Farmers struggling with cash-flow should prioritise their household bills ahead of their farm expenses, according to the Money Advice and Budgeting Service (MABS).
Speaking at the Teagasc Get Farm Financially Fit seminar in Castlebar, Mayo, last week, Rosaleen Maher said that farmers shouldn't always compelled to pay the largest creditor first.
"Very often farmers feel that they have to pay the creditor that is shouting loudest first, and by the time they get around to the bare necessities such as doing the weekly shopping or paying for electricity, they find that they have no money left," said Ms Maher.
She said that one third of her 150 clients were farmers and that the demand for MABS free services had not eased since the peak following the economic crash in 2008.
"We've as many clients as ever, and some advisors in the region are finding that demand is stronger than ever," she said. "But I think that the banks are possibly more willing to negotiate and do deals on mortgages on properties that are in negative equity in this region, because they realise that they may never get back to the levels that they were at," she said.
The seminar was part of a national campaign that has drawn together over 20 semi-state and private organisations with financial, technical and general support services to help farm families maximise farm and off-farm incomes.
One of the key goals of the programme is to get farmers to engage in more financial planning and analysis to manage income and expenses.
Better financial skills are seen as essential as farm income volatility increased fourfold over the last five years compared to the 2000-2010 period. In addition, dairy farmers are planning to invest €1.5bn to increase milk output by 50pc over the next 5 years.
At the same time, over one third of all farm households have farm incomes that are below the minimum wage.
"Teagasc research has shown that farmers that participate in financial record keeping such as profit monitors and discussion groups are 11pc more profitable than their counterparts that chose not to participate," said Teagasc's Barry Caslin.
Advisors encouraged farmers to separate the farm income and expenses from the household cash-flows.
"A surprising number of farmers don't actually know how much their farm is making, or how much they need to run the household. These are basic starting points for families concerned about coping with falling farm subsidies, or rising expenses that go with getting families educated," said Mr Caslin.
"The first steps are simple ones like having a separate bank account for the farm and the household, having a dedicated office for all the paperwork associated with the farm, and reading your bank statement when it arrives in the post each month," he said.