Family Budget 2008-2026: 18 Years of Real Household Spending

 I have been openly sharing my family finances, and I now have 18 years of family budget data. It is hard to believe that I once thought the most financially difficult time would be when the kids were at nursery (day care). Over the longer term, education drives spending growth: it rose from 5% of our spending in 2011-2012 to 45% in 2025-2026.

Key takeaways:
-Total family spending in 2025-2026 was about $183K, down from about $196K in 2024-2025.
-Education grew from 5% of spending in 2011-2012 to 45% in 2025-2026. Including the kids’ food and clothes, the “Kids” category makes up 52.7% of last year’s spending.
-The house is now paid off, so the mortgage line drops to zero. We expect spending to fall by about $33K, partly offset -by inflation and more car and home maintenance, leaving it at roughly $160K.
- From 2031 onwards we expect spending to fall to about $60K a year in today’s money.

Raging inflation makes older data historically interesting but less relevant. According to official statistics (the US Consumer Price Index, CPI-U), cumulative US inflation over the last 15 years is about 50%. Alternative estimates that apply pre-1990 calculation methods put it above 200%. Critics argue that the government’s magicians have countless tricks up their sleeves:
- Substitution bias.  The official CPI assumes that if the price of steak spikes, you will switch to buying cheaper ground beef. The index lowers the weight of the steak, which suppresses the reported inflation rate.
- Fictional adjustments. Government tracking filters price hikes by "quality improvements." For example, if a new computer costs $200 more than last year's model but has a faster processor, the official calculation treats it as a price decrease because you are getting more data power per dollar. This doesn't help you at the checkout counter, where you still must spend an extra $200 out of pocket.
- Owner’s Equivalent Rent (OER): Rather than tracking the direct, actual skyrocketing costs of real estate prices, property taxes, and mortgage rates, the official CPI uses a survey-based metric called "Owner's Equivalent Rent"—essentially asking homeowners what they think their house would rent for. Alternative tracking argues this completely distorts the true reality of the housing sector.

Here is our spending per category as a percentage of total spending. All figures in this post are nominal (not adjusted for inflation):

Year / category	Mortgage or rent	Bills	Car	Adults	Kids	Miscellaneous	Home	Alcohol	Joy
2011-2026	21.6	10.2	3.5	11.5	30.4	3.5	7.6	0.7	10.7
2025-2026	14.2	8.2	1.6	8.4	52.7	2.9	2.8	0.1	9.1

 How the categories are grouped: Bills = home bills, mobile, medical and drugs. Adults = food and clothes. Kids = children’s food, clothes and education.

September 2026 update ($1,531,154 +$43,390 or +2.8%)

↑ Emerging Markets Stock Index Fund is up by $4,203 or +1.8%
↑ Growth fund is up by $676 or +0.6%
↑ Additional investment savings $2,500
↑ Partial severance package investment $69,000
Total gains: $ 76,379

↓ Eurozone Stock Index Fund is down by $4,973   or -1.9 %
↓ Standard and Poor’s 500 Index Fund is down by $2,226  or -0.4%
↓ Global Small Cap is is down by $9,758   or -%4.2
↓ CG Aegon High Yield Bond is down by $654   or -1.9%
↓ Schroder High Yield Opportunities Bond is down by $561   or -1.7%
↓ VanEck Global Fallen Angels High Yield Bond is down by $483   or -1.8%
↓ Vaneck Ucits Etfs Us Fallen Angel High Yield Bond is down by $303   or -1.1%
↓ EUR to USD is down by 2.6% or for my portfolio $12,886
↓ GBP to USD is down by 1.5% or for my portfolio $1,761
Total losses: $33,604

Portfolio Balancing: High-Yield Bonds, Cash and Inflation

 With financial independence now roughly 15 years away, I have started shifting my portfolio towards a 60/40 allocation: 60% in equity index funds and 40% in bond index funds.

Cash vs high-yield bond funds. There is currently an interesting alternative to bond funds in the UK: fixed-term savings accounts with guaranteed interest rates approaching 5%. There are products sometimes referred to as “treasury deposits”, with no account charges or management fees.

I therefore decided to compare four bond funds in which I have invested with fixed-term savings accounts. One important consideration is that both investments can be hedged into different currencies.

 I selected following bond index funds:

Financial independence in sight – path to a 4 million nest egg

 Five months after landing new job I have finally start coming to my senses after nightmare I have been in the last job with Iranian boss for the past three years. The change has been transformative—not only for daily well-being but also for the practical steps toward financial independence.

 I have now started investing my severance package into bonds.  This is part of achieving 60/40 allocation (stocks /bonds), as I am currently ten years out achieving my financial independence.

 This has following assumptions:

•         Expected real (ex-inflation) return on stocks: 3% per year
•  Expected real return on bonds: 1% per year
•  Annual savings capacity: Approximately $52,000 USD per year through a combination of company pension contributions and personal savings, while covering living expenses from current income.

By next year the portfolio is expected to sit near a 73/27 stocks-to-bonds allocation. If the new role remains stable and markets perform roughly in line with the assumptions above, the equity weighting should gradually decline toward approximately 83/17 over time as the bond allocation grows and additional contributions are made. This trajectory is designed to reach a $4 million nest egg (in 2026 dollars).

The $40 Trillion Shadow: Why Debt Cancellation Is Not a Free Lunch for Those Building Wealth

 A recent New York Post piece floated an old idea with a modern twist: cancelling the U.S. national debt, framing it as “An Ancient Sumerian Solution to Our $40 Trillion Debt.” The argument treats debt as a purely human-made accounting system that can simply be reset. While money is indeed a social construct, claims on real resources are not. Canceling $40 trillion in public debt would not make those resources disappear—it would redistribute who owns them.

Imagine the impact on pension funds, individual retirement accounts, insurance companies, and households that hold government bonds. The losses would also hit currency holders through higher inflation. This is one reason gold has been trading near $4,400–$4,700 per troy ounce (31.1 grams) in recent months—investors are seeking an inflation hedge and a store of value outside the traditional system.

The real question is not “Can we cancel the debt?” Of course, a government can attempt it. The better question for anyone focused on financial independence is: “Who gets robbed when we do?”  Historical Precedents Offer Caution, Not Comfort.

 History provides a few instructive examples:

August 2026 update ($1,487,764 +$41,551 or +2.9%)

↑ Emerging Markets Stock Index Fund is up by $5,534 or +2.4%
↑ Eurozone Stock Index Fund is up by $2,406 or +0.9% 
↑ Standard and Poor’s 500 Index Fund is up by $15,276 or +2.7% 
↑ Global Small Cap is up by $6,604 or +2.9%
↑ Growth fund is up by $4,930 or +4.3%
↑ Additional investment savings $2,500
↑ EUR to USD is up by 0.9% or for my portfolio $4,302
Total gains: $41,551

July 2026 update ($1,446,213 -$14,253 or -1.0 %)

↑ Additional investment savings $2,500
↑ GBP to USD is up by 1.5% or for my portfolio $1,688
Total gains: $4,188

↓ Emerging Markets Stock Index Fund is down by $8,563 or -3.6%
↓ Eurozone Stock Index Fund is down by $1,701  or -0.7%
↓ Standard and Poor’s 500 Index Fund is down by $513 or -0.1%
↓ Global Small Cap is down by $5,607 or -2.4%
↓ Growth fund is down by $2,058 or -1.8%
Total losses: 18,441