Thursday, September 05, 2013

The Family Economic Unit

I wrote a few weeks ago about the subject of debt and trying to avoid/get out of debt. In the meanwhile I have been thinking a lot about the economics of the home and family and how that relates to debt and financial stability. As I look at the world around me I see very little praiseworthy from an economic standpoint. The rich grow richer and more power too them I guess. The poor and the dependent class grow larger every year thanks to a mediocre economy and incentives that generationalize poverty and dependence. More and more families have two wage earners and yet those same families are barely making ends meet. I want something different than the rat race and debt/consumption model for my family. That requires a different look at how we approach economics at family level.

There are two main factors in the economy of a household, income and expenses. The expenses side is fairly self-explanatory, spend less and make do with less. Live more simply. That is easier said than done in our culture that worships the new, the better, the upgrade and the update while consumption is king and debt is always available. But we really can do with less, for example see John Mureiko's recent post More With Less: Clothing to look at just one area where we think we need more than we really do. We are a pretty frugal family in some ways, no smartphones, no cable/satellite TV, we don't go on expensive vacations (or vacations at all!) or buy lots of gadgets or clothes. We don't eat out a ton other than breakfast at the local greasy spoon for my wife and I and the occasional pizza. We don't throw a lot of food away because we feed it to our pig in return for bacon. We have a modest sized mortgage and one small car payment. So we are pretty bare-bones in a lot of ways compared to other families.

That doesn't mean we can't do more. We are looking at our livestock because that has gotten a bit out of control, we have too many horses that eat too much hay and do little in return. We are trying to be smarter about our meal planning, more basic food stuffs to make meals from rather than pre-packaged foods. We are being a bit more picky about driving our Amish neighbors around to make sure that we are get fairly compensated for time, gas and wear & tear.

The other side of the equation is income. We are an anomaly in modern America, a large family with a single bread winner. That is who we are and how we have rolled since 1995 when I graduated from college. I am not sure that is going to keep working. So we have to decide what to do in place of that model and in doing so take an inventory of our family. While we have is some extra space and we have lots of potential labor. With four able bodied adults in the home and plenty of other kids old enough to help we are looking at how we can leverage that to diversify our economic structure. That looks a little light this....

- Multiple income streams

As it stands right now, we are a single income family. We have been since the day I graduated from college and we like that. We are old fashioned perhaps but we think that the family is best served when one of the parents, usually mom, is home more or less full time to manage the household. For us that has always meant that I go to a job somewhere and my wife stays home. That has worked for almost twenty years although it has been very trying for us financially for much of that time. It was especially critical when we had a non-stop procession of babies and very small children in the home. Now our children are getting older, our youngest is almost six and soon we will have 5 of our 8 aged 13 or older. That doesn't mean they don't need attention, just not as much of stuff like feeding and diapering which in theory frees up a lot of time. So we are giving serious thought to how the income end of the equation can change without compromising our core belief structure about having mom at home.

What we would like to see are multiple income streams. We have a somewhat unusual opportunity in that we live among one of the largest populations of Amish in the country and we have very good relations with many of them. This means that we can leverage those contacts to drive them places they cannot readily reach with a buggy, get into business ventures including one we are looking at very seriously and also a bartering economy where we trade their expertise for our technology like cars.

- The home as the economic center for the family

Alongside the multiple income streams, we would like to see the home become the economic focal point of the family. Rather than our home being the place we all go forth from to jobs/schools and then come back to for the purpose of eating and sleeping, we would love to see the home be where we work and where we live. That is how humanity worked for a very long time and I don't think modern "progress" has a whole lot going for it, far more so than the model of families scattering to the winds to chase "education" and jobs leaving families splintered and professional caregivers to take care of young children and elderly parents. Our next door neighbor is a hog farmer, his dad lives on the corner of his property and helps him with the farming still, and does so alongside his grandsons.

- An eye toward the future

Far too often in America adulthood means the kids striking off on their own to make their way in the world and this also often means moving away leading to fragmented families. Little wonder that families don't care for parents when they grow older and so many families put their children in day care. Our future hopefully is one where our kids are participating in the economy of the home and stay near us so that we can help care for their children and in turn can rely on them for assistance as we get older.

Also, what will the economy look like in the future?

Like it or not the United States is headed for a single payer health insurance system. While I think that is a horrible idea it is happening whether we like it or not. Having a job that provides insurance might not be a major concern. Also with a family economy it should be less important to have a million dollars socked away in your 401k. I think these and other factors are going to make the traditional employment model obsolete

That is just a rough plan to start.

We would like to get more property as we are kind of tight on land right now. One project we are exploring pretty seriously would require a new building and that would eat up the last bit of land we have that is vacant on our current property. So if we can get established with a decent income supplemented by jobs by myself and my older kids our next task would be expanding with more property, something that is pretty expensive with high crop prices and a ton of land hungry Amish to compete with! Really our goal is becoming more clear in my eyes and that is important. I really want to get out of the office/cubicle world and spend more time working alongside my family for a whole bunch of reasons and I think we are taking a few of the right steps along that path. You are welcome to follow along as we seek a new path!


Anonymous said...

Hi Arthur,
Working and living from your home should be an interesting journey for you and your family. This is somewhat counterculture I think, but there are families who do this successfully.

I'm thinking of people who have office jobs but they work part of the time from home via secured communication sites, etc.

Lucky you to have some options with 4 adults able and willing to contibute to the success of this project and more coming to maturity!

Further education of some sort is also needed I think, if your child has a desire for it. It may be different in your circumstance because you live with the Amish community. However, if your child needed to support themselves with a good paying job they would need some education.

Here in Canada the trades are a big oppotunity for youth. Skilled tradesmen are desperately needed by companies here in Alberta and this will continue on for a number of years in this province I think.

Arthur Sido said...

Hi Anonymous

There is a major need for skilled trades here as well and we are encouraging our kids to look into those options.

Also, if you could give at least a first name it would help me know who I am interacting with and distinguish you from other anonymous postings. Thanks!

Bean said...

It is an interesting dilemma isn't it? We strive for self-sufficiency but find it elusive.
I work part-time, two days/week, and my husband works in the construction industry, which we describe as the best paid part time job, as he is "full-time" we get insurance benefits for the family, but for half of the year he works 2 - 3 days/week. We live frugally, our home was paid off a number of years ago, and other than a small credit card balance we have no debt.
We help out with our grandchildren when their parents work, and we raise our own beef, eggs, and produce. I can and freeze everything from the garden, we bake our own bread and cook from scratch. We rarely purchase clothing, when necessary I make my clothing, and make shirts for my husband.
Do we save a lot of money living this way, I would say yes and no. It is expensive to feed and raise a steer, but we like to know where our food comes from and it is nice to have a freezer full of beef. Making clothing isn't the least expensive option, but we end up with a quality, long lasting article of clothing.
Gardening, canning, freezing and baking all take time, I would be less likely to do all of this if I worked full time.
However, we enjoy doing all of the above and that is important to us. Although we live on a modest income we feel we live a good life, the life we want to live, and we keep busy. In addition we help our kids out, each steer we raise we split with each of our married children, and we are available to help with the grandchildren and love being so involved with all four of them.
I wouldn't trade our lifestyle for the world.
I do wonder about making money doing a cottage industry type thing, but feel it would be a lot of work for little return. There are farmers markets galore, eggs for sale signs all over, hand crafted items for sale at every fair, festival, and flea market.
We have considered doing other things from home, but affordable health insurance is a big factor. We continue as we are and try to live by the wisdom of Amy Dacyzyn (author of The Tightwad Gazette) make the money we have do more, rather than bring in more money to do more.


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