5 Financial Moves to Consider Before You Get a Pet

Like so many other pet parents, it's impossible for me to fully explain the deep connection I have with my sweet Maltipoo mix, Lulu, and the joy she brings me every day. That said, I also know that properly caring for her comes with responsibility—and a price tag.

I recently experienced pet care sticker shock when I returned to office after working from home for several years. Lulu began barking during the day and neighbors complained. I understood that Lulu was barking because she was lonely! So, I immediately enrolled her in doggie daycare, to the tune of $35 per day, with extra charges if I can't pick her up by 5:00!

So, before you rescue that adorable kitten or puppy, do some soul-searching and some research. Consider your lifestyle, work and family obligations, and housing. Does this add up to a happy and healthy environment for a pet? If you can answer a resounding "yes" to these questions, then it's time to evaluate the costs of pet ownership stacked against your other financial priorities.

I often hear other pet parents say that caring for a pet always costs more than you think and can cause some financial stress. Surveys bear that out. Dog owners spend an average of $376 per month on their dogs, or $4,512 per year, according to a USA Today Blueprint survey. This includes day-to-day expenses like food, supplies, grooming, routine vet care, insurance, training, and dog walking, but also includes occasional costs such as boarding and vet care in case of an illness.

Before you go to an adoption event or visit a breeder, review your current budget and monthly cash flow. If you don't have a budget, create a list that breaks down your monthly living costs including fixed expenses (items like housing costs, food, utilities, loan payments) and variable expenses (entertainment, dining out, vacations, etc.).

Subtract the costs from your net monthly take home pay. Does this show a significant monthly cash surplus? If yes, consider how diverting some of this money to the cost of pet ownership could impact your other financial priorities—like your ability to pay down debt or save for retirement.

If you don't have a big cash surplus in your budget, what if any discretionary expenses are you willing to cut down on to support your pet? One of my friends did this budgeting exercise. She realized that based on her lifestyle and pet choice, she would have to give up one vacation a year to ensure she would not put her future or her pet's care at risk. I am happy to report that two years later, she says swapping one "away" vacation for a staycation and having a life with her dog, Magnolia, is nothing less than priceless.

Just because you like the way a particular animal looks doesn't mean it is the best match for your household and pocketbook. Explore the unique needs of your potential pet and assess how it could impact your budget. For example, long-haired cats may require more professional grooming than short-haired cats, and some purebred breeds may be prone to some types of genetic health issues.

If you are a homeowner, check with your home insurance company. Some home insurers may increase your premiums or choose not to cover you if you own certain dog breeds. If you become a dog owner, you may want to consider additional liability coverage in case of dog bites. If you rent, some landlords require additional "pet deposits" or "pet rent." All of this can have a big impact on the amount of money you may need to spend over your pet's lifetime. Do your research first so you know what you are getting into.

Do you want to pay for pet insurance premiums (and any deductibles), or do you want to "self-insure" and pay out-of-pocket as expenses arise?

Consider your personality and potential for deep emotional attachment. If you are the type that might want to go to great lengths to take care of your pet, you may want to consider how insurance could help. My niece, a recent college graduate, had a cat that unfortunately developed cancer. She said she would do anything to keep that cat alive—and that anything cost $8,000. Thankfully she had pet insurance and was able to get reimbursed for a majority of the expenses. When asked what she would have done if she didn't have pet insurance, she admitted she would have pulled cash out of her 401(k) plan or even sold her car. Ouch.

It's good to know that pet insurance will typically not cover pre-existing conditions. So, if you decide that you want insurance, purchase a policy when your pet is young and healthy.  Also, all pet insurance policies are not equal. They may have different reimbursement percentages, deductibles, and exclusions. Take your time, evaluate your choices, and understand the details of a policy before you buy. As a guideline, an average pet insurance policy with $5,000 annual coverage, a $250 deductible, and 80% reimbursement level will cost about $50 per month in 2024, according to Forbes Advisor.

I always recommend that everyone have enough cash on hand in an emergency fund to cover a minimum of three to six months of your living costs.  This cash reserve can tide you over in case of a prolonged illness, unexpected expenses, or job loss. Once you're a pet owner, you'll need to increase that amount to include expenses for your pets. Although pet ownership is a choice, once you have a pet, taking care of it is not.

If all of these expenses feel overwhelming, don't despair.  With some creative planning, you might be able to reduce your costs significantly. For example, will your employer allow you to bring your (well-behaved) dog to work? Do you have trusted friends or family nearby who can act as a second family when you're not home?  Can you learn how to groom your pup or cat yourself? All of these savings can add up.

If you're fortunate enough to have the time, money, and desire to properly care for a pet, congratulations! On the other hand, if you question your ability to care for a pet day-in, day-out, year-after-year, there are lots of ways you can enjoy the pleasure of a pet's company without all the responsibility and cost. You could foster a pet short-term, be a pet sitter for family and friends, and/or volunteer at your local animal shelter.

Regardless of what you decide, the bond and unconditional love you share with an animal is like nothing else—as my Lulu and I can gratefully attest. Best of luck in discovering the solutions that will work best for you, your lifestyle, and of course your finances.