Posted January 9, 2023 | By: Scott Bame
January is Financial Wellness Month. How Fit Are Your Finances?
January marks the start of a new year and with it a renewed focus and reflection upon where we can improve our lives. Fittingly, January is also the start of financial wellness month, bringing fresh opportunities to pay more attention to, and manage your financial well-being. This applies not only to personal finances, but also to the financial health of your operation and the ag industry as a whole.
Many growers I know didn’t get into farming with ambitions to make a lot of money. More often than not, they are motivated by a larger calling – preserving a family legacy; fulfilling a passion to work the land; having the freedom to control their own destiny, etc. No matter their intentions, the financial well-being of these growers is critical to the long-term sustainability of their operation as well as the ability to cultivate and inspire the next generation of growers, whose financial success is critical to continue fueling our global food system.
This is precisely why everyone who plays a part in the ag industry should take some time this month to assess their own financial health and take action to set themselves up on a path to success. Here are a few tips to keep in mind as you start out the new year.
Articulate your financial goals and align them with your crop plan
There are plenty of variables to contend with in this industry, so having a plan - and one that has some built-in flexibility - can help ensure your success, both from an agronomic perspective and an economic perspective.
Review your financial plan and strengthen your economic position with regular adjustments Having a financial plan is only helpful if you keep it updated and relevant to your current position, which shifts throughout the year. Make sure you are assessing your cash flow needs and aligning those to your specific crop. You don’t have to spend a lot of time and energy, but it is critical to revisit your finances regularly and adjust as things change.
Proactively manage your credit report
Even growers who manage all-cash operations need to pay attention to their credit report. Don’t wait until you need credit to find out where you stand. Take action now to help improve your credit score. This might mean closing inactive accounts; checking in with financial institutions to correct inaccurate or erroneous queries; or avoiding instances where you are overextending your credit. A little maintenance now will ensure your report is in a good place if and when you need to access credit.
Don’t wait for the unexpected to happen to make contingency plans
Develop and get comfortable with a plan B, C, and D. Just as important as it is to have a financial plan, you also need clear options to pivot as your circumstances change. Spending a little time to plan for various “what-ifs” will make it that much easier to act when you’re presented with a growth opportunity or need to change course quickly.
Review your interest rate and shop around
To ensure you’re taking advantage of the best terms, rates and incentives available, you have to do your research. Look for options that allow you to blend rates and take advantage of program incentives. There are so many financial programs available to growers these days. Take some time to look closely at your options and work with trusted advisors who bring specific expertise in that area - to compare apples to apples.
Expand your lending portfolio and diversify sources of capital
It might seem more efficient to keep all your eggs in one basket, but it can also put unnecessary stress on your cash flow and limit your ability to access capital when you need it most. Look beyond traditional methods of lending like having an operating line from your local bank to maximize the flexibility in your finances year-round.
As we set our ambitions for a prosperous 2023, now is a great time to take a comprehensive look at your financial state and give every area of your personal and business finances a bit of a tune-up. Our team at Nutrien Financial brings a specific blend of financial expertise with agronomic sensibilities. We’ll help you take a complete assessment of your financial status and get you on the right track for financial success this year.
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