This article was originally written by Susan Doktor
Pet lovers are a different breed in some respects. Our Facebook reels are chock full of cute kitty videos. We can’t help but stop and say hello when a beautiful Golden Retriever crosses our path.
But successfully managing our personal finances is a goal that cuts across all kinds of people. Pet parents just have another wrinkle to consider: being prepared to give our furry dependents the happy, healthy lives they deserve. And that means managing veterinary care bills. On average, pet owners spend between $374 and $980 every year on routine vet care. Cat owners have it a little bit easier than dog owners but, either way, vet costs can take a chunk out of your budget. Does that figure surprise you? You’re not alone. Most pet parents underestimate the cost of pet ownership. Consequently, they are often ill-prepared to manage pet expenses. And that can result in pets not getting the health care they need. Sadly, affordability is a factor in pets being given up for adoption or even euthanized. If you care deeply about animals, going into pet ownership with your eyes wide open is essential.
So how can you be sure you’re able to manage the cost of healthcare for your beloved companion? It comes down to being smart about personal finance. Let’s take a look at some of the ways you can guarantee that you’re financially prepared to maintain your pet’s health and even manage the emergencies we often face as pet parents.
Tip Number One: Start an Emergency Pet Fund
It’s fairly easy to estimate the cost of routine pet care. Most pets should have two well visits with their vets per year. These visits involve exam fees, which, depending on where you live, can run between $50 and $250. Many vets recommend annual fecal exams and heartworm testing, which adds to the cost of preventive care. Periodic vaccinations for such life-threatening diseases as rabies and distemper increase the cost of routine care by between $80 and $250 per year, depending on which vaccines your pet is due for.
All of those costs fall within the realm of expected and you may be able to manage them as part of your monthly budget. What often creates havoc in pet owners’ lives are the unexpected costs that come with serious illnesses and accidents. That’s why the first financial step pet owners should take is creating an emergency pet fund. We recommend setting up a separate savings account for this purpose. Ideally, you should set up monthly deposits to your pet emergency account. The easiest way to do it is to time deposits to coincide with your monthly or bi-monthly paychecks. That’s easy to do when you do your banking online. At a minimum, we recommend you maintain a $1000 balance in your emergency pet fund. Depositing just $20 per month in your account will get you to that goal quickly. It’s best to have your fund in place before you bring a new pet into your home. But to cover all your bases, don’t stop there. Some veterinary treatments are very costly: cancer care and orthopedic surgery are among them and are more common than we like to think, particularly in certain breeds. Almost half of all dogs will develop cancer after the age of ten. It’s a grim statistic, but it’s something to take into account when saving for pet expenses.
Tip Number Two: Earn Money by Investing Conservatively
Once you’ve established an emergency fund, you may want to consider putting any additional money you can save into conservative investments. A financial advisor can point you in the right direction by recommending investment vehicles that have history of reliable performance. Conservative investments won’t make you rich overnight. Higher returns on investment are associated with more risky assets. But there are plenty of investment options that balance risk and reward.
You can start by visiting TreasuryDirect.gov. Treasury bills and treasury notes. Treasury bills are sold for less than their face value and you can buy bills that mature in a very short time: between just a few days and 52 weeks. Treasury notes have longer maturity times—they’re available for 2-, 3-, 5-, 7-, and 10-year terms. They pay interest every six months. But both T-bills and T-notes are considered exceptionally safe investments because they are backed by the US government.
Certificates of deposit and money market accounts, available through your local bank or credit union, are also considered sure bets. Assuming you follow the requirements for the type of account you open, such as maintaining a minimum balance and limiting the number of transactions you make using your account, CDs and money market accounts can’t lose money because they are insured for up to $250,000 by either the Federal Deposit Insurance Corporation (FDIC) or, in the case of credit union accounts, the National Credit Union Association (NCUA). CDs are more like bonds: they have longer maturity dates. Funds deposited in a money market account are more liquid—you can use them as you would a checking account. You can make periodic withdrawals from them without incurring any fees. Again, CDs and money market accounts don’t return a lot on your investment. And given the high inflation rates we’re experiencing now, they may not offer much return at all. Be sure to compare the interest rates offered by these accounts to the current rate of inflation and economists’ inflation predictions to find out whether investing in CDs or the money market makes sense right now.
Tip Number Three: Dip Your Toes in the Stock Market
Financial advisors recommend that clients develop a diversified portfolio of investments. That often means buying a mix or low-risk and higher-risk assets. It also means investing across a wide range of industries or commodities—just in case one of them hits hard times.
Once upon a time, stock market investing used to present a lot of obstacles for small investors who didn’t have enough to invest to attract a stockbroker or pay the commissions associated with trading. But the market is different today, due in large part to technology. The advent of low-fee and no-fee stock trading apps has leveled the investing playing field.
Investment apps make use of artificial intelligence and the same sophisticated data that real live stockbrokers use to make investment recommendations. Beginning investors can rely on them to build diversified portfolios for them. You can tailor your investments to suit your risk profile now and make changes as your needs and attitude change. Experienced investors can easily chart their own investment courses using these apps, as well. Most apps offer commission-free trading nowadays and are free to download.
Some investment apps integrate other personal finance features, such as automatic savings and budgeting assistance. If you’re trying to set aside funds to ensure your pets’ health and wellbeing, those features can certainly get you on the right track.
Tip Number Four: Consider Investing in Non-Traditional Assets
If you follow the news with any regularity, you’ve no doubt heard about investing in cryptocurrency. Many people—call them trailblazers—who invested in crypto when it was first invented, have seen their fortunes rise at a phenomenal rate. But crypto ownership has become more mainstream. By 2021, about 16% of Americans reported they’d purchased cryptocurrency. For those who can manage the volatility of the cryptocurrency markets, experts say there’s still money to be made. All you need is a cryptocurrency exchange—a place where you can buy crypto-assets—and a crypto wallet, which makes it possible to transact crypto business. Some exchanges are like crypto supermarkets, where you can choose among dozens of crypto brands, and others are more like boutiques, where all the crypto available is under the same label. While the number of businesses that accept cryptocurrency for payment is relatively small, it’s growing. Cryptocurrency may soon be coming to a veterinary clinic near you.
Tip Number Five: Join a Pet Expense Sharing Plan
Eusoh is a unique community-based organization that helps pet owners pay for the inevitable veterinary expenses they’ll incur. It’s based on pet owners helping pet owners. Members pay two fees: a monthly membership fee and another fee that goes toward sharing the overall veterinary costs all members incur. It’s different than pet insurance and, in most cases, is less costly. Many pet owners find Eusoh a no-brainer. The easiest way to manage large veterinary expenses is to have someone else pay for them, right? For pet parents, Eusoh membership can serve as the foundation of a smart financial strategy. Eusoh membership stands out as an investment choice because it’s no risk and puts our pets’ health first. It pays for itself when your pet falls seriously ill and you have expenses to share. But it also pays us back in peace of mind, knowing we’ll always be able to provide our pets with the care they need.
Susan Doktor is a journalist, business strategist, and lifelong pet owner. Her contribution comes to us courtesy of Money.com.