No matter what you do, from time to time, unexpected expenses come along. They are things you can’t plan for yet need to be prepared for anyway. Many of these are financial challenges, from equipment failures to large vet bills and building repairs. It is great to have a stash of money in the bank to cover these expenses, but sometimes you just need financing.
However, it is not always best to mortgage the assets that you own. That can lead to catastrophic losses if you lose things you need to keep your farm or ranch working. While you never want to default on a loan, sometimes financial circumstances get away from you, and things get worse before they get better.
How do you do it though? How do you get the financing and the money you need without giving away the farm? Here are some tips for common situations and expenses.
Horses, Cattle, and Dogs, Oh My
One of the biggest concerns on a farm or ranch is a large, unexpected vet bill. For families, this can be devastating as well, but the larger the animal and the more of them you have, the more likely it is that you can end up with a really large vet bill to go with them. What do you do to pay for it?
- Pet Insurance: For the pet bills, like the dogs and cats, you can actually get pet health insurance. Like people health insurance, it will help cover usual well visits, but is also there if something life threatening happens or if your dog needs surgery for some reason.
- Livestock Insurance: The USDA makes livestock insurance readily available to farmers and ranchers to help cover issues with animals like horses, cattle, and other livestock. Check with your insurance agent as well.
- Personal Loans: For those expenses that go beyond insurance, you can get a personal loan from various companies that is both unsecured and affordable. Besides these sources for personal loans, you can also check with your bank or credit union.
- When it comes to expenses related to animals, there are a number of sources of funding that have nothing to do with mortgaging your assets and risking giving away the farm.
Growing Education Needs
As your children grow older, they may want to go away to college. Even if you are a young rancher or farmer, you may want to consider getting a degree yourself. The business of ranching and farming is changing, and there is more technology involved all the time. A degree can actually do you a lot of good, from business to nursing to veterinary medicine.
As for your kids, sending them to school is another matter, but you can still get college financing a number of ways without giving away the farm. Here are a few of them:
- Fill out a FAFSA every year. The Federal Application for Student Assistance is a must for any student, even if you think your child will not be eligible for grants. There are scholarships that are also available, and the schools you send it to can often customize aid based on both need and abilities.
- Research student loans ahead of time. Even before you need them, you can qualify for private student loans for your student even without a cosigner to make sure you are prepared for the upcoming school year.
- Understand your circumstances. If you are a non-traditional student returning to college yourself, there are often scholarships, loans, and even grants available to you that other students may not be eligible for. If you are a veteran and have not used your G.I. Bill, you may be able to give it to your children if you meet certain qualifications.
- College is expensive, but you do not have to foot the bill entirely by yourself. Instead, explore all the options out there, and make sure you are getting the most out of all of the programs offered to you, so that you can keep the farm and keep your horses while you are in college. Leveraging the assets that you own should be your last resort.
Finally, there are simple things that no one can do anything about. Drought, wildfire, heavy snowfall, rain, flooding, not enough snowfall, and heavy rains can all be a factor when it comes to ranching, raising livestock, and keeping horses. These tricks of Mother Nature can easily knock you off balance financially. Here are some tips to get through.
- Make sure your insurance is up to date. There are different types, from flood and fire to other acts of God. Check with your agent and be sure you are up to date and have enough to cover your entire operations. Keep a separate emergency savings. Make this an account you do not touch. Make sure there is enough funding there to cover deductibles and other expenses not covered by insurance.
- Have a contingency plan in place. It is hard to anticipate everything that might go wrong, but have evacuation plans in place, temporary boarding plans for livestock and horses, and make sure you have the resources to accomplish them. For instance, if you will need to transport horses, be sure you have enough trucks and trailer space to do so.
- There are different risks that come with each season. Be sure that you are prepared for those risks at the right time. The more self-sufficient you can be when it comes to power, water, and other necessities, the less distress you will have to endure when it comes to infrastructure failures.
You can handle your finances even in times of crisis without having to give away the farm. If you can plan for the worst, have money in savings and the right insurance, and plan ahead for education, you are less likely to encounter those situations. By doing so, you can make sure your financial situation will withstand the toughest of circumstances.