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5 Financial Planning Tips for Pet Owners

More than half of all Americans own pets.1 Whether it’s a dog, cat, or less traditional pet like a guinea pig or lizard, animals are often an important part of the family. They can bring companionship and joy—but they also come with their own needs, expenses, and planning considerations. Here are 5 financial planning tips to keep in mind if you own—or want to own—a pet.

Expect ongoing costs

Pets aren’t a one-time expense. After paying for any initial adoption fee and vet visit, you can expect recurring costs for food, supplies, grooming, vaccines, check-ups, boarding, and more. For example, the average first-year cost to care for a dog (across all sizes) is $3,085, and the average lifetime cost is $23,410.2 For a cat, the average first-year cost is nearly $1,200.3 It’s a good idea to estimate how much pet ownership will cost you—and whether your budget can support it—before you welcome a pet into your home.

Consider adding to your emergency fund

Unexpected pet expenses may also affect your finances. In fact, 29% of dog owners said costs exceeded their expectations, and only 3% said costs were less than they anticipated.4 Just like humans, pets can become suddenly or chronically ill. To be as financially prepared as possible, factor these unexpected veterinary bills, which can run to several thousand dollars, into your emergency fund. (Also remember that Health Savings Accounts (HSAs) can’t be used for vet bills.)

Talk with your insurance company

Pets can be a financial liability. Being a pet owner means being prepared to deal with a broken fence—or a broken leg. Homeowner’s insurance may cover the cost of a broken fence, and an umbrella policy may extend liability coverage in case a dog bites or trips someone. Some insurers won’t cover homes in certain states if residents own certain dog breeds or “exotic” animals. Others exclude some breeds from liability coverage, or charge extra for them. Confirm your coverage with your insurance company, and consider modifying your policy if needed.

Look into pet insurance

If the cost of an emergency veterinary visit or serious illness would be a financial strain, pet health insurance may be a good option for you. As with your own policy, it’s important to read the fine print (what is covered, deductibles, pre-existing conditions, annual check-ups, dental care, etc.), because not all plans are created equal. The average annual premium for a pet accident-and-illness plan was $529 per pet in 2018.5 Pet insurance is becoming an increasingly popular employee benefit, so be sure to check with your company about availability and discounts before purchasing a policy.

Review your estate plan

It’s important to have a plan for how your pet will be cared for after you die. Since animals legally can’t own an investment account or property, you can’t gift money or assets to your pet. Making advance personal arrangements, including discussions with family members, friends, and an attorney, can help ensure that your pet is cared for if you become unable to do so. Keep in mind that the average life expectancy for a dog is 10–12 years, and for a cat it’s 10–14 years. Meanwhile, some parrots have lived up to 100 years!

Bottom line

The emotional benefits of owning a pet can be priceless. However, pet ownership requires special planning considerations. Costs of care, what happens to a pet when it becomes sick, and what happens if you can no longer care for it are all important issues to consider, whether you already have a pet or plan to down  the road.

1 American Veterinary Medical Association, AVMA Pet Ownership and Demographics Sourcebook 2017–2018.
2 Kelly Giffear and Brittany Scott, University of Pennsylvania School of Veterinary Medicine, 
What to Expect (Financially) When You’re Expecting a New Puppy,” 2015. 
3 American Society for the Prevention of Cruelty to Animals (ASPCA), “Pet Care Costs.”
4 American Kennel Club, “Costs of Dog Ownership,” 2004.

5 North American Pet Health Insurance Association, State of the Industry Report 2019.

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