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Fixed expenses are notoriously difficult to calculate and incorporate into farm budgets. Family living is arguably the most challenging - especially when you consider the emotional component. This post builds on our past work to share new ideas to help you tackle this line item.

Kansas Farm Management Data (KFMA)
Each May, the Kansas Farm Management Association (KFMA) releases a summary of data collected and aggregated across nearly 1,000 farm operations. While these data are helpful in monitoring financial trends, keep in mind that variations should be expected across differing operations, enterprises, and geography.

Figure 1 shows average family living expenses. It's worth noting that the specific farms included can change over time, so some of the changes in the data are due to different operations comprising the annual average. That said, the data series provide an overall benchmark that shows big-picture trends over time.

Figure 1. Family Living Expense, Kansas. 2000-2020. Data Source: Kansas Farm Management Association.

Average family living expense was $35,000/year during the early 2000s. Correlating with the farm economy boom, farm living expenses turned higher and peaked at $74,400 in 2014. In recent years, family living retracted and stabilized around $70,000 annually. Total living expense for farm families was $71,900 in 2020, the latest data available.

The annual Kansas data is also broken out into several categories (Figure 2). Creating categories can be subjective, but the data are still insightful. Four categories - food purchased, household operation, personal recreation, and health insurance - account for 57% of total expenses. It's also worth noting these categories don't include income taxes on the family living portion of income.

Figure 2 also highlights some of the challenges with reporting the average expense across demographically diverse operations. For example, childcare costs presented an annual average of $288. But it's very unlikely that any household spent almost $300 on childcare; this data means there were many families who paid zero for the category, while a smaller number faced high childcare expenses.

Figure 2. Source of Family Living Expense, Kansas. 2019. Data Source: Kansas Farm Management Association.

So, the average tells us little about childcare expense, but more about the demographics of the data set (that many don't have children and/or childcare expense). The point here is to recognize that elements within these categories can vary significantly.

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