Young farm families have many expectations to manage as they work on farms as employees, raise small children and juggle time for off-farm revenue. One of the best ways to have less stress about compensation from the farm is to figure out what you need for personal family living expenses.

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Certified Farm Family Coach
Elaine Froese, CSP, CAFA, CHICoach and her team of coaches are here to help you find harmony thro...

Understanding personal family living expenses can also apply to the farm founders, who need a clear understanding of their income stream needs as they step back without stepping away from the farm.

Talking about money doesn’t have to be stressful when you come prepared with the data or “reality check” of what you need. Arguments arise when what you think you need may be perceived as a want. So be clear about what you see as fair compensation.

Recently, I was speaking to a group of dairy farmers and suggested a family of four needs about $84,000 a year for family living. I have found a chart on how to look at your family living expenses in Iowa State’s Benchmarking Family Living Expenses in Agriculture.

On our farm, Wes and I typically use $75,000 annually, which does not include charity or investments, and we don’t have a house mortgage. Everyone’s annual number is their number, but you need some data to figure out cash flow and expectations for family living.


1. Get data

Review your last year’s bank and credit card statements to see what you spent for family living. FCC has a tool called the cost-of-living calculator. Track what you are spending on family living using your bank records and save cash receipts. Find an easy way to keep track so you get good data. Find out what other young farmers are making for income in comparable scenarios.

2. Use Dick Wittman’s compensation worksheets

Wittman’s tool can nail down the wages or salary, and the farm perks of beef, garden produce, boarding horses, housing, utilities, cell phone, internet, pick-up truck, gas, meals, etc. Many families forget all the items the farm is paying for. These expenses covered by the business can add up to $14,000 or more of benefit to you as a family.

3. Think about your goals to have equity in the farm business

What debt are you willing to take on to gain ownership of equipment, livestock or land? If your farm wages/salary is only enough money just to live, then you are likely not getting enough compensation to have disposable income for farm debt payments. Before computers and Excel spreadsheets, we kept track of debt payments in a yellow scribbler, and we celebrated paying off farm loans. What are your timelines for being an employee of the farm then moving to being a partial owner? 

4. Talk about money with your spouse

When you share the goals of gaining growth opportunities in the farm business, you are pulling in the same direction. When you fight about what the family needs versus the farm, you need to seek deeper understanding of what you can wait for and what needs to happen now to meet the family’s needs. What investments today will make money? Which debt is good debt? Does your family understand “save” or “wait”?

5. Discuss what the word 'sacrifice' means

Lance Woodbury talks about sacrifice as a gift, a necessity or a crutch. Compensation may be kept low for young farmers as a crutch when the real issue is lack of business financial performance or too many family members working in the business. In other cases, Woodbury says, “Sacrifice is used as a way for parents to avoid hard choices about succession planning and the process of letting go.” I recall founders saying they wanted the next generation to suffer as they had. Where is it written young farm families need to suffer economic hardship to appreciate the opportunity to farm?

6. Block time for a farm team meeting

In the meeting, discuss what is working with your compensation levels and what needs to change. Be clear about what level of wages or salary you need for your family’s well-being.

7. Celebrate how you manage your income well

Share appreciation with your spouse and your farm team as to how you are grateful for what you can accomplish together with the resources provided.

8. Talk with your spouse 

Openly share your concerns with overspending or mindfulness in what you truly need to succeed to accomplish your goals. Discuss what money means to you.

9. Work to have compensation matched to the roles and skills you are providing to the farm

Just because there are two siblings working as employees on the farm, it does not mean their different skills, for example farm labour versus farm manager, deserve the same income. This is a huge conflict I have witnessed when the farm owner is conflict-averse and not fair with compensation for different skill sets. This situation may need mediation and facilitation with a coach.

Every farm family, old and young, needs enough financial resources to live well and grow the business. Talking about money and understanding the money scripts you are living with in your family will create more harmony. Being clear is kind.