What is Your Homestead $ Number?

Tony Colella
17 Min Read


A while back, there was a commercial that had people walking around carrying “their number.”  The number represented the amount of money each person would need in savings in order to live the lifestyle they desired in retirement.  This effectively pointed out that everyone had a different number, which implies that each had a different idea of how they wanted to live once they reached their “golden years.”

The reality of homesteading life is that you don’t have to wait until you retire to realize your dreams.  You can create these dreams now; by slowly implementing more and more self-sufficiency into your homestead, you will require less and less money in that retirement account.  In affect, you will be lowering your “number” with each self-sufficient project you implement.

You won’t need some huge dollar amount stashed away in various bank accounts.  You won’t be left hoping these investments will kick off enough interest and dividends to provide you with money to live on while not dipping into your principle (cash invested).  So many things can affect what your investments will produce.  I know very smart retirees who conservatively estimated their retirement lifestyle based upon a 6% return.  Now that the recession has arrived, most of those investments are earning less than 1% per year.  Unless they adjust their retirement spending, they will have to dip into their cash savings, which leaves fewer and fewer dollars remaining to earn interest.  Many of these retirees may have to return to work late in their years just to provide enough income to live on.  My grandfather became a Wal-Mart greeter in order to make ends meet after he retired.  He was a wonderful grandpa but not a great financial planner, unfortunately.

How Much Does Homesteading Cost?

As homesteaders, we invest money and time in our homesteads and ourselves in order to reduce expenses now and well into the future.  Let’s use the installation of a woodstove as an example of a homestead/self-sufficiency project you can do now.  Suppose you were heating your home with electricity this past, frigid winter and, like many Americans, experienced far higher than average heating bills.  If you had a woodstove and your land provides you with trees that you can turn into firewood, you may well eliminate a good portion of that winter electric bill, but it will cost you money (investment) to buy and install that woodstove.

With the stove installed you are beginning to reduce your “number,” now and into retirement, not to mention enjoying a much warmer home! The amount of money invested in the woodstove will be far less than what you would likely have to save and invest to kick-off the same amount in interest payments each year.  Let’s say you were to go so far as to spend $2,000 to buy and install a woodstove in your home.  Let’s say that this investment saves you $200, or more, a month during the winter.  In a couple of years this stove will more than pay for itself, but consider the alternative.  How much money would you have had to save and invest in order to provide that same amount of winter-month savings year after year?  How long would it take you to save up that amount?  This investment saves you even more when you consider what future costs of energy might reach.  You can ponder those costs as you sit around your warm woodstove during a power outage in the middle of winter.  In my opinion, that’s spending some self-sufficiency time in style!

As you become more and more self-sufficient, you may realize that with enough of these “investments” you won’t have to wait very long before you can retire.  You will have such a low “number” that it won’t take long to create it or put it into savings.   You may need some income as part of that number and some folks choose to semi-retire by working both on and/or off their homestead.  There is no right or wrong way, just what you decide is best for you.

Challenge yourself to think outside your comfort zone.  Begin by picking one monthly expense that you expect to face each month for the rest of your life.  Figure the average per month for the past few years and then find a way to lower or eliminate that number from your monthly expenses.  This savings decreases the number of years you have to work and save to create a nest egg large enough to live off nothing but interest (and hope that the economy doesn’t erode that principle or its ability to earn interest).

When you are dreaming of what your homestead might be like someday, consider your expenses and how that homestead can set you free from them.

Save Money By Homesteading

Start attacking each line-item in some way now so you can secure your homestead and retirement sooner rather than later.  For most of us, our monthly expenses look something like this:

  • Rent or Mortgage
  • Taxes
  • Insurance
  • Car Payment
  • Gas
  • Phone Bills
  • Internet Access
  • Electric
  • Water/Sewer
  • Trash
  • Clothing
  • Food

Mortgage and rent can be eliminated in many ways but I suggest buying a mobile home with land for very little money and turning it into a dream homestead.  Real estate taxes are typically much lower on these types of properties as well.

Property insurance will be less because the value of the property will be less.  Owning your assets free and clear may give you the comfort level of not having to insure everything you have against every conceivable tragedy.  Think about it, what would it cost you to replace your old mobile home with a newer-model, repossessed mobile home?  I have bought many for far less than $5,000 and if you are, in fact, buying a newer mobile home, chances are it will be bigger and nicer.

Buying a good, used car is something you can do right now.  Pay cash or pay the car off as quickly as possible so that you won’t have that monthly payment hanging over your head.  Consider what type of vehicle you will need for your homestead.  Remember you will be doing farm chores with this vehicle so a pickup truck is certainly worth considering.  A good, used car that gets decent gas mileage is probably your best bet for now.  You won’t know exactly the size or type of truck (four-wheel versus two-wheel drive, for instance) that you need until you find your homestead land.  After paying off your good, used car you can set aside that monthly payment to save up for that homestead truck.  These older vehicles will also help reduce your insurance and tax costs (many states have a personal property tax assessed on your vehicles each year).  If you don’t have to commute to work from your homestead you will quickly realize a savings in gas but you still might want to look into diesel vehicles as an alternative.

Phone bills: Cell phones companies have gotten more and more competitive and the plans have gotten better and better.  There are internet phones available now, that only cost $19.95 per year (not counting the internet access).  This type of phone or a low-cost cell phone may well suit your needs for less money than a traditional landline, although I wouldn’t be surprised to see landlines dropping their prices enough to make them more competitive.

Rural Internet access: One problem we ran into when we bought our homestead was that the cable, telephone, DSL and any other company we tried would not come out this far.  I had to go with satellite internet, and so far I have been very, very happy.  The cost is quite competitive and offers wireless access for our laptops.  I have to admit a weakness for the internet.  I spend a great deal of my project time researching how to do things before I start the project.  This reduces my learning curve a great deal as well as my material costs by doing the job right the first time.

Electricity: There are so many great articles and books written about how to reduce and/or eliminate our use of electricity as well as how to provide our own electricity via solar, wind and other power sources that I could not do them justice in this article.  Suffice it to say that you will not want for detailed info on this subject.

Water and sewer costs kept going up and up in the city where we lived.  We now have a private well and a four-bedroom septic system as well as land enough to make repairs to the system if necessary.  The septic (sewer) costs us nothing per month, unless we should choose to set aside a few dollars each month towards a future pumping of the tank (currently it costs about $125 to pump a septic tank in our area).  Even if we pumped the tank every two years this would cost us less than $5 per month.

Water is provided by our private well, which costs us only the amount of electricity necessary to run the well pump.  We have installed in-line water filters and will replace them as needed.  We will spend a few dollars per month on replacement filters and set aside some cash in the event that we should have to replace a well pump.  If we did not have this cash we would consider this type of repair costs as a good candidate for a credit card, to be paid off as quickly as we can afford.

Trash: In our area, many people take their trash to the transfer station at no cost but I do realize that not all local governments are this understanding.  I personally pay for trash pickup at a cost of less than $15 per month with weekly trash pickup.  For me, this is a convenience and I admit it.  I honestly could argue that I would likely spend almost that much in gas if I did use the transfer station but you might choose differently.

Clothing: Most homesteaders I know are price-conscious shoppers.  They look for bargains on clothing and are more likely to buy from a thrift store than a retail chain but if the chain has a good sale on something they need, they stock up.  The cost of buying durable, homestead clothing is very little when you realize that you will be getting these things dirty immediately so expensive clothing will not be necessary, nor preferred.

Quilts and other homestead crafts not only provide good use but often are passed down from generation to generation.  I have to admit that nothing is more relaxing than to chat with my wife while she knits or crotchets by the woodstove on a cold winter’s night.

Food: I think that growing one’s own food is probably one of the most common motivations for folks to homestead.  So many of us want to know exactly what did and did not go into our food.  The quality of our food and the pleasure we take in the toil of providing it is the center of many of our homestead dreams.  We may only provide a portion of our entire diet but each little bit adds up to better quality and hopefully less dependence upon food providers whose costs we cannot control.  When oil and gas prices climb so does the cost of transporting all that food to grocery stores.  These higher costs have to be passed on to the consumer.  If we grow our own food we can separate ourselves from much of the fluctuation in food costs.

I have found that a few chickens cost very little to feed and even less if they are able to free range in a protected area.  The eggs they provide are wonderful and can be used for food or bartering.  I have had hens in suburban settings and found that they were no fuss at all.  I don’t think any home should be without a few chickens.

We have also raised meat rabbits, which is one simple way that all of us can provide our families with affordable, healthy meat that is raised humanely and not tainted with chemicals to keep them “big and healthy“.  A few of these rabbits can provide plenty of meat with very little effort on our part and very little cost.  You don’t need much room to raise a few rabbits and a few chickens.  I know of one lady who successfully raised both for years in her basementRaising dairy goats or cows for milk (and meat) is another common homestead dream.  All the milk and dairy products, as well as soap, leads our homestead minds to consider all the possibilities that could further reduce our reliance upon commercial food providers.

We never know what the future may hold.  We don’t know if we will be healthy enough in our retirement years to begin building our dream homestead.  We don’t know what the cost of land, construction, energy, food, et cetera will be those many years away.  By starting now to reduce our “homestead $ number” we reduce our exposure to expenses and begin to set ourselves free.  The sooner we make these changes the better able we are to compound our efforts into a more self-reliant and less expensive “retirement” both now and into the future, making our “golden years” truly… golden.


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