Farmdoc Search Subscribe About Contact Us friends of farmdoc
Home

Finance
Marketing & Outlook
Management
Law & Taxation
Policy
FASTtools
Crop Insurance
Presentations
Prices & Weather
Ag Links
Visit farmdoc daily
Visit farmdoc webinars
farmdoc Sponsors

June 27, 2008
FEFO 08-12

FARM AND FAMILY LIVING INCOME AND EXPENSES FOR 2007

In 2007 the total, noncapital, living expenses of 1,232 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $60,294--or $5,025 a month for each family (Table 1). This average was 9.6 percent higher than in 2006 and 14.3 percent higher than in 2005. Another $6,118 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $66,412 for 2007 compared with $59,686 for 2006, or a $6,726 increase per family. The average amount spent per family for capital items was $1,426 more while noncapital expenses increased $5,300 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.

Income and Social Security Taxes Paid

Income and social security tax payments increased about 7 percent in 2007 compared to the year before. The amount of income taxes paid in 2007 averaged $10,964 compared to $10,251 in 2006. Medical expenses were higher in 2007 compared to 2006. In 2007, medical expenses averaged $8,071. Medical expenses include out-of-pocket costs for health insurance along with doctor and hospital expenses. Net nonfarm income continues to increase, averaging $31,668 in 2007. Net nonfarm income has increased $13,676, or 76 percent in the last ten years.

In the table, the averages per farm for total family living expenses are divided into five categories for 2004 through 2007. The "expendables" category includes cash spent for food, operating expenses, clothing, personal items, recreation, entertainment, education, and transportation. This category also includes selected itemized deductions such as the personal share of real estate taxes. Cash spent for capital improvements exceeding $250 is not included. The use of a rented house on an estimated 30 to 40 percent of the farms in this sample is not included, since these data cover only cash outlays.

Table 1 also contains averages for the high third and low third sorted by noncapital living expenses for families of three to five. The high third averaged $103,668 of noncapital family living expense while the low third averaged $45,517.

The author would like to acknowledge that data used in this study comes from the local Farm Business Farm Management (FBFM) Associations across the State of Illinois. Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,500 plus farmers and 60 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff provide on-farm counsel with computerized recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217-333-5511 or visit the FBFM website at www.fbfm.org.

Issued by: Dale Lattz, Department of Agricultural and Consumer Economics

 

 


  

Department of Agricultural and Consumer Economics    College of Agricultural, Consumer and Environmental Sciences
Home | Finance | Marketing & Outlook | Management | Law & Taxation
Policy | FAST Tools | AgMAS | Crop Insurance | Prices & Weather | Ag Links
Search | Subscribe | About farmdoc | Contact Us | friends of farmdoc
E-mail: farmdoc@illinois.edu
University of Illinois