We are frequently asked the question “How much does it cost to start a homestead?” The answer is not a simple one as it can depend on an unlimited number of variables. That said, we thought that we could create a living page that we update monthly with our homestead expenses for both our own benefit and to help others understand the various costs associated with starting a homestead from scratch.
How to Use This Page
This page will include an overview of monthly expenses over time, but you can also click on each month for a more detailed report on where the money was spent. Homesteading expenses come and go, and there are a lot of costs in the beginning that allow you to live a frugal month later own down the road.
Jump right into our expense reports below or jump to more information to learn more about the goals for this page, which expenses we’re tracking and how you can contribute.
For a detailed explanation of what each category entails, click here.
For a detailed explanation of what each category entails, click here.
More Info About This Page
What are our month-to-month living expenses?
Our expenses look deceiving because we’re investing a lot of money right now into our property, as you will see in the detailed monthly reports. That said, our month-to-month expenses are becoming quite predictable and they are as follows:
- Land payment: $357 (hope to pay off within the next 1-2 years but can take 15)
- Land taxes: $43
- Generator fuel: $150
- Generator payment: $200 (0% interest, strategic decision to not pay this in full but will pay it off within next year)
- Propane: $35 (much lower in summer)
- Gasoline for car: $50 (we don’t drive much since we work from home)
- Food: $500 (hopefully we can significantly reduce this when we start gardening / hunting / canning / storing food)
- Water: $1.50
- Laundry: $20
- Internet: $65
- Storage unit: $60 (will go away when we have our barn built)
- Car payment: $187 (hope to pay this off in next year)
- Car insurance: $78
- Other: $100 (household items, postage, clothing, other random stuff)
As you can see, our month-to-month expenses aren’t terrible. When our land, generator and car are paid off, that will lower our monthly expenses significantly. We will then be able to invest in things like solar which will be expensive, and even starting a garden, but will save us money over time. I don’t know that so long as the current financial system is in place that we will ever have no need for money, but the idea is to be much less dependent on it. Even if we are spending money, at least it is on things that make us more self-sufficient.
How do we make an income?
We make an income various ways, but most all of our efforts go towards creating residual streams of income. We don’t do dollars-for-hours work, but work on things that will produce money long-term, whether or not we work. This strategy has worked well enough that we were able to take six months off from working and we continued to have our basic expenses met.
You can learn some of the ways we make an income online in this post. Don’t be fooled… making money online isn’t easy, and if you try to research it, there are a lot of scams out there. Scam-free, it’s really, really tough work. We work our butts off (often 14-16 hours / day when we work, for months on end) but we feel it’s worth it.
Between a rental property, payments from a business Jesse sold and our residual income online (various websites we’ve built that produce an income, a product we built that still gets sales, and a rental service we offer), we have a reliable $2,600+ coming in, whether or not we work. On top of that, we also keep our eyes open for opportunities to make money the less-passive way because we will need significant amounts of cash to develop our property. We take on a very small number of marketing consulting clients yearly, provide some online services, and are working on flipping a few of our websites that we own (hopefully for a lot more money than we put into them). Again, no walk in the park, but it works for us and is very aligned with our life goals.
Best of all, we can both push this work along so it’s not one of us working more than the other. This is also strategic because there may be times when one of us is unable to work as much, or is just burned out. We like to think that we are a one-income family rather than two which we feel will give us more flexibility.
Why are we tracking our homesteading expenses?
- Track our own expenses so as to be aware of our spending: It’s always great to review what we’re spending our money on and why. This can help us to identify patterns and opportunities for substantial savings, or better investments.
- Share our expenses with others: For others that are interested starting a homestead from scratch, it can be helpful to see which expenses you may incur.
- Demonstrate that homesteading can be done in a reasonably tight budget: We do have an income but we also are working with a tight budget. You don’t need to be a millionaire to start a homestead, just need to pay close attention to how things are done.
- Share with others what we’re buying: We hope to share how we found certain materials or tools and what we paid for them so that you can try to do the same or even better.
- Demonstrate that one need not have a substantial income to begin a homestead, live off grid or own land: Our income isn’t grossly large but we are finding a way to make homesteading happen.
- Show others how to create and manage a budget that will help them adjust their spending habits to fit the lifestyle they want and allow them to finally realize their dreams: Many thing that to achieve their dreams they need a boat load of money, but that is not usually the case. Dreams can be achieved on a very limited budget, but you do need to become aware of your own spending and learn how you can make your money work for you.
- Challenge ourselves to be proper stewards of our finances so as not to jeopardize our journey: Even though we have a fairly good grasp on where our money goes any given month or year, it really helps us to sit down monthly and pick over our finances with a fine-toothed come. Often, we think we spent more or less money than we did but numbers never lie.
- Document how using alternative buying techniques can save you phenomenal amounts of money: We are challenging ourselves to not buy everything brand new as there can be substantial savings in alternative buying techniques such as buying materials used or even bartering. We are not opposed to buying new things, but want to make sure we’re carefully weighing the pros and cons of each option.
- Demonstrate that using time, not money, can change how you think about money and the job needed to earn it: Many materials we gather ourselves rather than spending our time working jobs to earn money to buy the materials. It’s not always best to use time instead of money, but it is another option to be aware of and have in your tool kit.
- Demonstrate how having time available to capitalize on opportunities often missed by people who are too busy can save you more than you could earn in an equal amount of time: Many of the tools or materials we collect are at a huge savings and that’s because we have time to take advantage of good deals. We hope to share with others how being available for opportunities can save you a lot of money on your homestead throughout your journey.
Which homesteading expenses will we be tracking?
For the sake of these expense reports, we will be categorizing the expenses based on five types of groups.
Household: These are basic expenses that are required to run a household including groceries, cell phones, clothing, cleaning items, household items, eating out, coffee, and things like that. These obviously will vary drastically from household to household depending on a number of different factors.
Utilities: In a normal household, these are typically power, water, gas and maybe internet. Living off grid without a fully-developed home, it includes fuel for our generator, water, showers and even laundry.
Land / Development: These are expenses including our land payment, property taxes, and any development we do to the property such as septic installation, paving a driveway, etc.
Consumables: These are things that need to be purchased but don’t really last so they can’t be considered an asset. Some examples are screws, antifreeze, caulk, paint… things that you consume and then they are gone!
Assets: These are frequently larger expenses that only need to be made once (or at least very infrequently). These are things such as tools and reusable building materials.
We may adjust these definitions periodically as we refine our tracking and how to make sense of it all. Ideally we’ll begin creating an expense log so you can get a realistic idea how much money is needed at each stage or starting a homestead.
How can you help make this page better?
We hope you’ll take a moment and share with us any ideas you have on making the page better, easier to understand or information you might want to added. Ideally this page will be simple to update and easy for folks to grasp so while we might be able to add many features we want to keep it basic and straightforward.
Feel free to leave comments below! While we want to document our expenses for our own benefit, we also want to be sure that we are presenting the data in a way that is easy for others to understand as well.