Happy family outside with their dog

Most American households have a furry friend or two (or more) in the family. Around two-thirds of households report having a pet.

I have no problem with that; I appreciate what joy and connection pets can provide.

What I do have a problem with is that nearly 40% of pet owners recently surveyed by LendingTree said they had gone into debt because of their pet. And among households with pet debt, nearly 1 in 4 have at least $1,000 in pet debt. Adding a pet to your family and then finding yourself paying 22% interest on the credit card debt for pet care is so not okay in my book.

But to avoid this situation requires a “hope for the best, plan for the worst” mentality. Pet debt isn’t about affording the food.  What gets families into deep financial trouble are medical emergencies that require surgery or hospitalization, or severe illness.

The good news is that veterinary care has made big advances in treating cancer in dogs and cats. The bad news is the cost of that care. It’s not uncommon for lymphoma treatment to cost anywhere from $4,500 to more than $7,000.

If you have a pet in your family, you need a pet financial plan.

If you have a younger, healthier pet (or are considering adding a pet), you should look into pet insurance. Most policies will not cover pre-existing conditions, so the earlier you do this, the better.

A solid policy that covers both emergencies and illnesses may cost $40 or so a month. Like any insurance policy, you need to understand exactly what is covered, what your deductible is, and any co-pays. Ask your vet for any insights on good (and bad) policies, or log into a local pet group and ask for recommendations.

If your pet has pre-existing conditions, I want you to start building a pet emergency fund, pronto. This is separate from your family’s emergency fund. If you know deep down that you will want to pursue aggressive treatment in the case of a serious illness, that account needs to have at least $5,000 in it. That’s just a baseline cost for chemo. If you have multiple pets, you need more.

And please don’t shrug at this advice. This is not something you can afford to ignore. You and I both know what may happen: months from now, or years from now, that pet you adore—that beloved member of your family— may get very sick. And given your bond, you will not question doing whatever is recommended to help that pet, if there is a chance of recovery.

But if you don’t have insurance, or don’t have emergency savings you can use (and this must be in addition to your own emergency fund that can cover at least eight months of living costs), you will end up with pet-related debt.

I am not questioning how much you love a pet(s). I am asking you to do everything today to make sure that love doesn’t cause you financial stress.

 

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    Categories: budgeting, Emergency Funds, Financial Planning