From Broke to…Less Broke

12 years ago our little K car died in Jerseyville leaving us stranded in the dark and cold. I don’t know what we were doing out on a cold January evening. I can’t begin to imagine what we thought we needed. I do know that I had a job, we had a mortgage and we had an infant son and an old maroon K-car that my great aunt had either sold or given us. 

Money was tight and we didn’t have any cash on us. If money was so tight, why were we out? I don’t know. Maybe we just had to get diapers or something. But it was clear that money was tight – extremely tight – because Julie went to Arby’s to get warm after the car died and couldn’t afford to buy anything. Maybe those were the days before fast food restaurants took debit cards. Anyway, she attempted to nurse the baby in some privacy in a booth and couldn’t even pony up to buy a glass of water and her milk never let down without a drink of water.

I had a job that payed the salaried equivalent of $1o/hour. I made more with that company when I traveled for them and I guess we got used to spending the travel pay because when we had our first son and I came off the road everything got tough for us. I had to find a new job.

The car was seriously broken. Dad came to get us, a friend helped me haul the car home the next day and I began tearing down the engine in the garage…I think the head was warped.

That was a cold winter. Cold days and nights taking my car apart, hoping I could put it back together. Knuckles sore from holding cold metal in my hands. Soon I had the parts back, the engine together. Something else broke and got fixed. It happened a couple more times before I began a new job in St. Louis on Feb. 26 of 2001. I got myself a 50% pay increase!

For the next 7 months I drove that jalopy back and forth to St. Louis to a very challenging job with very challenging hours. I had to be in the office at 6AM, the beginning of the contracted support window for clients in London. That meant I had to leave home at 4:30. Shortly after starting my new job they put me in the on-call rotation complete with two different 25 pound laptops and a big, heavy book of contact information. There were many nights of being on call. Lengthy calls with phone techs in Southern California hospitals. “Was the machine a Nightshade or a Portland? Windows NT or OS2? Is CP running? Telnet into the attached device. Type in ‘A01RC2’ and press Enter.” Over and over. Night after night. Up again, home again, phone is ringing again. The primitive cell phone they gave me only worked in one room of our house…in one position, furthest South on the couch. I can’t say the work was entirely unpleasant but it was certainly demanding. I went without sleep but I learned a tremendous amount in a short time.

Toward the end of month 6 my 4-cylinder car decided it wanted to be a 3-cylinder car. I’m really not much of a mechanic. I just did what had to be done to make it last as long as I could. We reached a point where I just couldn’t fix it anymore. Shortly after 9-11 we bought a new car with a warranty! A Warranty! That was a financial mistake but we sold the car at 235,000 miles and I only rotated the tires and changed the oil. The Ford mechanics did the rest.

I excelled at my job. I was a total hack when they hired me but I learned quickly. My dad sometimes asks how I learned to do what I know how to do with computers. I guess there are two answers. First, I was hungry. Second, I was thrown into the fire.

So now we are at the point in the post where you ask the question, “What does this have to do with farming?

Everything. Stay with me.

11 years ago I had the beginnings of a family, a $35,000 mortgage, $14,000 in school loans and a $15,000 car loan at 0% . I know because it’s all in my diary. Yes, I tell my diary about my money problems. 29% of my after-tax income went to the car payment and associated car expenses ($300 gas, $308 payment, $86 insurance, $24 maintenance). We regularly bought hamburger helper and Eggo waffles and cereal…foods we can’t imagine eating today both for health and budget reasons. Magazine subscriptions, clothes, toys for the kids…I don’t even know what all we bought. Little things that by themselves were not harmful but together? Remember that big raise I got when I changed jobs? We spent it. All of it. The next raise too. No matter how much money I made we managed to spend it all. We went from below the poverty line to relative comfort but totally strapped for cash.

All of those debts and more are behind us because of that diary. We snowballed our way through them one at a time, paying one off to accelerate payment on the next. The house was the worst at 8.5% but because of the loan amount it had to wait till last. The car was at 0%, four school loans averaged $80/month and 4%. We picked one of those to target first, lowered our car insurance to $75 and went on the attack with our food budget. Really, we found and plugged so many financial leaks life suddenly got easier. Why hadn’t we been paying attention to where our money was going?

Skipping the details, we quickly got far enough ahead we bought a second house (mistake), moved there (bigger mistake) and sold the starter home (relief). After a few years of remodeling the new home it was time to move again. Then we moved again. Now we are at the farm.

Every few years we have to re-learn the lesson we first learned 12 years ago. It is easy to spend all of our money. For instance, our first winter here, we were used to having the house at 74 degrees. Natural gas was super cheap in the suburbs but propane here is expensive and the house is drafty. So we licked our wounds and turned the thermostat down to 57. Everybody put on a sweater, we put a space heater in a small room and we did all right. Once we got the wood stove we were back to normal. But that first winter was an expensive lesson. Based on recent writings it should be obvious that I’m in the middle of a financial lesson again now. But the other thing I take from this is that it’s really not that hard to fill in the holes I dig myself into…as long as I can work. But how much longer will I work? One of these days I’m going to be 80. How will I have time to cherish my grandchildren if I’m still a database janitor at age 80?

If you intend to hold on to your farm for any length of time at all you can’t keep falling into the spending trap. Like any other crop, you have to make your money grow and protect it until harvest. But even then you aren’t done. Once that newly harvested money is in your hand there are any number of ways the world seeks to take it from you. Just a little here…a little there…like mice stealing grain. Enough mice and you’ve got a real problem. Imagine inflation acting like mold, decaying your crop over time. How do you protect against that? We have to be diligent. Banks aren’t paying to hold money today. CDs aren’t worth buying. Land and cattle are near nominal all-time highs. How do we grow money in this environment?

These are the problems we have to solve. This is where we have to apply our time. Plug the holes in your budget and you might be surprised how quickly you can buy that dream farm. Forget to plug holes and you might be surprised how quickly you will lose it.

I have to add, too, that, like the job change listed above, when you finally get your land you will face a steep learning curve. You can do it. It will be tough but you can do it. Being both hungry and in the fire will do wonders for your work ethic. Just keep focused on minimizing expenses. Financial stress ruins relationships. Keep your expenses few and you’ll have an easier time focusing on your goals…especially your relationship goals.

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7 thoughts on “From Broke to…Less Broke

  1. I’m knocking on wood saying if I ever get out of debt I’m not going back. 7 more years on student loans 14 on the mortgage. Lord knows if we can get either paid off earlier but we’ll try.

  2. We got caught in the mortgage/refi mess of a few years ago. We will never pay off the house in our lifetimes unless we live to 100. So we are in essence renting our own home. Maybe one of the children will take over someday. We though are moving on to another adventure in the near future. And trying not to spend along the way. Thanks for the reminders.

    • I can’t imagine that Steve. I really can’t. I sympathize with your position and you sound like you are frustrated…feeling trapped by prior choices. I don’t fully understand your situation but without hesitation I can declare that God is bigger than your financial problems. He has a plan for you…to prosper you and not to harm you. God is blessing you. Everything you have is His. Go and multiply your master’s things. It won’t be easy but it is nice to hear, “Well done…”

      You joked about living to be 100. What if that happens? What if my generation lives to be 150? Talk about a strain on the Social Security system! I could be retired for 85 years! Hope I’m useful for the bulk of that time.

    • Thanks Charles.

      That quote is of particular importance to the multi-generational aspect of our farm. I can look out the window to my right and see the memorials to men and women who were here before me. Though I didn’t inherit the farm, the fact that there has been an unbroken chain of ownership for 170+ years means those memorials mark people who managed their finances well…or well enough. I can look behind me at my children and see what is coming next. My kids have to be taught to avoid simple financial mistakes if we are going to make this farm continue. Each generation has to learn this anew. Money is too easy to spend.

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