save up the money to buy a 100 acre farm.  Hopefully it would have some sort of milking facility on it already.  And a house.  At this point, assuming that you started when you were 18, you would about 50 years old.  Still some life left in you to farm, for sure!

We didn't take this route.  We took out a mortgage and bought a farm, having about 60 head of cattle to start with.  25 of those we had an additional loan for.  We also had a loan for the parlor we built.  Kind of makes us look like hypocrites, huh? I would like to think not.  We only borrowed what we absolutely had to have to get going. Here, you cannot build on land you do not own. So we bought the land.  When we ran our finpack farm analysis, 60 cows  was the minimum to turn any kind of profit. So we bought the cows.  Milk cows need to be milked. To send milk on the Grade A market (the best price) you have to have a facility. So we built one.  But it stopped there.  We only borrowed money for things that we absolutely had to have to get going.  As we paid that debt down, we bought some other things that are really useful to farmers; a truck, a tractor, etc.  Most (but not all) things we paid for with cash. But it took a long time to get to that point.  We're 11 years in and now we find that if we buy used and old enough items we can typically save & pay cash for them.

We do not have any personal debt.  That is something we have also worked on over the years.  We do have 1 personal credit card, when used it is paid in full each month. We carry no vehicle loans, and the last two kids that we had were paid for as soon as we got the bill. That meant we stayed less than 1 full day in the hospital (and were blessed with healthy babies), but it was worth it.  Having no personal debt doesn't mean we live high on the hog. It means we only have one bathroom, no smart phones, vehicles that are 17 & 8 yrs old;  a big garden and our travel trailer (just bought-with cash!) is as old as Rick is-literally.  Material things do not matter as much to us as making memories, so often our funds are directed more towards family activities (& giving) then buying "stuff".




Check out this find! A 1979 Nomad 23ft travel trailer!  Vintage is in, and for once we are with the trend!  It was taken care of very well, stored inside and treated with respect.   We're having a blast shopping for the Tupperware and housewares from the same year to match the red, brown, & orange (original) interior.  The kids love sleeping in it (even if parked in the yard) and I'm sure some good memories are to come.   The best part? $1500.00 (after negotiations, of course).  No more than the cost of  a 1 week vacation for a family of 7.  Like Dave says, have that vacation paid for BEFORE you go!

 -Terri

Color-Coded Kids

Psalm 127:3:5
Children are a gift from the Lord;they are a reward from him. Children born to a young man are like arrows in a warrior's hands. How joyful is the man whose quiver is full of them! He will not be put to shame when he confronts his accusers at the city gates.

Children are a gift from God. They have wonder, imagination, curiosity, and trusting spirits and can be a real joy to be around. However, they can also be a "handful" as many people say it!  We love having a handful of kids-5!

Many of you may have noticed in the pictures of the kids that they always seem to be wearing the same clothes. Well, they are-kind of.

The farm poses a special circumstance when it comes to laundry. For each person that works outside, you have a wardrobe of "barn" clothes, and then you also have their "good" clothes.  When the two oldest boys were younger, their barn clothes were merely good clothes that were past their prime.  They shared these clothes; and often we would find them on the floor at the end of the day (not in the dirty clothes basket) or there would be arguing over the favorite shirt that they both wanted to wear.  There was also a lot of outfit changes. They would start the day off in good clothes, then change to barn clothes, then back to good clothes.  The good clothes (although not dirty) would end up in the dirty clothes basket, resulting in needless washing.

As our family grew, my sister recommended a book, called Large Family Logistics.  It is written by a farm mom of 9 and is packed full of good ideas for house keeping, organization, meals, etc.  Our laundry system is adapted from an idea out of her book.

I assigned each child a color. I actually tried to pick one that they liked, and one that complemented them.  Each child got 2 crates, one for shirts (6) and sweatshirts (3), the other for pants (4) and shorts (4). Early on I ordered color-coordinating sweatpants for each child online. The older boys now prefer jeans, which I buy at the local second-hand shop.  These are their barn clothes. They also got an apartment sized laundry basket, and I duct-taped the handles with their coordinating color of duct tape.

Crates for barn clothes with the oldest child's at the top. When the baby is old enough, we'll add a shelf and move everybody up one shelf.

The system:

1. Each child size 2t+ puts on a new set of clean barn clothes each morning.
2. The older boys then put their dirty barn clothes in their own basket in the evening (or when dirty).
3. The older boys are assigned a wash day, and wash their own barn clothes by themselves using the washing machine in the barn. Its good practice for them.
     A. If they have no clean clothes, it's their own fault.
     B. If I find clothes on the floor, I know exactly who they belong to, by color.
     C. They are responsible for drying and taking care of their clothes, too. 
4. The younger kids still put their dirty barn clothes in with ours and we wash them...for now!

Now, we do not go through as many "good" outfits as we used to.  They change before we go out; and we are instructing them to hang them back up as soon as we get home, unless they actually have debris on them.  They do not need as many outfits, either.  Less clothes for each person is also much easier to manage.  Each of the kids has 3 good pairs of jeans, and 2 pairs of shorts, about 5 collared shirts, dress pants, and numerous t-shirts from their clubs,teams, or activities. 

With our family of seven, we still can get by doing laundry only 1 day of week for the most part. Occasionally we will have an extra load during the week, but not often.

This color-coded system also works for towels:

and water cups:

The initial investment was around $280 for the barn clothes, plus the crates (6 to start, then 2 more added later).  The t-shirts we ordered have the farm logo on the front, and are going into their 3rd year of use.   The boys love their "uniforms" and I will have to replace them soon, and go a size up for them.  We have occasionally had to replace pants and shorts due to unrepairable holes.  I'm not sure if I can count the cost of the towels and cups as extra, given that the towels were the first that we bought since our marriage, 12 years ago.

In a perfect world, all of our "systems" would work, all the time. Truth is, they don't. When there is a system failure, we just try our best to tweak what needs fixed or what is no longer working.  It also allows us to use real life as a tool for training the kids how to not be wasteful of things, time or money.   Remember, everything we have is a gift from God-especially the kids!

-Terri