Dealing with debt is the key theme of OP€RATION CASHFLOW this year. As one of this year’s participating farmers said to me recently:
“We all know to turn off the lights or shop in different supermarkets to save money. If money is tight we are all doing that. How do I tackle my debt? That is want I want to be able to do.”
Over the last two years we have focused on getting families to look at how they could take control of their finances.
In the first year we had great success in getting people to look at their net worth and to start identifying how much they were actually spending each year. Living in Ireland is not cheap.
For many, it came as a shock to see how much they spend on eg groceries each week – it ranged between €200 and €300/week for a family of two adults and two or three children.
All the families ended the year in a better financial position, through a combination of improved profit, reducing spending and realising that they were making inroads into their debt. Last year, we moved onto looking at key themes like dairy expansion, succession planning and making profit from a large suckler herd. We also looked at the financial issues that arise after becoming a widow. Each family did their net worth and cashflow plan at the start of the year, but then the focus moved onto forward planning.
They started to set goals and identified how to achieve them. This process is still in motion. The fact is that financial planning is ongoing, but if you are disciplined you can make large steps towards the goals you set.
This year in OP€RATION CASHFLOW, I intend to build on the previous two years. Establishing net worth and cashflow planning will be revisited, as well as helping the families set out a financial plan for their future. I have chosen families who are under serious financial pressure due to debt. They are bringing in enough to cover their day-to-day expenses but, like many businesses, they are struggling to repay loans that they have taken out.
The families in OP€RATION CASHFLOW this year are presented below.
High debt
A dairy farmer – he has high debt after buying land, but needs more money to expand. His son is now coming home to take over the farm. We will look at whether it is possible to manage the budget for the planned expansion and also prepare the son for taking over the farm.
A builder – he has returned home to farm. He also has a large debt to pay off, but is just about keeping up with the repayments. He owns a number of houses which are currently rented out.
Deal with the bank
A large farmer – he is in the middle of trying to get an agreement with the bank. He is putting a plan in place to improve profit on the farm, restructure some land and, hopefully, get a reduction on the current capital.
A contractor – he is being forced out of the business by farmers who are not paying their bills. A farmer himself, he has had to stop contracting this year due to this issue. He wants to develop the farm and is also looking at another business opportunity.
Little debt
They are not all in the red. The fifth family has followed the OP€RATION CASHFLOW plan for the last two years. They have drafted a budget and tightened their belts. Even though they have done the work, they feel that they didn’t always make the right decisions in order to control their finances.
When I start talking to the five families other issues also arose.
In two cases, farm accounts have not been submitted, for different reasons, for nearly 10 years. Another family submit their own accounts, but are worried about getting something wrong, which could result in a financial audit.
IFAC accountants have agreed to look at all these situations to see what can be done, especially where the accounts have not been submitted for such an extensive period of time.
I look forward to working with all of them. For the families that applied and did not get picked, I hope that you will benefit from following OP€RATION CASHFLOW, along with all our readers, in the year ahead. You can all set out to do the six steps for better financial health.
Six steps to better financial health
Coffee
Tea
MilkEstablish your current situation and monitor your net worth – are you better off financially in January 2014 compared with January 2013? Identify how 2013 went – do a farm budget and/or an overall one if money is coming in off the farm.Set your goals – these can be simple milestones you want to hit in 2014. For example, to fulfill a cashflow budget target at the end of each month, to keep on top of your current account, to build an ‘emergency fund’ or to start saving for your children’s future education. Identify any financial problems that could stop you from achieving your targets.Examine different strategies. Put in place plans to hit your budgetary targets. Constantly review and react to changes in your finances.
Dealing with debt is the key theme of OP€RATION CASHFLOW this year. As one of this year’s participating farmers said to me recently:
“We all know to turn off the lights or shop in different supermarkets to save money. If money is tight we are all doing that. How do I tackle my debt? That is want I want to be able to do.”
Over the last two years we have focused on getting families to look at how they could take control of their finances.
In the first year we had great success in getting people to look at their net worth and to start identifying how much they were actually spending each year. Living in Ireland is not cheap.
For many, it came as a shock to see how much they spend on eg groceries each week – it ranged between €200 and €300/week for a family of two adults and two or three children.
All the families ended the year in a better financial position, through a combination of improved profit, reducing spending and realising that they were making inroads into their debt. Last year, we moved onto looking at key themes like dairy expansion, succession planning and making profit from a large suckler herd. We also looked at the financial issues that arise after becoming a widow. Each family did their net worth and cashflow plan at the start of the year, but then the focus moved onto forward planning.
They started to set goals and identified how to achieve them. This process is still in motion. The fact is that financial planning is ongoing, but if you are disciplined you can make large steps towards the goals you set.
This year in OP€RATION CASHFLOW, I intend to build on the previous two years. Establishing net worth and cashflow planning will be revisited, as well as helping the families set out a financial plan for their future. I have chosen families who are under serious financial pressure due to debt. They are bringing in enough to cover their day-to-day expenses but, like many businesses, they are struggling to repay loans that they have taken out.
The families in OP€RATION CASHFLOW this year are presented below.
High debt
A dairy farmer – he has high debt after buying land, but needs more money to expand. His son is now coming home to take over the farm. We will look at whether it is possible to manage the budget for the planned expansion and also prepare the son for taking over the farm.
A builder – he has returned home to farm. He also has a large debt to pay off, but is just about keeping up with the repayments. He owns a number of houses which are currently rented out.
Deal with the bank
A large farmer – he is in the middle of trying to get an agreement with the bank. He is putting a plan in place to improve profit on the farm, restructure some land and, hopefully, get a reduction on the current capital.
A contractor – he is being forced out of the business by farmers who are not paying their bills. A farmer himself, he has had to stop contracting this year due to this issue. He wants to develop the farm and is also looking at another business opportunity.
Little debt
They are not all in the red. The fifth family has followed the OP€RATION CASHFLOW plan for the last two years. They have drafted a budget and tightened their belts. Even though they have done the work, they feel that they didn’t always make the right decisions in order to control their finances.
When I start talking to the five families other issues also arose.
In two cases, farm accounts have not been submitted, for different reasons, for nearly 10 years. Another family submit their own accounts, but are worried about getting something wrong, which could result in a financial audit.
IFAC accountants have agreed to look at all these situations to see what can be done, especially where the accounts have not been submitted for such an extensive period of time.
I look forward to working with all of them. For the families that applied and did not get picked, I hope that you will benefit from following OP€RATION CASHFLOW, along with all our readers, in the year ahead. You can all set out to do the six steps for better financial health.
Six steps to better financial health
Coffee
Tea
MilkEstablish your current situation and monitor your net worth – are you better off financially in January 2014 compared with January 2013? Identify how 2013 went – do a farm budget and/or an overall one if money is coming in off the farm.Set your goals – these can be simple milestones you want to hit in 2014. For example, to fulfill a cashflow budget target at the end of each month, to keep on top of your current account, to build an ‘emergency fund’ or to start saving for your children’s future education. Identify any financial problems that could stop you from achieving your targets.Examine different strategies. Put in place plans to hit your budgetary targets. Constantly review and react to changes in your finances. 
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