Frugal Homesteading Blog

Welcome to the March 2010 Frugal Homesteading Carnival!

Garden
Renee Benzaim presents What is Compost Tea? posted at Compost Tumblers & Compost Making. She notes, “One good way to make compost tea is to soak compost in water in a bucket for a few days and then strain the liquid. You can then dilute it and spray it in your garden.”

Rhonda Grice presents The Benefits of Having A Small Garden posted at UPPER HAND DEPOT.

Belle presents Happy Tree Tapping and Sap Collecting! posted at Homesteaderbelle’s Blog.

Food

Maria presents Blank Menu Planning Chart and weekly menu planning posted at Menu Planning, saying, “Weekly menu planning helps us save money on food and eat better at the same time.”

Wenchypoo presents Rethinking Protein Sources…Again (L-O-N-G) posted at Wisdom From Wenchypoo’s Mental Wastebasket.

Personal Finance

BWL presents Help Budgeting Your Money: Easing The Frustrations posted at Christian Personal Finance.

Peak Personal Finance presents Before You Buy: Practice Home Mortgage Payment posted at Peak Personal Finance.

KCLau presents The Latte Factor posted at KCLau’s Money Tips.

MoneyNing presents Change Your Vacation Style to Save Money posted at Money Ning.

Jasmine Hall presents 50 Best Money Blogs for Women posted at Accounting Degree.com.

Please link to the carnival if you were included!

I’ve never tried keeping bees on my own, but have thought about beginning beekeeping for some time. Local honey is incredibly beneficial nutritionally speaking, not to mention delicious. Additionally, I would be able to harvest honey from my own hives without heating it (raw honey has the most benefits). However, we’ve lived within a homeowners’ association since owning property and while we may have been able to get away with honeybees all along, we don’t really want to test our neighbors’ patience any further — they’ve already been more than kind about our backyard chickens.

My dad has been a beekeeper for decades. He harvested and sold his bees’ honey for many years, but now has retired to backyard beekeeping for the honey and to enjoy his hobby. From his many years of keeping bees both professionally and on a smaller scale, Dad is a wealth of information and wisdom on beekeeping. His insights range from the most practical suggestions to the more philosophical musings. It is my wish to begin a hive of my own with my dad’s mentoring when we move to our next property and are able to expand our homesteading efforts through a larger garden and more animals.

For those who garden for food or have an orchard, keeping honeybees is one way to help ensure that bee-pollinated plants are able to maximize production. One’s own hives are an ideal way to increase self-sufficiency by assuring better crop pollination, as well as with the production of honey: a sweetener, natural antibiotic, allergy suppressant, and key ingredient in many home remedies.

Have you considered beekeeping, as a hobby or for the honey, or a side income through honey sales?

My most recent mortgage statement for our rental property (originally our primary residence)  included the annual escrow review, and I was surprised to see that they projected a shortfall between the escrow expenses (taxes, insurance, and allowable reserve) and my monthly escrow deposits. In fact, the difference was such that the mortgage company was raising my monthly mortgage payment from $691 to $818.

At first glance that did not seem logical to me — we’ve been paying this mortgage for almost 6 years and never had the payment go up like that. Further, our taxes have remained stable the last two years and we haven’t changed our home insurance since we converted it to a landlord policy.

Busy at the moment, I put the bill aside and just returned to it today. After careful, line-by-line reading, I discovered that the mortgage company planned to pay my annual $953 property tax both in May and November — not half every six months, but the full amount twice a year.

Interestingly, when I finally got on the line with a real human being, I was told not to worry because the company only pays bills that come in and they wouldn’t actually pay that amount twice if they weren’t billed accordingly.

“Right,” I said, “But see, I’d really rather not pay an extra $100 a month for a bill that’s not going to come.”

“Oh, that does make sense. Let me connect you to someone who can help you.”

The next CSR greeted me with, “So you want us to pay your tax bill annually instead of semi-annually?”

So I explained it all over again and she re-worked the escrow account while I waited. Turns out my payment would only go up an extra $2 a month once she corrected the escrow problem.

“But there’s also now an overage in your escrow, so would you like me to send you the extra $132?”

I suggested that they just apply $24 to the account to keep my payment from changing and send me the rest.

Pause. “Oh no ma’am, I can’t do that. My computer can’t do that.”

And these are the companies we’re bailing out with taxpayer funds?

We’ve progressed tremendously on our debt snowball since I first posted about using the debt snowball method to get out of debt. When we started using this method to pay off debt (very important for living a frugal, homesteading lifestyle), we owed more than $44,000 to banks, credit card companies, private student loans and a medical account.

Today, we only owe $10,700 (not including our mortgages) and we are counting down each week as we add extra to our smallest debt, as per the snowball method, which is my husband’s private college loan with a balance of just under $4,000.

Psychologically, bringing our total non-mortgage debt down to the $10k range has been a tremendous relief, as now our debt-free success story is almost written.

Paying off debt has also relaxed the tension and pressure in our budget since we have fewer debt payments and in case of necessity, can lower the debt snowball payment to pay for emergencies or unexpected needs.

Progress has often been slow; we welcomed a new baby in 2009, which meant paying for a midwife and buying a bigger vehicle (used, of course, and with cash). This spring, we are saving up for taxes as we expect to owe a few thousand dollars to the IRS come April.

After tax time, our debt snowball will resume in full force and I’ll be adding every extra dollar I can to the debt payments each month with the hope that we’ll be debt free by the end of the summer. I’m so thankful we found Dave Ramsey’s resources three years ago, in early 2007, attended his Financial Peace University program in August 2007, and have not taken on any new debt since that time, even when finances were tight and we had to make hard sacrifices along the way.

If you are struggling with debt payments and are sick of spending so much money on past purchases, it’s time to set up your own debt snowball. Here’s how.

1. List your debts in order of amount, with the smallest debt at the top of the list.
2. Note the minimum payment due to each debt, to the right of the debt amount.
3. Create a budget, or consult your budget, to determine how much “extra,” above your minimum payments, you can spend to pay off debt every month. This is your “snowball” amount.
4. Each month, make the minimum payments on all of your debts, except for the debt at the top of your list — this smallest one gets the minimum payment AND the debt snowball extra.
5. Increase your snowball as much as you can each month. Add extra earnings, gift money, saved money form other categories, yard sale funds, anything you can, to increase how much debt principle you pay off when you make a payment toward that debt.
6. After a debt is payed off, its minimum payment and the snowball are applied to the next smallest debt, month after month, until all debts are gone (except the mortgage) and you are debt free!

Are you working Dave Ramsey’s debt snowball plan? How is it going?

Many Americans are turning to gardening as a way to raise some of their own food over the summer and ease the strain of high grocery prices, which are affecting more and more families on tight budgets. Candace at Garden of Blessings suggests Gardening for Snowflakes, which those clued in to the Snowflake idea recognize as a way to save large and small bits of money to apply to one’s debt snowball or savings fund.

I’ve started more seedlings and container garden plants this spring than any year previously since I left my family’s farm and went to college at age 17. My motivation is part culinary and part financial. If I can grow my own tomatoes, we can enjoy their delicious fruits all summer. But if I don’t, I don’t know if I’ll be able to afford to buy them from someone else.

There are many ways to save money as you garden. I spent less than $25 on my garden last year and had hundreds of plants with an incredible harvest. Maybe I cheated, since a dear friend shared many seeds and plants with me, but you can cheat, too. Here are some frugal gardening tips I’ve discovered along the way.

Free soil. My sister brought me two truckloads of composted horse manure mixed with soil, from the barn where she works. There was no charge, as the owners were happy to send the soil along and make room for new manure.

Compost. We’ve been composting kitchen and garden scraps for years, turning egg shells, vegetable waste and leaves into rich soil. We keep a 2-gallon food storage container by the sink to collect scraps, but you could buy a fancier compost pail if you’re so inclined.

Recycled containers. My container garden includes wooden pear crates form the grocery store, waxed boxes from another store’s garbage, and free pots I inherited from friends and past landscaping projects. I made a strawberry bed using old bricks I found in our yard when we bought the place. I found several old metal pots in someone’s trash pile, and after my husband drills holes in the bottoms they’ll be put to use as planters.

Natural fertilizer. I bought seaweed fertilizer instead of chemical mixes, mainly to remain organic and with the added benefit of saving money.

Rainwater. I recently collected rainwater from our downspouts in several coolers. I stored the water in them for a few days before the garden needed to be watered, and filled my watering can enough times to water the entire garden.

Manure. Chicken manure and horse manure can usually be gotten for nothing or next to nothing from farmers and barns with more than they can handle or effectively compost.

Seeds. A kind friend gave me a large variety of extra seeds, and I bought seed potatoes online. They’re heirlooms, but I got them for less than they were at the large heirloom seeds company, Seed Savers. Save your own non-hybrid seeds form year to year from the harvest and you’ll spend even less.

Are you a frugal gardener? How do you save money as you grow your own fruits, vegetables and flowers?

Are bank runs in our future? While much of the news is being conveniently swept under the proverbial rug, the fact is that many national and international banks are facing problems. As the money supply tightens, and banks see their credit ratings drop, you can be sure trouble is brewing.

As James Wesley Rawles at Survival Blog notes,

A key indicator is the level of bank reserves. Many US banks are now technically insolvent. These banks are on life support, courtesy of your tax dollars. Since February of 2008, I’ve been warning you about the “Non-Borrowed Reserves” figure at the Federal Reserve web site. Bank reserves are plummeting deep into negative numbers. When you look at the U banking industry in aggregate numbers, there are effectively no genuine reserves left. If the average bank depositor was aware of this, then there would already be huge bank runs in progress. But the Generally Dumb Public (GDP), is still blissfully ignorant, and continues to be lulled into a sense of complacency by the long-standing universal depositor’s insurance backed by “the “full faith and credit” of the US government.

Tips to Help Prepare for Bank Runs:

• Keep cash on hand. Do it safely, inconspicuously, and gradually, but having a reserve of cash and small-denomination silver coins on hand is important.
• Get ahead on your bills. Pay your mortgage early, and try to get to the point where you’re paying several months out. So if it’s June 1, you pay July or even August’s payment, having paid June’s and even July’s payment back in April or May. This puts you ahead of the game if you are unable to access your accounts.
• Use a credit union or local bank. Rather than banking with a national institution or large regional bank, choose one that is truly local, r better yet, opt to bank with a credit union which often has higher lending standards and thus is usually more solvent.
• Keep your food and medicine shelves well stocked so that in a time of crisis, you do not need to run out and spend money but can weather a short-term problem with reserves already on hand.

If bank runs or bank holidays do materialize, your vigilence and preparation will pay off. Make small — and big — sacrifices now to put your family in the best possible position for these future contingencies.

Are you preparing your family for financial pitfalls? How so?

Our new pullets have been braving the cold weather and snowy days quite well. In taking care of our not-yet-laying hens, I’ve learned a few things about winter care for a small backyard poultry flock. These tips are for adult birds; any very young birds will likely need to be moved indoors to a heat-lamp-warmed cage in a barn stall or basement,  during the coldest months.

Increased vigilance is important in the winter as natural predators are hungrier and severe weather can cost frostbite on chickens’ combs and wattles (the red flaps hanging down from their faces).

In fact, in harsh climates, the combs and wattles are removed when chickens are young specifically to avoid frostbite in winter.

When keeping chickens through the winter, don’t forget that:

• They need extra feed for increased energy needs. Also, there are few or no insects to supplement the grain.
• A good chicken coop is important — one with insulation, roosting bars and covered openings, such as fabric or plastic sheets over chicken entrances, is ideal. In northern climates, a source of heat is important during the coldest weeks.
• Make sure the birds have water … not ice. When it’s especially bitter out, I crack and remove the ice in their water tray and replace it with lukewarm water a couple times a day. A heated chicken waterer would be ideal, and I’m planning to invest in one for next winter.

Do you have a backyard chicken flock? How are you keeping them healthy and happy through the winter?

On Saturday, we brought home six new laying hens — pullets, really, that will hopefully start laying in a few weeks. These particular birds are Rhode Islands Whites, like the Rhode Island Reds, I was told, just white. While they aren’t as cute as my sisters’ brown speckled Barred Rock mix hens, they will hopefully do the job just as well. This is a mini-flock for us, but will keep us in eggs very nicely with some left over to sell.

Our egg laying chicken operation is a frugal venture. My husband made the chicken coop from leftover plywood, lumber and fasteners. We’ll feed the hens laying mash as well as appropriate table scraps and whatever grass, leaves and bugs they can find as they free range in the spring and summer.

We paid $8 per laying hen and I calculate that with feed included, they will pay for themselves within the first few months and then be a net gain every month thereafter. As this article notes, it’s sometime hard to find laying hens for sale, especially in the springtime. I imagine it will be especially difficult this year. The farmer who sold us the chickens noted that after placing the ad, he has received more call than he can handle for the several hundred birds he has for sale. The woman who rang up my grain purchase at the feed store commented that there has been a big increase in sales for chicken-related items and it’s not even spring yet.

New to raising chickens? Learn the basics on our Chickens page on the main Frugal Homesteading site.

Chickens are fairly low-maintenance. I feed and water them once daily, and shut their coop at night after they’ve gone inside to roost. I’m weary of predators getting in there, even though the chicken yard surrounding the coop is fenced with chicken wire. As my oldest son grows, he will inherit some of the chicken duties and I imagine he’ll enjoying the responsibility of collecting the eggs.

Do you raise chickens? Are you interested in having a backyard flock to save money on eggs or meat?

My husband, a construction contractor, has no more work after he finishes the addition he’s working on. After several years in the business, he is looking for a new job. Several friends and family members who live in our same town are unemployed as of the past few weeks. And then today Survival Blog predicts 2009 will be a doozy, with unemployment rates hitting 30%. Is this even possible? If it happens, what will become of our country?

How did people survive the Great Depression? I’m sitting here in my kitchen, taking stock. We have no reliable income at the moment. My husband is looking for a job. I bring in a secondary income from my blogs and sites, but not enough to cover all our expenses, nor to pay down our debts. And that’s even assuming the income I have stays steady — with online advertising revenue, this is by no means guarranteed.

My brother in law is unemployed, as are several of our friends. With real unemployment seeing higher and higher numbers as each corporation or manufacturer announces layoffs, you have to wonder where all of this headed.I’m not saying we’re in the Second Great Depression … but we could be.

From my research of life during the Great Depression, I’ve come up with some guidelines my family plans to follow as we prepare for a lengthy recession or even a deep economic depression. There are many aspects to cover; this is just a start. I’ll post more on this topic throughout the coming year.

• Minimize expenses. If you have extra money, use it to put your family in the best position possible to survive a potential depression. Purchase tools, necessary kitchen equipment, garden necessities, fishing gear, and other items to help improve your measure of self-sufficiency.
• Buy American. As much as possible, avoid purchasing imported goods and look for American-made products to help our country pull itself out of the recession. You may have to track down companies online and ask local shops to carry American-made goods. The extra dollars spent are well worth it. If we all followed this practice, imagine the outcome. Keep your money here; don’t send it overseas.
• Seek multiple income opportunities, rather than relying on one sector or one company for the family’s support. If your job is highly secure, you’re in a better position, but still look for side income opportunities. If your job is threatened or unstable, build up additional income sources right away.
• Produce and preserve food. We plan to have a large family garden and our own laying hens in the backyard. As local fruits and vegetables come into season, I will pick and preserve my own — strawberry preserves, frozen peaches and jarred apple sauce are all simple to put up from local, inexpensive bounty.
• Stay hopeful, pray for guidance and do not lose the joy of life.

Have hope, but plan for potential long-term economic difficulties in the United States. That’s my take on it. What are your thoughts? Do you know how people survived the Great Depression? Add your comment, below.

Self-employment taxes are only slightly more complicated than filing ordinary income reported on W-2s. I was expecting tax time to be really complicated, but with a little work and some free tax software, it was a breeze.

I filed a schedule C for my 2008 freelance writing income, simply adding up my freelance income and writing royalties for the year. It’s important to keep good records, since smaller clients don’t provide 1099 forms.

Here’s a quick article on how to take self employed tax deductions. While it isn’t exhaustive, it provides a good start and solid tips for basic self-employment tax deductions.

As a self-employed individual, I can deduct 100% of my health insurance premiums as well as half the amount I pay in self employment taxes (Medicaid and Social Security). I also deducted my new computer and half the cost of my internet service, which I use almost exclusively for my writing work.

I do my own taxes, but I highly recommend consulting or hiring a knowledgeable small business accountant if your self employed income is complicated. Also, you can receive valuable advice about payroll taxes, tax deductions, and other specific questions about your particular situation.

At the same time, keep impeccable records throughout the year in order to limit the time and money spent at tax time preparing your return. The more work you do throughout the year (usually just minutes a week) the more time and money you’ll save at tax time.

Self employment taxes are simpler than many realize. Current free tax software (check out TaxActOnline) will even calculate your quarterlies for the next year so you’ll know how much money to send in to the IRS every three months.