My Family Spent $400,000 Last Year: Here's the Complete Budget Breakdown
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My family spent $400,000 in 2025, and this episode breaks it all down with (maybe too much?) transparency.
We spent $190,000 on our house and yard, put $60,000 on 0% interest credit cards when our renovation went over budget, and made some mistakes we're REALLY going to try not to repeat.
Plus, I share what I'm happy with, where we could do better (spoiler: charitable giving), and why our spending probably won't go down much in 2026 even without a major renovation.
If you want real talk about managing wealth as a millennial inheritor, this budget recap is for you.
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Transcript:
Hey, I'm Katherine and thanks for joining me at Heir Necessities, the podcast that turns complex financial topics into real talk for Gen X, millennial and Gen Z inheritors. Each episode of this podcast, I break down a different topic related to generational wealth and inheritance. My goal is that you can stop asking Google or ChatGPT what to do with your money and come here instead for real talk, real answers and real solutions that you can start putting in place today. On the first episode of Heir Necessities in 2026, we are doing a full budget recap. My family spent $400,000 last year. I'm going to tell you what we spent it on, what I'm happy with and what mistakes we made along the way.
Before I dive in, if you're enjoying Heir Necessities, a quick request to please leave us a review on Apple Podcasts, Spotify, wherever you are listening to this now. It really helps the podcast out and it helps me reach more inheritors like you.
How We Spent $400,000 in 2025: Complete Budget Breakdown
We spent $400,000 in 2025. Where did all that money go? The first thing that you need to know is that we did buy a giant house, we're talking 5,300 square feet, and also did a massive renovation on that house.
I'm just gonna put a quick note in here that I realized I just talked about that renovation for like four or five minutes and that wasn't really what I was intending to do. I'm leaving it all in the podcast. So if you're interested in all of that, keep listening.
But if you're not interested in this renovation content, just know we spent $120,000 renovating our house. It was our biggest expense in 2025. And skip forward about four minutes. I'll leave a note in the show notes where you should jump to if you want to actually start hearing about the rest of the things we spent money on.
$120,000 Home Renovation Costs: What We Spent and What We Learned
So buying the house actually happened in 2024. So the big chunk of that cost didn't come in last year's budget.
And a lot of the renovation, probably 60, 70% of it, also paid out in 2024. So this $400,000 doesn't capture the full renovation costs, but it does capture a lot of the renovation and especially a lot of the renovation that we didn't budget for.
In this season of Heir Necessities, I'm going to be doing kind of a deep dive on our personal spending journey, which includes a lot of renovating costs because we bought a house that hadn't been cared for super well and that is 120 years old. So it wasn't a cheap undertaking.
In 2025 specifically, $120,000 of that 400 we spent went to renovation costs. Some of this was money that we budgeted for in the renovation, right? When we got our bid, we knew how much it would cost, we included an overage and all of that. But like $60,000 of this was money that we didn't budget for. And we didn't have the cash flow to actually support that level of spending.
Managing Inherited Wealth: Our Financial Philosophy and Cash Flow Strategy
We have the assets, but in my family, we draw a really hard line between the assets that we have both inherited from grandparents, because all of our parents are thankfully still alive, and the assets that are actually ours.
So as much as possible, now that both of us are established in our careers and making good money, we don't touch any of the assets that we have inherited, which also includes significant gifts from both of our parents. That money is money that's supposed to grow for the future and honestly money that we kind of intend to pass along to our kids. It's not money that's available to us for renovation purposes. And so this leaves a lot of like really complicated and by complicated, I don't necessarily mean like actually complicated, I more like mental gymnastics, complicated spending decisions because we could have said, okay, we're going to go 60,000 over what we thought we would spend in the reno. That's not that big a deal.
We can sell some stock, whatever, cover it. But we won't let ourselves do this. And part of this is kind of like a financial fitness test for us. And part of it is also a point of pride that we can buy this house, which obviously we had significant help from our family to do, but we don't need their help along the way. And selling stock from either of our inherited accounts feels like you're taking more help.
So we had to figure out how to do it on our own. And what that meant is taking out $60,000 on 0% interest credit cards, which solved the immediate cash flow problem, but created a secondary cash flow problem that we had to deal with in 2025 and are continuing to deal with in 2026, which is that you basically have 12 to 18 months to get $60,000 of zero interest rate credit card debt paid off before interest starts accruing. I have never paid any interest on a credit card payment and I will never pay any interest on a credit card payment as long as I live. So this is really important to me.
Using 0% Interest Credit Cards for Renovation: Our Strategy to Avoid Debt
Thankfully, we're almost done with that. That'll be included in some of the quarterly spending updates that I do. So my first quarterly spending update will come out in April and we'll talk about the progress we've made against paying down some of those credit cards. But for the purposes of the annual budget recap video, we spent $120,000 on our renovation of kind of budgeted money. And I think this is one of the biggest mistakes that we made in 2025. I don't think that spending any of that money was a mistake.
We made a lot of decisions because of the scope of the remodel that we were doing that spending more money now saves you money down the line, which is one of the great luxuries of having money, right? As you can spend more money upfront to save money over the long term or just to make your life easier. So you don't have to do some of these super invasive renovations once you're already living in the house, you already have your furniture in there, whatever. I'm glad we made those choices.
Home Renovation Budget Mistakes: How Small Decisions Add Up to $50,000
But when we set out, because of the scope of this renovation, because of the size of the house and all of that, we had no idea how much over we were going to go and how much additional cash flow we were going to need. And so it ended up being a little bit of a scramble where it was like, OK, we need this money and we don't know where it's going to come from, which was a little bit stressful. Ultimately, it ended up working out fine. But I think now that we're going into another renovation, we have a $350,000 basement renovation that we're kicking off, another video coming out in the next few weeks all about that renovation. So if you're interested in this content, definitely follow that. We're being much more intentional about looking at the budget, thinking how much we're going to go over, and really tracking all of those small decisions that go into a remodel. Because it's really easy to say, yes, we have an amazing design build team, we have an amazing GC, they have amazing ideas.
And you say, yeah, like that makes sense. I love that idea. It's sensible. It's not like this crazy extravagance, but you say yes and it's $5,000. And so you say yes to 10 of those things and now you spent $50,000 extra dollars. And that I would say overall is the biggest spending lesson that we learned in 2025.
$70,000 Yard Work and Home Updates: Transforming an Overgrown Acre
Diving into our other expenses, our next biggest category was, shocker, still our house. We spent $70,000 on other home updates that were outside the scope of our actual renovation. And some of the biggest stuff that we did here was our yard. We have a lot that's almost an acre in the city, which is really rare, and it was incredibly overgrown. We had to hire brush clearing companies. We had to do a ton of tree work, a ton of land clearing, a ton of just moving stuff around to get it to a point where you would walk in and be like, yeah, this is kind of nice. It's not like we spent $70,000 and now our yard is incredible. We spent $70,000 and now our yard is not embarrassing. Some of this was also in-house updates, furniture, moving expenses because we sold a house as well. To move into this house in April, some of that was sale expenses related to our other house, getting it fixed up to sell.
So all in all, we are two categories in and we've spent almost 50% of our budget, so $190,000 on housing, housing costs, housing updates and yard work. 2025 was an expensive year for taxes, financial and legal fees and insurance.
Property Taxes, Legal Fees, and Insurance: $45,000+ in Annual Costs
Taxes, pretty self-explanatory. Property taxes on our new house last year were $20,000. Thankfully they're going down a little bit, but still you had $20,000 on property tax. You had property tax on our old house as well. Income taxes. You also had legal fees when we bought this house. We inherited this property dispute with the neighbors, which we knew about thankfully, but we had to pay a lawyer like, I don't even know how much we paid him all in, probably like $15,000 to get all that sorted out. And then also insurance. Insurance is a major expense for us. We probably have about $10,000 a year in insurance premiums all in between life insurance, homeowners, auto, umbrella.
I think that most inheritors are significantly underinsured. And in addition to that are working with insurance companies that are going to take them around if you ever have a claim.
It's one of the most overlooked and undervalued areas where planning is really important, which is very long way of saying we spend a lot of money on insurance, but I think it's worth it because I don't ever want to end up in a situation where something happened to my house and now I'm on the hook for hundreds of thousands of dollars that my insurance company isn't going to cover.
$50,000 Childcare Costs: Daycare Budget for Two Kids (And How to Cut It in Half)
If you've watched any of my videos, you can probably guess what the next biggest category that we spent money on is. It's these two tiny humans who live with us. We spent another $50,000 last year on childcare. So that's $45,000 on daycare, which is actually lower because our daughter got a free Preschool for All spot. So we had three fewer months of tuition for my daughter. It would have been over $50,000 otherwise.
It also includes the cost of babysitters, nannies when school is off, but we both need to work all of that. It's an expensive category, but we do have that Preschool for All spot for our daughter, which literally cut this cost in half for 2026. It'll actually go up a little bit when she starts kindergarten because we'll have to figure out aftercare in summers. We are also hoping that our son will get a Preschool for All spot starting in September. That would mean that for 2027, our childcare budget would go from $45,000, $50,000, probably down to like $5,000 or $10,000 for a year, which would be amazing. We can take all of that money and push it into the travel budget and I can't wait.
Tracking $30,000 in Household Spending: How We Budget for "Stuff"
The next category that we spend a lot of money in is broadly titled stuff. There are a whole bunch of budget categories in here. I use Monarch Money for tracking my budget. So if you're wondering why I know all this, it's because I use the Monarch software, which I absolutely recommend. I recommend it to all of my clients. But in that stuff budget, you have haircuts, clothes, Amazon, Target, like general merchandise, gifts, kind of lumped together all of just like buying stuff that we do, not food, which is its own category, but literally acquiring things that come into our home and also services, haircuts, nails, eyebrows, whatever.
$25,000 Annual Food Budget: What We Spend on Groceries and Dining Out
After that $30,000 we spent on stuff, the next biggest budget category is food. We spent $25,000 last year on food. That includes all of our grocery bills and all of our eating out. This averages out to a little over $2,000 a month for a family of four, which given that I feel like we eat out fairly frequently, we definitely don't skimp when it comes to food out. And we also don't skimp on groceries.
I feel like $2,000 a month for all the food we eat is actually pretty reasonable given how much we spend in some other areas like our house.
Travel Budget 2025: Why We Only Spent $20,000 (Including Scotland Trip)
The next category was actually really low in 2025 and that was travel. Because we spent so much money on the house, because we moved, because we owned two houses for a lot of 2025, because my husband started a new job that was really demanding in September of 2024, we didn't travel a whole lot in 2025 relative to what we want to do.
That being said, we did take the kids to Scotland, so we didn't do nothing. But I think $20,000 for a travel budget is actually pretty low for us. Part of this is also just the ages of our kids. We have a four-and-a-half-year-old and an almost three-year-old. Like, they're not amazing yet at traveling. They do well for their age, but still.
I think as they get a little bit older, especially moving into 2027, that travel budget is gonna start to jump up pretty significantly because we love to travel. There's a lot of traveling we wanna do with them. We wanna show them the whole world and we're lucky enough that we're able to do that.
Medical Expenses with Good Insurance: $15,000 Annual Healthcare Costs
After that $20,000 travel budget, things kind of trail off. We have relatively low medical compared to a lot of people. My husband has really good insurance coverage through his work. We both have kind of pretty high medical needs, but it doesn't translate really into high medical spending.
We spend about $15,000 a year on medical expenses, probably actually a little bit less moving forward. It's obviously still high if you're not in the US, but I think in the US it's like pretty reasonable if you consider that premiums also factor into that $15,000 a year calculation. That's an all in number for all of us.
Charitable Giving Goals: Why Our $10,000 Donation Needs to Increase
We gave away $10,000 last year. Gave away is a strong word, but I definitely want to see our charitable giving number go up. It's going to be going up significantly because of some changes that are coming down the line at Sunnybranch Wealth. So that is really exciting.
But I think overall, given our net worth, given the amount we spend, that giving number should be pretty significantly higher. It's something that we're actively working on as a family and that we have our eye on, but it's also something that's honestly just hard when again, you spend $200,000 on your house and there are these upgrades that you really want to make to keep the house functional, secure it for another 100 years and also make it a comfortable place for us to live.
So an area where we were absolutely lacking, but we will continue on in the future. Stay posted for more updates on our giving journey this year. And then to round it out in the budget category, we spent $8,000 last year on our car and on gas, which I feel like is really low. I don't know how much other people spend. I mean, our car is paid off. We bought our car in 2016. So we've had it for almost 10 years. We bought it in cash. It was always paid off, but that's not relevant. We don't drive a whole ton. We spend maybe like 150 bucks, 200 bucks a month on gas. So it's not a huge expense for us, which is by design. We bought a house and a place that's super walkable, that's in the middle of the city.
Our 2026 Spending Plan and Quarterly Budget Updates
I work from home, my husband works from home. We basically take those kids to and from daycare, drive up to see my parents, nothing crazy. So that's the breakdown of how we spent $400,000 last year. The craziest part about this to me is that our spending in 2026 is probably not going to be that much lower, but we're not going to have a huge remodel. I've seen our spending increase pretty significantly in ways that I'm okay with at this point, but I'm also going to be doing quarterly check-ins. If you're interested in this, you should absolutely subscribe to the podcast, follow me on Instagram, sign up for the newsletter because I'm going to be doing these budget updates quarterly. Every quarter at the end of the quarter I'm going to tell you exactly how much we spent and how I feel about it.
If you have any questions about anything I talked about, you can shoot me an email, katherine@sunnybranchwealth.com. You can also find me on Instagram at sunnybranchwealth. And I'll look forward to talking again on the next episode of Heir Necessities.
Let’s take the next step together
Understanding how to manage, invest, grow, and/or give away multi-million dollar inheritance isn’t easy. Inheritors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, reach out to Katherine Fox, CFP® and CAP®, financial planner for inheritors, to learn how Sunnybranch can help you evaluate your financial situation and build a plan for your financial future.
