Top Five Expense Categories and Inflation Factor

Dan’s post ‘Insomnia and the Back of an Envelope’ motivated me to review our expenses.  Our top five categories are property taxes, home/car insurance, utilities, groceries, and healthcare premiums/deductibles.

Our home property taxes increased 23% from 2023 to 2025 while our home value increase 17%. The value of our ten-acre plot went down 1.6% from 2023 to 2024, but then increased 23.5% from 2024 to 2025 and property taxes increased by 30%.Home insurance went up 46% from 2023 to 2025, while the insured value went up 8%. The car insurance remained unchanged (my car insurance went down $6 and my husband’s went up $59).  Surprisingly, our umbrella insurance went up 30% from 2024 to 2025.  (no claims, no accidents, no tickets)Electric was up 15% even though our usage dropped 1.3% from 2023 to 2024. The other utilities only went up 1%My healthcare premiums (Medicare Supplement) went up 9.5% from 2023 to 2024, but my husband’s (Medicare Advantage) remained unchanged. Our dental insurance went up 8.1%.  I haven’t seen the increases yet for 2025.  The Part B Medicare premium increased from $164.90 in 2023 to $174.70 (5.9%) in 2024, and to $185 (5.9%) in 2025.  The Part B Medicare deductible increased from $226 in 2023 to $240 (6.2%) in 2024, and to $257 (7%) in 2025.

These categories make up over half our spending.  Adding in groceries gives me the top 5 line items of our spending.   Home maintenance hasn’t been an issue since we recently built, but over time, that could be a contender.  So going forward, I’ll continue to track these top 5 categories.  (Kinda the 80/20 rule.)

In the past, I’ve used a 3% inflation factor to forecast expenses.  What inflation factor do you build into your assumptions?  Are you seeing higher percentage increases in your top 5 categories of spending?

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