Finances,  Hearth,  Land,  Simple Living

Seven Tips for a Debt-Free Homestead

This past week has been one of looking at finances, playing with spreadsheets, and exploring budget options, which has led me to reflect on our journey to a debt-free homestead and what things I might say to someone looking to follow the same path. None of this is ground-breaking news to anyone, but I hope it could help even just one person with one little aspect on their journey too.

Each step brought to you by a Milo photo as our pup doesn’t get nearly enough screen time here as he deserves ❤️

1. Pay off Existing Debt as Soon as You Can

Feels a bit funny to say that a way to not have debt is to pay off your debt…but if you have it already, that’s what it can boil down to! If you don’t have your homestead yet, but have debts with you, it can make the transition into homestead life that much easier to be free of said debts. Mr BirdCat and I had about $30k worth of debt to pay off when we first got married from poor financial choices made in our youths so our first step before even thinking of the homesteading lifestyle was to pay off that debt. Family and friends helped us get set up in our new little rental with furniture and the like, and then we both worked hard to get those numbers down. I’m so thankful that we were in the position to do that as we wouldn’t have been able to get into our little cabin homestead with paying the high monthly fees and interest that we would still be paying three years later if we didn’t get it all paid off then.

Merida doesn’t have a care in the world even with Milo running around her, too busy focusing on the job at hand — eating (or paying her hunger debt ;P )

2. Have a Useful Budget (that you will use)

Debt in any form is daunting, but thankfully there are tools to get through it. Three years ago, with a love for all things spreadsheet, I created our own budgeting system using a mix of ideas. That worked great for the time. For the past year I’ve used Aspire Budgeting which is a free spreadsheet based closely on the YNAB (You Need a Budget) method which sits nicely in your Google Drive. Even though it’s quite a bit pricier than free (thankfully we are able to claim it as a work expense for taxes which helps), just recently I’ve switched to YNAB properly in time for our new financial year, and I couldn’t be happier. They have a lot of great resources available too on how to properly budget and pay down debts or save up for things in the future. I love being able to buffer out our money so when a bill comes in we’re able to just pay it as the money was already assigned to it. Definitely beats the days gone by when a bill would appear and we would scramble to find the money as we had already spent it thinking we had much more than we actually did.

That being said, the best budgeting system is one that you stick to, and works for you! Mr BirdCat thinks I’m a bit mad for my love of playing with numbers and spreadsheets, but he’s the one that brings in almost all of the cash, so we work well as a team. I’m able to focus on this side of things while keeping him in the loop with mini budget meetings, and he’s happy he doesn’t have to worry about it as the money has already been sorted out. If I had to set up a way to save money that Mr BirdCat would actually use himself, I’d probably set up bank accounts to automatically put aside the money each week for different bills, that way he wouldn’t have to think about it as much, and the money would still be there. If something is a pain point for you, see if there’s a way to automate it!

3. Look for Alternatives

We don’t live the typical lifestyle, I’d say even as far as homesteads go (is there a typical homestead lifestyle?). Thanks to being inspired to start on our journey, we headed on up to the bank to see what they would lend us for our first property…and were a bit disheartened to learn that they wouldn’t even lend us the amount for the cheapest run down house, let alone the acreage of our dreams (Mr BirdCat is a sole trader which instantly makes things difficult, and had spent the two previous years traveling back and forth between Australia and Canada while we were courting, so he didn’t exactly have the best record that they wanted to see!). Instead of giving up, we kept looking.

At some point, we asked Mr BirdCat’s family for use of part of their land. They own an acre and a half, and a third of an acre down the back was simply a paddock that they mowed and did nothing else with. They didn’t mind at all, so we worked out an agreement, and away it went. Everything really fell into place for us just having the land available, and we are so thankful for that. I understand not everyone might have friends or family willing or able to do something like that for them, but there are other options out there! Things like Paul Wheaton’s SKIP program make having land to work with a much closer dream than the typical grind of saving up money to get there.

We pay Mr BirdCat’s parents for the use of the land and utilities every month, but it is in no way close to what we were paying for the rental. We spent the first year living in an old ~18m2 cabin we moved onto the property (classed as a detached extension), and are nearly done our 28m2 which will allow us to have a proper kitchen, dining, and living room, as well as has let us modify the cabin to have two bedrooms and a bigger bathroom. We don’t live in a massive beautiful rancher or anything like that, but we love our little house, we own it outright (could move or sell it down the track if we liked) and it means we get to enjoy living this lifestyle.

Milo wasn’t too sure about this whole house coming in on the back of a truck then flying through the air business

4. Do What You Can Yourself

We’ve saved so much with the initial project of getting the cabin onto the property and more recently with the extension renovations just by doing what we can ourselves. Mr BirdCat has had experience with a number of different trades over the years which means he’s been able to do a fair bit, or be a knowledgeable second set of hands to the tradies that come through. We also tried to do as much of the manual labour as we could, things like digging holes, filling trenches, things that we didn’t need to be experts in to be able to do. That being said, good contractors pay for themselves and we didn’t skimp on the important things, especially regarding safety. There’s no money savings if the extension falls in on itself, or there’s issues with the power, etc!

An earlier stage of our extension — Pretty sure Milo thinks he did this himself

5. Live Within Your Means

This goes hand-in-hand with creating and sticking to a budget that works for you, but I feel deserves it’s own point. There is no point having visions of grandeur and acting on them, only to find that we’re falling into debt. I’m guilty of wanting to keep up with the Joneses and have really had to work on suppressing that because I know it doesn’t go along with the lifestyle that I like. Social Media can be a terrible trap for that as so many folks show their perfect lives and it can make me want to have that life too…and quite often it could be replicated with the right amount of money! I also know though that that isn’t going to make me truly happy. Our place might not look pretty, but it’s practical and within our means. With a baby on the way, it can be so tempting there too to splash out on all the pretty things…but that wouldn’t really do much more than make us temporarily happy, and then have a long term effect on our budget and long-term goals.

Borrowing money on a credit card would let us have so much right now, but in essence that would just be stealing from our future selves. Do we really need all that stuff anyway?

Milo doesn’t have many wishes in life…good cuddles, good food, and something to hold in his mouth! Very happy here having found his op-shop kangaroo toy that had been missing in the paddock for months.

6. Build Assets

This is especially helpful if you’re in the same situation as we are and don’t own your own property with the potential of moving down the track. We don’t own this land and don’t know how long we might stay here, so anything we do could potentially be lost. That doesn’t stop us from planting trees, building sheds out of salvaged materials, and the like! When we were living in our rental we planted dwarf trees in large pots which are now in the ground. Our house itself we own outright and though it would be a pain to move, we could do that, or sell it down the track, so it has become an asset (let alone giving us a place to live right now!). Another asset is the garden itself — we may not be here forever, but vegetables for example, have such a short growing season compared to everything else, and are great for our wallet as they lower the amount of groceries we need to buy while also providing us with healthier options than we could get in the supermarket.

The biggest asset that we can build right now and definitely take with us is that of our own learning. We live on a small space homestead-wise (about a third of an acre, plus an extra two thirds of an acre we’re borrowing at the moment for our sheep) but that just means we need to become more creative when it comes to garden and all of that. If we can use this time to make our mistakes and learn on a small scale, then perhaps if one day we’re able to move to a bigger scale we’ll have a lot better idea of what we’re doing.

7. Enjoy Where You Are

Even if you don’t have the homestead of your dreams, even if you’re still in the stage of paying off your initial debts, that doesn’t mean you can’t enjoy where you are! It can be much easier said than done sometimes, but the more we can be content and make the most of the current situation, is generally the happier we’ll be. We’d love to have a sprawling acreage with enough space to fill all our dreams, but that is not where our lot takes us at the moment. It’s great to have a goal which we’re saving for, but I’m not sure that we would be any happier by going into debt over our heads just to get there. Not everything needs to be done at once — in fact, it’s actually been quite good not to have everything done at once for things like our cabin and extension projects, as it has meant that we have the money saved up by the time the next bill comes in.

Living debt-free also helps us to enjoy where we’re at right now. Without anything over our heads, we don’t have to worry so much and can spend extra time doing the things we love. By enjoying where we are even though it may not be perfect, we can avoid the temptation that credit cards and the like might bring.

Enjoying the view from our new extension doors

Thank you so much for reading this far, and I would be so happy if this post helps even just one person their journey too. Please feel free to leave a comment below if you have any tips to share with me or others as well, and have a fantastic day no matter what road your journey is on ^_^

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