Tracking Farm Expenses

Some of us probably do NOT want to know how much money we spend on our farms and horses each month, but unfortunately budgeting is a necessary evil. This post discusses an easy method for tracking farm expenses. Please excuse my nerdiness.

1. Log consumables in a calendar

I hang a calendar in the tack room next to the feed board, and keep track of hay and bedding usage on it. I mark a "1P" or "1F" every time I open a bag of bedding (pellets or flakes, respectively). ("1" because it could also be "2F" or "3F" if I use two or three bags of bedding in one day.) When I open a bale of hay, I knot the twine in a loop and save it on a hook until Sunday, when I remove all the loops of twine and count them. Then I mark, for example, "5H" at the end of that week's row. At the end of the month, I can add up all of the H's, P's, and F's and input them into the spreadsheet.

2. Use a spreadsheet to total monthly expenses

I have an Excel spreadsheet with rows for each month and columns for each category of operating cost: Feed, Hay, Bedding, Parasites, Flies, Waste, Ring Fees, Land, Labor, and Other.

At the end of the month, I use the calendar to input all my H's, P's, and F's into the spreadsheet at their cost times the number I used that month. For example, the bedding cell would look like this: =1.06*(5*6.29+2*5.99). The "1.06" accounts for the 6% sales tax, mini-flakes cost $6.29, and pellets cost $5.99.

For costs that don't show up on the calendar, I input them more or less as they arise or save the receipts for a couple weeks then enter them. I like to add comments on cells for the less-regular costs, so I will know what they represent (for example, "Lime" or "Mineral block"). I also add comments with the dates of manure dumpster pickup, and the dates I paid barn help, etc. to make sure I account for everything correctly.

There is a column at the end for that month's total, and underneath the monthly log I have a running average cost per horse (way lower than boarding, but of course this isn't factoring in my labor or the start-up costs, explained below).

I also keep a running total of hay bales used so that I know how much to order next time.

I like to use Excel but if you're not computer-savvy you could do this by hand instead!

3. Track start-up costs in spreadsheet

Sorry, but no one needs to know how much money I spent on this place.
Most of the time even I don't want to know!

This may be something you really, really don't want to know, but I was curious. I track the costs of all of my major start-up investments, breaking them down into major categories (Barn, Arena, Equipment, and Land). I also added a catch-all category (Other) that displays a running total from a separate spreadsheet where I log smaller miscellaneous costs that are capital expenses vs. operating costs (e.g., a set of cross-ties, chew strips, etc) because this was easier than trying to include all these smaller items in a category.

I also have a formula set up to calculate the monthly cost difference between boarding my two horses in appropriate nearby facilities and keeping them at home. Dividing the total start-up cost by that monthly cost saving, I can see how long it will take for my barn to pay for itself (financially anyway). Unfortunately that figure goes up every time I invest in an improvement.

On budgeting: The start-up cost has added up to almost twice what I naively predicted, even though I increased all my estimates by 20% to be safe. But I will say that about 90% of the start-up costs were expended in the first year, and now that that year is over I find myself buying fewer and fewer things for the farm, other than feed, hay, bedding, etc. It's a great feeling!

Okay, nerd out!