The average living expenditures for North Dakota farm households increased 0.5 percent from 2009 to 2010. The average in 2010 was $57,632.
The expenditures are based on data from 263 farms enrolled in the North Dakota Farm Business Management Education Program. Detailed living expense records were kept throughout the year. This figure does not include income or self-employment taxes.
"Changes in family living expenditures from year to year are determined by changes in prices and changes in the level and types of items that are purchased," says Andy Swenson, North Dakota State University farm management specialist. "The U.S. Consumer Price Index (CPI) measures the general change in the price of goods and services (www.bls.gov). The average annual CPI increased 1.6 percent from 2009 to 2010, following a 0.4 percent decline from 2008 to 2009."
Another reason for the low increase in family living expenses for 2010 was that more beginning farmers were contained in the data, and the average family size of farms reporting family living expenses declined from three to 2.9 people per household.
"The largest expenditure since 2001 has been for medical care and health insurance," Swenson says. "In 2010, it was $10,045. Almost tied for the second largest spending category was shelter, supplies and furnishings at $8,736 and personal purchases and recreation at $8,734. The fourth largest expenditure was $7,698 for food."
The nonfarm vehicle operation and purchases category was the fifth largest expenditure at $6,572. Also, in 2010, expenditures for contributions and gifts averaged $3,664, utilities $2,953, life and other personal insurance $2,029, clothing $1,949, education $1,595, nonfarm interest expense $1,184 and the "other" category at $2,473.
"Family living expenses are an important item in determining annual change in net worth and have increased substantially through time," Swenson says. "For example, expenditures 20 years ago were $24,125, while 10 years ago expenditures were $36,858. Family living expenses can be considered a fixed, or overhead, cost to the farm. There is pressure on farm families to increase revenue through time, either from farm or nonfarm income to keep a pace with family living expenses."
Farm families interested in information about planning and budgeting for their living expenses can find the NDSU Extension Service publication "Taking Charge of Family Finances: How Much Should We Spend" on the Web at http://www.ag.ndsu.edu/pubs/yf/fammgmt/fe440w.htm.