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Budgeting for farming equipment

Whether you’re thinking about a tractor, new fencing or other farm equipment, spending money on your farm is important to keep it going. But budgeting and saving for a year can be hard when farming income is unsteady.  

This page has steps you can take to help you manage your money, and prepare for buying equipment that your farm needs.   

Decide what you can afford

Try to be realistic when deciding what your farm needs and what you can afford. 

The farming sector is unique in how the family farm and the household budget are linked. In some cases, there may be no separation, which can make budgeting and planning difficult. You’ll need to do a farm budget and a household budget to see how much you can save for equipment. Your household budget will show how much money you: 

  • Spend each week or month or year 
  • Can save to buy farm equipment 
  • Can cut back on spending 

If you’re struggling to pay your bills, read more on how to tackle your debt or contact MABS

You can use our budgeting tools and read how to budget for help with doing your household budget plan.  You can also read our blog Budgeting on the family farm for farm budgeting tips. 

Decide how you’ll pay  

You may decide to take out a loan for some of the cost of the equipment or to save up over time. 

Borrowing to buy farm equipment 

If you’re thinking of borrowing to buy farm equipment, you need to be careful as the loan that looks the cheapest may not always be the lowest cost. There are many different ways to borrow for farm equipment, so we strongly recommend you get advice on the best product for your situation, and understand the consequences if you cannot pay later. Read about what to do before you borrow for more information.

Saving to buy farm equipment 

Before you start to save, your budget will help you decide how much you can afford to put aside each week or month and for how long. This will help you to set a savings goal. 

Set a savings goal 

Once you know how much you can save each month, you need to set a savings goal. Paying with cash is normally the cheapest way to buy farming equipment, but sometimes you need the equipment sooner than expected. Even if you can’t save the total amount, try to save as much as possible. This way you will be spending less on loan interest.   

To get your savings goal, take the following steps: 

Decide: 

  • What farm equipment you need 
  • How much do you need to save (total cost or smaller amount) 
  • When you need to buy it   

Divide the total cost of your farming equipment by the number of months you can save before you need to buy it. This will give you the minimum amount you need to save each month to reach your goal. 

For example, if your equipment is costing €3000 and you start saving 15 months before you buy the equipment, you’ll need to save €200 a month. If you start saving 12 months before, you’ll need to save €250 a month.  

When deciding how much you need to spend, don’t forget to include ongoing costs like maintenance or repairs. This will help you to pay for costs that might pop up later. 

How to save 

Once you’ve decided to put aside some money each week, put the money into a savings account in the post office, credit union or bank. This way you cannot access it too easily.  

It’s important to have separate bank accounts for your farm and household to keep track of what money your farm is making at any time. 

Tips to reach your goal faster  

Even if you have enough income to pay your expenses and save, you might need to lower your costs or increase your income to reach your goal faster.   

Lower your costs by: 

  • Cutting out all non-essential spending (both farm and personal spending) 
  • Finding a better deal on your internet, gas or electricity 
  • Reviewing your loan repayments  
  • Reviewing monthly pension, savings and life assurance payments  
  • Asking all family members to help out if possible 

Increase your income by:  

Read more tips on how to build up your savings

Farming support organisations 

For advice and support you can contact: 

Citizens Information has published a booklet on supports for farmers (pdf)

Get more help from MABS 

If you’re struggling to manage your money or you feel like borrowing more is the only solution, help is available.  

MABS can help with general money management advice and can support you to: 

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