From warm laps to wet licks, the affection that pets bestow upon their people is priceless. But as amazing as sharing your life and home with a companion animal can be, it’s not a free ride. Indeed, Americans spent an estimated $50 billion on their pets in 2011, according to the American Pet Products Association. That’s right, billion.
From food to veterinary care and beyond, pet guardianship comes with financial responsibilities, whether your companion is feline, canine, equine, aquatic or otherwise. First-year expenses alone for a relatively young dog or cat, for example, can range from $500 to $5,000. Ongoing expenses, both expected and unexpected, can add up quickly, too.
The best strategy for fulfilling the financial responsibilities that accompany pet guardianship? Plan ahead! Here, courtesy of the pet-adoring personal finance experts at the Financial Planning Association® (FPA®) are suggestions for handling the practical side of owning a pet, so financial worries won’t spoil those warm and fuzzy moments.
Factor pet care costs into your household budget. “It’s a matter of just building pet-related line items into your budget,” said Amy Jo Lauber, CFP®, of Lauber Financial Planning in West Seneca, N.Y. Account for basics like food, veterinary care, bedding, toys, etc., as well as other expenses like training, grooming, day care and vacation care (boarding, pet sitting) and end-of-life costs. Keep in mind, costs associated with pet ownership vary GREATLY by the animal’s species, breed and age. Keeping a few goldfish costs much less than caring for several large-breed dogs, for example.
Create (or add a pet care component to) an emergency fund. An emergency fund with money earmarked specifically to cover unexpected major expenses and events (job loss, health crisis, etc.) is a necessity for any household. Lauber suggests that pet guardians add a little extra to their emergency fund to account for unexpected pet-related expenses. Be sure those funds are safe and readily accessible.
Set spending limits in advance. It makes sense to have a firm idea of how much you can afford to spend on a pet’s healthcare before a health crisis strikes Fido or Fluffy, creating a potentially very unpleasant dilemma. Is it wise, for example, to pay for expensive cancer treatments that may or may not extend an animal’s life by a few months? “Providing for a pet’s medical care can be a highly emotional expense, and it’s a very, very slippery slope,” explains Lauber. “Deciding ahead of time how much you’re willing to spend on medical measures for a pet helps you make more rational decisions during the heat of the moment.”
Consider pet insurance. One way to avoid being ambushed by a large pet healthcare expense is with pet health insurance. It works much like health insurance for people: you pay regular premiums, set deductibles and, in return, the insurance company covers a percentage of the pet healthcare expenses you incur, up to a set annual limit. A typical plan can easily pay for itself when illness or injury strikes. The key is finding a policy that’s best suited to you, your pet and your budget. Start by researching the various companies that offer policies at a web site such as www.petinsurancereview.com.
BOILERPLATE
October 2012 — This column is provided by the Financial Planning Association® (FPA®) of Massachusetts, the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning. FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process. Please credit FPA of New England if you use this column in whole or in part.
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