Reader Case Study: Making Full-Time Farming a Reality in Arkansas
Sara Beth and Colt operate an 80-acre livestock farm in the Arkansas delta with their three dogs. They raise cows and goats, have chickens and ride horses. Running the farm is their dream. The only problem is that it isn’t profitable (yet) and so they’re both working full-time jobs in addition. They’ve asked for our help in figuring out how to make it work financially for Colt to quit his day job and manage the farm full-time.
What’s a Reader Case Study?
Case Studies address financial and life dilemmas that readers of Frugalwoods send to me requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.
NEW INFO: Based on popular demand from you all, and a TON of submissions, I’m going to start featuring TWO Reader Case Studies per month!
I probably don’t need to say the following because you folks are the kindest, most polite commenters on the internet, but please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not condemn.
And a disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.
With that I’ll let Sara Beth, this month’s Case Study subject, take it from here!
Sara Beth’s Story
Hey Frugalwoods Friends! My name is Sara Beth, my husband is Colt, and we’re both 32 years old. We live in the delta of Arkansas with our three dogs: a 13-year-old border collie, a 7-year-old Australian shepherd, and a 5-year-old blue heeler/corgi. We own and operate a livestock farm on 80 acres and raise beef cattle and meat goats, alongside a few chickens, horses, and barn cats.
Sara Beth & Colt’s Careers
While we’re growing our farm slowly, by paying for things as we go, we’re also both working full-time jobs. I love my job as a 4-H Agent and I run the 4-H youth development program in our county. Side note: any readers with kids ages 5-19 years old – check out your local 4-H program! Every state has 4-H, and most of the time the programs are free or super cheap! The focus of 4-H is hands-on learning to develop life skills. I’ve been at my job for over 10 years and have amazing benefits, including a 10% retirement match (!). Colt works as a farm hand for a local row crop farmer.
The farm is basically our hobby at this point. Most, if not all, of our animals have names and they’re all living their best lives. Colt and I are both homebodies, so almost all of our free time is spent on the farm. I recently bought a new horse so I can get back into rodeo, which is what I grew up doing.
I took some time off from competing after my good horse got old enough to retire and I was focusing on my job and building our farm. Dottie, my new horse (named after “A League of Their Own”), has been great for my mental health. I didn’t realize how much I needed time in the saddle. Aside from the farm, I enjoy reading a lot. Like, a lot a lot. My brain doesn’t do idle well, so if I’m sitting down, I’m usually reading.
We both enjoy hunting, and two years ago I finally got Colt to join a deer camp. It’s awesome for him to have a place to go on weekends during deer season.
I also took up blogging about farm life recently on our farm website–Flying Pig Cattle Co. I’m passionate about agriculture literacy and really, truly believe that everyone should know where their food comes from. Just like with any industry, there is so much information out there about food and farming that it’s hard to know what’s true and what’s just a marketing gimmick. Sharing this information–through my job and our farm–is a passion of mine.
Sara Beth & Colt’s Finances
I feel like financially, we do a good job living below our means. We don’t pay for TV, we have an antenna that gets several local channels (mainly NBC for America Ninja Warrior, Laff for Home Improvement, and GRIT for 24/7 Westerns – insert eye roll here). We don’t have internet at home, although this may change soon. It’s tough since we don’t have cell service at home either, and when I was working from home for three months during the pandemic, I had to go next door to my parent’s to use their internet.
I cut both my and Colt’s hair. Our entertainment budget is basically zero. I think we went to one concert in 2019, and the tickets were like $20. We aren’t big on gifts – birthday, Christmas, or otherwise. We have 4 nieces, so we usually build or make them something for Christmas.
My vice is Sonic Coke. I get one every morning on my way to work and my sonic girl, Lacy, knows my name, my truck, and usually has my drink waiting for me. Here’s my thinking after years of this addiction: It’s $1.09 a day, 5-6 days a week. For my mental health, and the safety of everyone that has to work with me, that $300 a year is worth it.
The Long-Term Farm Goal
While our farm does produce income, we are still funding it through our personal finances. We’re growing the farm so that eventually, it’ll hopefully be profitable and sustainable. We started from scratch when we married in 2015 with 80 acres of bare land. Over the last five years, we’ve made a ton of improvements. We built a house (shome – half shop, half home) almost completely by ourselves, and paid for it as we went. This involved living in a camper for our first year of marriage…with three dogs… while building the house. We’ve also built miles and miles of fence, a barn, an equipment shed, and made lots of other improvements around the farm. The only money we’ve borrowed for the farm was for the land and a tractor that was desperately needed.
Colt loves farm work but is not a fan of working for someone else–he’d rather be working on our farm. If he quit his full-time job, we know he could do “freelance” farm work and earn some money. He could drive a tractor during planting and harvest, and haul grain for farmers during harvest as well.
He has his CDL so could pick up some driving jobs here and there. With him home, he could better manage our farm, and in theory help the farm become more sustainable and profitable. We’ve discussed that if we were to have kids (still deciding) he would stay home with them until they go to school.
I’ve told him multiple times I’m supportive of him, no matter what he decides to do, but I know if I could show him some numbers, he’d be more likely to take the leap. Happiness is more important than a job and I hate knowing that Colt is not happy at his current job and is not getting to spend as much time on our farm as he’d prefer.
Where Sara Beth & Colt Want To Be in 10 Years:
- In 10 years, I’d like to be making significant progress toward our savings goals, and I’d like Colt to be working on our farm full-time.
- In 10 years, I’d like to have over $500,000 in our retirement accounts, and at least a year or two’s worth of spending in a savings account.
- Our land payment will be paid off in 15 years, and I can technically retire from my job in 15 years as well, at 46 years old. In my dream world, we would be financially independent, or at least Lean FI, so that I could retire from my job at 50 years old and we could both focus on the farm full time.
- Similar to now. We want to still be on the farm, hopefully growing the farm and increasing profitability. We would love to own more land. We don’t have wanderlust, but we do have a few places we want to travel to – the redwoods in CA, Ireland, and Alaska topping that list.
- I hope in 10 years we would have either made those trips, or have plans in place to go.
- Like I said, I love my job. It is very rewarding, and I hope to still be in the same position in 10 years.
- As for Colt, I hope that 10 years from now he’s working full time on our farm.
Sara Beth and Colt’s Finances
|Sara Beth’s Income||$2,962||Sara Beth’s take home each month (retirement, health/dental/vision insurance are pulled out pre-tax)|
|Colt’s Income||$2,300||Colt’s monthly income (-ish he’s paid weekly, so that’s 4 week’s pay)|
|Sara’s Travel Reimbursement||$200||Sara Beth’s job reimburses her mileage for work. This is the 2019 average since obviously 2020 is weird.|
|Item||Outstanding loan balance||Interest Rate||Loan Period and Terms||Equity (amount you’ve paid off)||Purchase price and year|
|Land Payment – We financed the land and paid cash for the shome (shop/home) as we built it||$147,338||5.6% (This interest is higher because it was a land loan since there was no house when we got it. We’re in the process of refinancing this to 2.65% for 15 years.)||20 year fixed rate||$33,662||$181,000 in 2015|
|Item||Outstanding loan balance||Interest Rate||Loan Period and Payoff Terms|
|Tractor loan (for the farm, but paid for from our accounts)||$12,792||5.75%||5 yr loan (end date of 4/2024) – monthly payment is $410.76 but we’ve paid $600/month. If we continue at that rate, we should have it paid off by 8/2022|
|Vehicle make, model, year||Valued at||Mileage||Paid off?|
|2008 Dodge Ram 1500 – “Bandit”||$1,000? (not much)||256,000||Yes! This truck is my baby. I’ve had it since it had 9 miles on it. And before anyone asks – yes I needed a truck. #farmlife|
|2007 Dodge Ram 3500||$15,000?||150,000||Yes. Like I said above, farm life. This is our “nice truck.” We use it to haul horses and cattle. We do try to keep everyday miles off of it so it will last us a long, long time.|
|2012 (I think) Dodge Caliber “Hashbrown Feedwagon”||Not much at all… lol||180,000||Yes – this car was given to us by my in-laws. It’s ragged out, and they figured we’d just sell it, but its held together and we’ve driven it a lot to keep miles off other vehicles.|
|90’s-ish model F-250||We’ll find out at the auction coming up||A lot||We had this truck because Colt needed 4 wheel drive at his previous job. We’ve finally decided to get rid of it and get it off insurance.|
|Item||Amount||Notes||Interest/type of securities held||Name of bank/brokerage|
|Sara’s retirement||$144,608||401k – my work matches up to 10% ($900/month total contribution)||88% VIRSX, 12% VIIIX All new contributions are going to VIIIX||TIAA|
|Colt’s retirement||$7,209||Traditional IRA||FZROX||Fidelity|
|Colt’s savings||$6,785||Main Savings||.05% interest|
|Sara’s savings||$5,084||Main Savings||.80% Interest (Was 2% when I opened it!)||Ally|
|Sara’s Taxable Investment account||$1,953||Taxable Investment||FZROX||Fidelity|
|Sara’s checking||$1,598||Basic checking account|
|Sara’s Roth IRA||$1,465||Roth IRA||FZROX||Fidelity|
|Colt’s checking||$873||Basic checking account|
|Sara’s savings||$501||Basic savings||Very very low interest|
|Land Payment||$1,255||Once our refinance rate of 2.65% kicks in, this payment will drop to $1,015 per month.|
|Tractor Payment||$600||With the extra payments, we should pay off the loan by 8/2022|
|Groceries||$500||This includes food, household supplies, and usually dog food.|
|Gas||$300||Right now, Colt is driving a work truck, so that helps keep this lower|
|Fast food/restaurants||$200||Quarantine has helped on this – we both do good about taking our lunch, but sometimes it doesn’t work out. I also have an addiction to Sonic Cokes – but that $1/day is worth the lives it saves from my wrath|
|Farm Expenses||$200||While the farm does have its own bank account, and earns its own money, we are growing a new business. We are funding it ourselves, so some expenses come out of our accounts.|
|Miscellaneous||$150||Yes – I know – I should know specifically where this is going. I didn’t categorize specifically enough in Mint|
|Electric Bill||$140||I looked into solar – I love the idea of being self sufficient, but with our bill so low, it would take a long time to get a return on our investment|
|Colt’s Life Insurance||$132||Whole life – If I’d known then what I know now, we wouldn’t have opened this policy|
|Home Insurance||$98||Paid annually|
|Car Insurance||$73||Honestly, for 4 cars/trucks, and my horse trailer, this isn’t that bad. We get several discounts for using the same company our farm insurance is through|
|Colt’s Cell Phone||$70||AT&T – we tried Mint but no service. Where we are (super rural) service is super sketchy. We already have to leave phones by the door or go outside to make calls.|
|Car maintenance/registration||$50||Kinda high estimate, but cheaper than a car payment|
|Colt’s Life Insurance||$44||Term life|
|Property tax – real estate||$42|
|Deer Camp||$35||Worth it. I told Colt he needed to join a few years back because it gave him a hobby and a chance to get away from home.|
|Property tax – vehicles||$25|
|Clothing||$25||Farm life is rough on clothes. I’ve cut back a lot on my purchases, but Colt goes through jeans like crazy. Patch jobs don’t even last long around here.|
|Travel Expenses||$25||We don’t do a lot of travel, but do like to get away occassionally|
|Gifts||$15||We aren’t big on gifts in our families, but we do have 4 nieces and we like to make our build them something at Christmas.|
|Sara’s Life Insurance||$11||Minnesota Life – 20 year term tied to our land payment|
|Amazon Prime||$11||I don’t plan on renewing after our subscription runs out next May|
|Kindle Unlimited||$11||Worth every penny, and is the best for my mental health. I read almost every day on my phone and I’m embarrassed to admit how many books I read in a year. Trust me on this – it’s worth it.|
|Propane||$10||We have gas stove, oven, and a heater in the winter. This is probably an over-estimate|
|Card Name||Rewards Type?||Bank/card company|
|Bank of America Travel Rewards||Travel||Bank of America|
Sara Beth’s Questions For You:
1) How much money do we need saved before Colt quits his job in order to work full-time on our farm? I want to identify a goal number so I can encourage him to quit because his happiness is more important than money.
- Should he work one more year and save as much as possible before quitting?
- Once he quits, how much would he need to earn from freelance farm work?
2) Our land will be paid off when we turn 45 and I can technically retire from my job at 46. Would retiring to run the farm by age 50 be a realistic option?
3) I would love ideas on how to make our farm more profitable.
- Currently, our farm income comes from selling the calves at weaning age, goat kids, and occasionally selling hay.
- All current farm profits go back into the farm. A lot of farmers take out loans when they start to farm, and then use the profits to pay the loan back. We’ve chosen to instead grow slowly by investing our profits back into the farm.
- Here are some other ideas I’ve had to add profits to the farm in the future:
- I think one day I’d like to offer farm day camps for youth. This is just a basic idea and I haven’t thought through any details of that yet.
- Goat yoga. I laughed so hard the first time I saw this concept, but it’s really kind of genius. I actually teach yoga for Kids as a 4-H program, and have a good friend who is a certified yoga instructor, so this one may work if the interest is there.
Mrs. Frugalwoods’ Recommendations
What I love so much about Sara Beth and Colt is their determination that they’ve identified and created the life they want to live. Many of us spend decades flailing around, uncertain of how we want to spend our precious resources of time and money. But not these two–they figured it out and now they’re making it happen. While their questions today are financial, I think they’re coming at them from exactly the right angle: first, figure out what you want to do; second, figure out how to make your money facilitate it. Working toward a purely financial goal–without a clear destination other than a dollar amount–is usually far less motivating. Money is only good if you’re using it as a tool to create the life you want.
Sara Beth’s Question #1: How much money do we need saved before Colt quits his job in order to work full-time on our farm?
In addition to totally nailing the whole figuring-out-what-to-do-with-their-lives thing, Sara Beth and Colt are doing a fabulous job financially. Thanks to their frugality and savings, they’re in a good position for Colt to look at quitting his job in the near term.
A couple factors making it hospitable for Colt to quit his job:
- Sara Beth’s job is the one providing their health and dental insurance and the retirement match.
- A question for Sara Beth is how stable she perceives her position to be.
- I know she’s been there a long time and wants to remain, but the question to consider is if there’s any instability within the organization on the horizon. This could change the calculation on Colt’s job.
- Colt has a lot of markable skills and could easily pick up work if they needed the money.
- His CDL license and farming skills provide a lot of security in knowing he could work if needed.
- Given these two factors, the real question here is if they can reduce their expenses so that Sara Beth’s salary alone can cover them every month.
Let’s do the numbers!
Current monthly expenses: $4,072 – $2,962 (Sara Beth’s after-tax income) = $1,110 difference (as in, they’ll need to spend that much less in order to break even on Sara Beth’s salary alone)
Here’s what I’m thinking:
- Complete the mortgage refinance, which’ll drop their interest rate to 2.65% and their monthly payment to $1,015, which’ll save them $240 per month.
- Use the money they save with this lower land payment to pay off the tractor loan ASAP.
Once the tractor is paid off, their monthly expenses will be slashed by $600. Combined with their lowered mortgage payment, they’ll spend $840 less per month, which gets us really close to having Sara Beth’s salary cover their expenses ($1,110 – $840 = $270). Let’s see where else we can pick up some savings to whittle down that remaining $270.
Expenses: Focu$ On The Big Fi$h
When you need to save more money, I’m a fan of focusing on the biggest expenses. Sara Beth’s daily Sonic Coke is not something I’m worried about and wouldn’t move the needle much for them, so no worries, Sara Beth, we will not make you give up your soda :)! What I want to hone in on are the biggest dogs in their monthly spending, which is why I started with the top two line items: mortgage and tractor loan.
Here are their next largest expenses:
- Groceries/household supplies/dog food: $500. This is very reasonable and there’s probably not a whole lot of room for savings, but if they feel like they could save more, go for it!
- Gas: $300. Here’s one I want to talk about. As a fellow rural-living truck owner, I 100% understand and support the need to have a truck for farm work. What I’m wondering is if there might be an opportunity for Sara Beth and Colt to consider buying a cheap, small, used car that’d get great miles-per-gallon and save them a ton on gas.
- When they don’t need the haul or cargo space of the truck, it might behoove them to drive a small car.
- I have a Toyota Prius (a hybrid with amazing gas mileage) to use for long drives and a pick-up truck for hauling/carrying. If this approach might appeal, it could be a way to permanently reduce this line item.
- It would also serve the benefit of keeping more miles off the trucks so they’re “saved up” for when they’re truly needed for farm work.
Fast Food/Restaurants: $200. Since this is discretionary, this’d be the quickest and easiest way for them to save enough to get their expenses to fit under Sara Beth’s salary. If it feels tenable to give this up (minus the Sonic Cokes, which we’re keeping!), they’d then be just $70 shy of breaking even on Sara Beth’s monthly income).
- Colt’s Life Insurance: $176 (combination of $132 for Whole Life and $44 for Term Life). Since this is draining so much money every month, it’s probably worth exploring if it would be advisable to replace the Whole Life insurance with expanded Term Life.
- Cell phone: $70. Let’s spend a minute here. I do not have cell reception on my property either and so I primarily use web-based services as well as a landline. I encourage them to investigate the following:
- How much would internet be every month?
- Could they switch to using all web-based services? (see this post for the specifics)
- Could they get a landline for cheap (likely with a VOIP)?
- In addition to all of the above, they should search for an AT&T MVNO as I know they’re out there and will save them a ton every month. Read more about MVNOs here.
While Sara Beth and Colt might be able to trim around the edges on their smaller expenses, most of those aren’t going to get them to the number they need. If it were me, I’d focus my energy on refinancing the mortgage, paying off the tractor, and figuring out which of the above most-expensive expenses to reduce.
In the end, this is much less a question of how much they need to save and much more a question of how to sculpt their spending to fit into Sara Beth’s salary. In terms of Colt freelancing, that’ll be a question of how much they’re spending. If Sara Beth’s income can’t cover them, or if they want to be able to save money every month, then yes, he’ll need to freelance for the difference.
I’ve generated a break-even budget here, which wouldn’t allow for any savings other than Sara Beth’s retirement savings. That’s a risky long-term proposition but, if Colt can make the farm revenue-generating, they’ll be able to build back up their savings rate. Of course, the alternatives are for Colt to freelance more, for Sara Beth to increase her income, or for them to spend less.
Sara Beth’s Question #2: Our land will be paid off when we turn 45 and I can technically retire from my job at 46. Would retiring to run the farm by age 50 be a realistic option?
This is one of those questions where I have to choose option E: not enough information to adequately answer the question.
18 years is a long way off and the answer to this will depend on countless factors, including:
- The profitability of the farm. If Colt quits his job and ramps the farm up to profitability, that’ll tip the balance in favor of Sara Beth quitting.
- How their expenses wax and wane over the years. If they continue their frugal ways and pay off their tractor and land and if Sara Beth receives raises over the years, they’ll be in a really solid financial position.
- What the health insurance landscape looks like. If we still have the Affordable Care Act, Sara Beth and Colt will be able to purchase insurance on their own. If we don’t have the ACA, they may not have any affordable options and Sara Beth may have to continue working–just for the health insurance–until they qualify for Medicare.
- Whether or not they choose to have kids.
#4 is a major wild card for several reasons:
- It’s impossible to predict how much it’ll cost to conceive, carry, birth/adopt, and raise a kid/kids. The one certainty is that it’ll cost more than not having one. Of course, since I have two kids, I clearly think it’s a good use of money ;), but it’s also not for everyone and it is expensive.
- Sara Beth noted that Colt would be the stay-at-home parent while the kids are little. My question here is what their expectation would be of Colt to also run the farm? In my limited experience, it’s a lot harder to get “farm” work done with little ones than I anticipated. A lot of stuff is off the table for reasons of logistics and safety (for us: chainsawing, wood splitting, anything involving the tractor) as well as stuff that’s physically impossible to do with a baby strapped to your back.
- We do get stuff done outside with our kids–especially as they get older (age 4 is pretty magic)–but it’s tough with young children (under age two in particular). In my (again, limited) experience, all of my friends with working farms have some form of childcare for their young children (either traditional daycare/preschool, a nanny, grandparents, etc).
- This is just something for them to keep in mind, though certainly not an insurmountable challenge. It might be that Colt gets a lot less done with little kids than he anticipated, or, they decide to allocate some funds to paying for childcare, at least part-time.
All that to say, it’s impossible for me to give Sara Beth a concrete answer 18 years out, but I have to imagine they’ll be able to make this work, particularly if they’re able to permanently reduce their expenses (which’ll happen naturally when their mortgage is paid off) and if they’re able to generate some net revenue from the farm.
Sara Beth’s Question #3: I would love ideas on how to make our farm more profitable.
Since Colt is a professional farmer and Sara Beth works for 4-H, I highly doubt I can offer any actionable advice here! What I will say is that I love Sara Beth’s inclination to diversify into avenues like day camps and goat yoga. I think there’s likely profitability, with low(er) overhead on both of those, with the possible exception of insurance.
As I understand it, there are basically three ways to make money from farming: go niche, go huge, or get diversified. I don’t get the sense they want to run an enormous operation, so I think niche and diversification are probably their best bets. A few questions for them to consider:
- Could they expand what they sell online? Any farm products they could produce that could be shipped and shelf-stable? Or, as they currently offer, more farm tool kits?
- Is there a nearby high-end market for their meat? Fancy restaurants or hotels?
- Do they have any interest in running an AirBnb and offering agro-tourism? Is there demand for that in their area?
I think Sara Beth’s already done an outstanding job getting their farm online through her blog and could envision her expanding this side of the business to supplement the on-the-ground work of raising the animals. I think she’s very much on the right track with both the kids’ camp and the goat yoga–provided there’s a market.
Let’s take a moment to peruse the rest of their finances.
Emergency fund and cash: My main question here is why they have so many different checking and savings accounts?
If there’s a specific reason, or if they’re maintaining separate finances, then they should keep the accounts. But if not, I’d combine everything into one or two accounts for the sake of simplicity.
Between all of their checking and savings accounts, Sara Beth and Colt have $14,841 in cash. The standard rule of thumb is to have three to six months’ worth of your expenses in an emergency account. They spend $4,072 per month, which means these savings would cover three months, which makes their emergency fund on the low end.
However, since they’ll be looking at lower expenses in the coming months–with the lower mortgage payment, the tractor being paid off, and reducing other expenses–they can recalibrate how much they need saved.
Additionally, once interest rates rebound, they should look into consolidating all of these accounts into one high-yield account.
Retirement: Sara Beth is doing a great job contributing to her employer-matching 401k. In total, they have $153,282 in retirement investments. Using Fidelity’s retirement planning rule of thumb, which stipulates: “Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67,” since Sara Beth and Colt are in their early 30’s, they should have 1 x their salary saved by this point, which is $65,544. Given that they already have $153,282 invested, they’re doing great! Something to keep in mind for the future:
- Colt should save into a tax-advantaged retirement account when he quits his job and the farm becomes profitable. Even if the farm is earning very little, it still might be advantageous (from a tax perspective) for Colt to put money into something like a solo 401k. They’ll need to do their research at that point, but, it’s something to keep in mind.
Vehicles: well done on having all of the vehicles paid off!! The one note here is that, since most of the vehicles are old, they’re one bad day away form needing to replace one of them. Given that, they’re going to want to start saving up enough cash to replace whichever vehicle dies first.
The other consideration here is my above note on considering the purchase of a used, small, fuel-efficient car to drive when the truck isn’t needed, which would help reduce their $300 monthly gas bill and would reduce wear and tear on the work trucks.
Credit Cards: I note they’re using a travel rewards credit card but aren’t traveling all that much right now. I know that travel is one of their longer-term goals, so my question would be if they’re planning to save up these rewards for the future or if the rewards aren’t getting used?
If they don’t have a specific plan of action for these rewards, they might consider getting a cash back credit card, because cash is a reward you will always use. Something like the Chase Freedom Unlimited that offers a flat 1.5% cash back on all purchases (and 5% back on groceries) would give them a decent return (affiliate link). Just something to think about. And, for the record, I’d say keep the BoA card open because long-term lines of credit improve your credit score, but perhaps move their spending to cash back. More on smart credit card usage here.
Complete the mortgage refinance to lock in the super low 2.65% rate.
- Prioritize paying off the tractor and reducing their other expenses by a total of $1,110 so that they’re able to break even on Sara Beth’s salary.
- Once they have their lowered mortgage payment, the tractor is paid off, and they’re able to hack it on Sara Beth’s salary alone, I think they can get serious about Colt quitting his full-time job, with the knowledge that he might need/want to take on freelance gigs as their household expenses and income dictate.
- Consider their vehicle situation and whether or not it’d make sense to get a small, fuel-efficient car to drive when a truck isn’t mandatory. Regardless of what kind of car they buy, it’s likely one of their trucks will need replacement in the near(ish) term. Beginning a savings account now so that they can purchase a used vehicle for cash would be a wise decision.
- Ensure that in the future Colt contributes to some form of tax-advantaged retirement account for self-employed people. Here’s a rundown on accounts from the IRS.
- Consider moving their spending to a cash-back credit card in order to reap rewards they’ll use
Ok Frugalwoods nation, what advice would you give to Sara Beth? We’ll both reply to comments, so please feel free to ask any clarifying questions!
Would you like your own case study to appear here on Frugalwoods? Email me (firstname.lastname@example.org) your brief story and we’ll talk.
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