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.
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.
Since we bought
house on a fixed rate mortgage over time percentage of overall spend has been
going down, as it was fixed expense. “Car” category is only insurance, car
maintenance and the fuel. We have always bought the car outright, there are no
car payments.
For those of
you who like pie-charts here are the same categories in pie chart:
Family spending in USD, year by year:
What 18 years of family spending data show
- Education drives the increase. From 2020-2021 to 2025-2026, annual spending rose by about $82K (from $101K to $183K). Education alone accounts for about $74K of that increase, roughly 90%.
- Housing became a smaller share. Mortgage or rent fell from about 31% of spending in 2011-2012 to about 14% in 2025-2026, because the fixed mortgage payment stayed flat while other costs grew.
- One-off projects distort single years. In 2019-2020, home spending reached $51.6K and total spending reached $139K, against $101K the following year. My spreadsheet notes show a major refurbishment that year: fencing, wardrobes, doors, plastering and furniture.
- Travel makes spending lumpy. “Joy” peaked at $29.2K in 2024-2025 and fell to $16.7K in 2025-2026, as we traveled less.
What changed in 2025-2026. The main differences from last year:
- Kids braces and dental time. Around $8K USD. Its not visible, as recorded under “kids” category. This category seen some significant drop due to out of home living, but dental made up for the difference.
- One child went to university. It is slightly more expensive than the private school. Again, it is not visible, as university fees were paid in September 2024-2025.
- There is significantly less spent on the car. Last year there was an expensive major car service. The car is over 10 years old and it is only natural to expect that this year we are going to “catch-up”, in year time a new tire will be needed soon.
- More spent on the home. I bought two 4K monitors for home. They significantly reduce eye strain. The cost for two just over $1.4K . We had to do minor roof repair ~ $1K.
- We traveled less. “Joy” fell from $29.2K to $16.7K.
What to expect in 2026-2027:
- The house is paid off, the mortgage will be at zero.
- Don’t expect major dental work next year.
- Will try to keep lid on the travel expenses.
We expect a reduction of about $33K, partly offset by inflation and more car and home maintenance. Hopefully, spending will stay at about $160K.
The following years: college fund and life after 2031
- 2026-2027 is the last year we pay for university from our regular budget; in the following years it will be paid from the college fund. We are still there to pick up emergencies.
- I am saving for a second college fund and anticipate almost no additional expenses from 2031 onward. That would bring our spending down to about $60K a year in today’s money.
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