May 8, 2003

 

Records Indicate Small Increase in 2002 N.D. Farm Family Living Expenses

The average living expenditures of 298 farm families enrolled in the North Dakota Farm Business Management Education Program was $38,139 in 2002, an increase of less than $100 compared 2001. This average does not include income taxes or self-employment taxes, says an agricultural economist at North Dakota State University.

"Family living expenditures can increase because more purchases are made, a shift to purchasing a more expensive mix of goods and services, or an increase in prices." Prices increased very modestly in 2002. The general level of prices as measured by the U.S. Consumer Price Index (CPI) for all urban households increased 1.6 percent, and the CPI for households in cities of less than 50,000 population located in the Midwest only increased 1.1 percent." says Andrew Swenson, farm management specialist with the NDSU Extension Service

One reason that the farm family living expenses increased less than the inflation rate is because the number of people per household of the families who detailed living expenses declined slightly to 3.5 from 3.6 in the 2001 report.

The largest expense category was medical care and health insurance, which increased 7 percent in 2002 to $6,468 per family. That category exceeded the necessities of food at $5,789, shelter (which includes household supplies, repairs, furnishings and appliances) at $6,083, and clothing at $1,935.

Medical care and health insurance accounted for 17 percent of total family living expenses (excluding self-employment and income taxes), followed by 16 percent for shelter, supplies and furnishings, 15 percent for food, and 14 percent, or $5,434, for personal expenses and recreation.

Vehicle operation and purchases declined to $3,785, or 10 percent of total expenditures in 2002 after being between 11 and 13 percent the previous three years. Expenditures on contributions and gifts of $2,113 and life insurance at $1,366 were essentially unchanged from 2001. Utility expenses at $1,762 were about $100 less than in 2001 and education expenditures of $933 were down about $170.

Nonfarm interest expense of $865 is small in relation to other family living expenses but has increased by 6 percent or more in each of the last three years during a time of declining interest rates. This indicates an increase in farm family consumer debt.

Farm families interested in information about planning and budgeting for their living expenses can request the following publication from county offices of the NDSU Extension Service: "Farm Family Living Trends in North Dakota" (HE453), "Taking Charge of Family Finances: How Much Should We Spend" (HE440). Consumer price index information is on the www.bls.gov/data/ website.

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Source: Andrew Swenson, (701) 231-7379, aswenson@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu

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Graphic --

2002 average family living expenses for farms 
enrolled in the North Dakota Farm Business 
Management Education Program
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                                             Percent of
Family Living Expenses                      Total Expense
----------------------------------------------------------
Food                               $ 5,789       15
Shelter, supplies, furnishings       6,083       16
Clothing                             1,935        5
Medical care and health insurance    6,468       17
Vehicle operation and purchase       3,785       10
Utilities                            1,762        5
Education                              933        2
Contributions and gifts              2,113        6
Personal purchase and recreation     5,434       14
Life insurance                       1,366        4
Non-farm interest expense              865        2
Other                                1,606        4
                                 ----------------------
Total                             $ 38,139      100
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