By Jessie Butler, CFP®, Principal, Private Client Advisor
In January 2023 my family said goodbye to our 16-year-old puggle, Jack. That was one of the most difficult days our family has ever experienced together; I miss him every single day. Recently, our kids have been hounding us for another dog, but I am reluctant. I am still grieving the loss of Jack, and the responsibilities of pet ownership (both practical and financial) are numerous; they require thought and planning. While the animal lover in me finds it almost impossible to resist the urge to adopt every animal in need, the rational thinker/financial planner in me taps the brakes before signing any adoption agreements. If we wish to ensure that a prospective pet has the best chance for a happy life, we need to do our homework first.
First, let’s talk about cost. How much does it really cost to care for a pet? That depends! When it comes to their “fur babies,” many pet owners are willing to spend gobs of money on health and happiness – no questions asked. In 2023, US pet industry expenditures reached $147 billion; that number is expected to top $250 billion by 2030, according to the American Pet Products Association. According to Rover.com, in 2024, the annual cost of caring for a dog might range from $1,000-$5,225 and the annual cost of caring for a cat can range from $710-$2,865. These figures include the cost of food, grooming, and routine vet care. And that doesn’t even factor in the cost of treats, toys, training, and daycare!
Historic inflation over the past few years has made budgeting a challenge for many households. Increases in housing, healthcare, childcare, and consumer debt service costs are significant factors for families deciding when (or if) to have children. A recent report published by the Centers for Disease Control and Prevention showed that, in 2023, the birthrate in the US reached an historic low, decreasing by 3% from 2022. If not starting families, what are people spending their money on? In many cases, pets!
Gen Z, Millennials, and Gen X represent a combined 74% of pet owners in the US. At this point, you may be asking yourself, “How much does it cost to own a pet anyway?” The answer is more than you think.
At this point you may be asking yourself, how much does it cost to own a pet anyway?
Over the past few years, veterinary medicine has seen a large increase in costs, which has trickled down to pet parents. According to Bobbi-Jo Dobbs, the Medical Manager for the Homeless Animal Rescue Team (HART) of Maine, the cost of basic things such as pet foods, medication, and regular veterinary care have jumped anywhere from 20% to almost 50%. A tight labor market, transportation costs, and lack of availability of raw materials have driven up costs of pet food. Some pet owners may be forced to buy lower quality food and skip medications and treatments until it is a desperate situation. This drives the increased cost to shelters as pet parents can no longer afford their pets and therefore, the pets are surrendered. According to Dobbs, shelters are receiving pets that are lacking basic veterinary care.
Planning is Key |
What Can You Afford?
Nearly two-thirds of pet owners say they would have difficulty paying a surprise vet bill, according to a recent article from Forbes Advisor. Of those, 28% said a vet bill of $499 or less would cause them to go into debt and another 42% said that a vet bill of $999 or less would cause them to go into debt. Planning for the expected as well as the unexpected costs can prove to be invaluable for your budget. First, review your monthly cash flow. After subtracting out your fixed and variable expenses, debt service, and savings, determine if you have discretionary funds left over. How much you can set aside to support a pet? Consider establishing a “pet fund” for veterinary emergencies.
Consider establishing a “pet fund” for veterinary emergencies.
What Type of Pet Fits Your Lifestyle?
Remember to do your research before bringing a pet home. What kind of food, habitat, and exercise space does the animal require? Will you be able to financially support these needs? What is the life expectancy of the animal? Cats can live up to 20 years, rabbits live 10-12 years on average, and some parrots live to be as old as 30 years. Some animals require more exercise, activity, grooming, and veterinary care than others. Some have dietary restrictions. Our dog Jack was allergic to most commercial dog food. Instead of purchasing specialty dog food for $50/bag, we turned to homemade food and vitamin supplements. These are examples of factors that should be considered when comparing a pet’s needs to your own lifestyle.
Does Your Homeowner’s Insurance Provide Coverage?
If you are planning on bringing home a dog, take a closer look at your homeowner’s or renter’s insurance. Confirm that the insurance policy will protect you from liability or property damage in the event of an accident or incident. Depending on the state you live in, certain insurers have a list of commonly excluded dog breeds (dobermans, pitbulls, rottweilers, etc.) And other insurance companies exclude coverage for all dogs.
Who Will Provide Care When You are Away?
If you are someone who works outside of the home or someone who travels frequently, you may want to consider the annual cost of a pet daycare program, hiring a pet-sitter, or boarding your pet while you are on vacation. Each of those services can cost about $50/day on average.
Do You Need Pet Insurance?
Finally, consider pet insurance. The best time to purchase a policy is when the animal is young, accident prone, and likely without a medical history. As with humans, the older the animal gets, the more medical needs there are. Finding a policy that will cover a pre-existing condition is nearly impossible. The price of pet insurance policies varies widely from pet to pet and depends largely on the insurance carrier, state of residence, the age of the pet, the breed of the pet, and any add-on features you may wish to include. Pet policies typically do not cover routine vet trips and are primarily used to cover accidents. Deductibles range from $300-$1,000 with maximum out of pocket limits between $5,000-$10,000.
The best time to purchase an insurance policy is when the animal is young.
Sharing your life with an animal can be one of the most rewarding experiences in your lifetime. Animals accept us no matter who we are, where we come from, or how much money we have. Planning to welcome a new pet into your home takes a little bit of foresight and homework, but that wagging tail is worth every penny. With good planning in place, you are doing your best to ensure a long, safe, and healthy life for your pet in your home.