in the FPU class a year ago, was that we found out we were only at the middle of the pack for the amount of debt owed by the members of the class. We already felt at the time that our overall debt load then was suffocating – approx $35K. But that was chump change compared to some of the other members of the class. I was particularly mortified to learn that farming families in general have been snowed into the belief that it’s OK to finance massive amounts (hundreds of thousands) for the sake of herd improvements, building improvements, equipment improvements, etc, and that debt burden will just magically go away as we succeed at this fabulously profitable farming industry (I trust you can all hear my bitter laughter at that one). Yes, money can be made farming, but not when you start off hundreds of thousands of dollars in debt. And folks wonder why young people don’t want to get into the profession.
Our own comfort level about debt has definitely dropped over time, which is as it should be. We’re down to about $25K at the moment, with my sole credit card still representing the bulk of that amount at $15K, +/-. We have a smaller debt at $5K and our tax bill also around $5K. We’re paying off the tail end of our first snowball debt within the next two months, and then that amount will go towards those three bills. It’s possible we’ll pay them off within 2013, but it’ll be a real push to do so. One of my planning tasks these last few weeks, and extending into the winter months, is to calculate what changes we’d need to make on the farm to bring in a higher amount so we can pay that off faster, without incurring more debt to do so. Farmers buying with cash is the rarity, but I’m glad to finally be in that club. It’s the right place to be. I just feel for the folks who still think their answers will come from chasing a good credit score, and keeping a ‘healthy’ amount of debt. Alas, DR has yet to reach them…..