Your Life Simplified

What Is the Real Cost of Owning a Pet?

June 9, 2022

Oftentimes, we only look at the short-term cost of owning a pet such as adoption fees, toys, food and vaccinations. However, other costs, such as pet insurance, additional vet bills and housing need to be considered before adopting a furry friend. In this week’s podcast episode, Valerie Escobar, senior wealth advisor, and Mike MacKelvie, wealth advisor are joined by very special guest Lucy as they talk about the real cost of owning a pet.


Valerie Escobar: If you’ve ever been in love, or know of someone that’s been in love, or at all familiar with the concept, you’ll know that usually love is coupled with some pretty irrational behavior. Today, we’re going to talk about irrational behavior, but also especially about love. Today, I’m joined with a very special guest. This is Lucy. I’m Valerie Escobar. I’m a senior financial planner. Lucy’s just a dog. And Michael here is also joining as well.

Mike MacKelvie: Yes, Lucy is definitely more special than me.

Valerie: Welcome to Your Life Simplified. And today, we are going to talk about dogs and cats and all the animals that we love. And the reason that I brought up love was just because as a pet owner, I have many, many pets, we know that, as Americans especially, we spend a crazy amount of money on our pets because we love them. The dopamine that we get from being around our pets makes it so that we become very attached to them and willing to spend exorbitant amounts of money. And so, I think today’s discussion, I like to go around how to prepare for that, how to be best situated, so that when the crazy stuff happens that we are able to cover those expenses and to make sure that we’re planned ahead.

Mike: Yeah. I mean, it’s an interesting query. You start talking about obviously the finances, and as soon as finances are meshing with something like love, the waters can get muddy as far as like, “Hey, what do I do financially here?” But obviously still considering your best interest, and you have this care and this love for this pet. So, I think because those waters are so muddy, it can be difficult. I mean, I think just right off the bat one of the questions I just have for you, because I’m not a pet owner, I was previously, but I’m not a pet owner, and I think a lot of people have this question is just, “Should I have pet insurance?”

Valerie: Yeah, that’s a great question. I like to start there, because as I said, for me, this is Lucy here, she’s seven. And luckily, Lucy’s going to live forever, she’s immortal. But most Australian shepherds have a life expectancy around 12 to 15 years. And so at some point, there’s a good chance that something might happen. There could be a big accident—she gets hit by a car. Or there could be more hereditary things, like maybe she has… hip dysplasia is pretty common, a cancer or some sort of thing. I am so emotionally attached to this dog that if I go to the vet… And here’s a story actually of a friend of mine.

Her dog had a bilateral TPLO surgery. Basically, both knees went bad at the same time. It’s a larger breed dog. It ended up costing her $10,000 to get that fixed. And me, if I went to the vet and they said, “Sorry, $10,000 or you’re going to have to let go.” I’m spending the $10,000. There’s just no question. And so, even though that’s a really bad decision, if I don’t have $10,000 and really, I mean, it’s just a dog, that love I feel is going to be overarching. And so, the question that you asked is about pet insurance. So, I’m going to talk about Pets Best, because that’s one of the most popular pet insurance out there.

They have an accident insurance policy, it costs $30 a month, so $360 a year. And it covers big accidents. It covers cancer, hereditary condition, emergency care surgeries, medicines for prescription medications. A $500 deductible, and then it covers 90%. So, if the $10,000 expense came up, it’d be a fraction of that. Maybe I’d be paying, well, if I could do math, that’s $1,000 or something. But if I put it into context and say, well, Lucy is seven, and another seven years, I’ll be out of pocket to $2,520 for the rest of her life. She has a $10,000 accident, and I’ve only spent $2,500. Yeah, it’s a no-brainer. It’s much easier. And even if nothing ever does happen to her, 30 bucks a month…

Mike: Which you would hope.

Valerie: …you don’t really feel it.

Mike: Yeah. Man, it’s one of those things where you hope that it doesn’t happen. I think what you’re touching on there is so important, that there’s this tendency to just want to always sometimes look at things just from a math standpoint. You hear that term, money is not math, math is not money. And you look at something like a pet, and you could say, “Yeah, financially, maybe it doesn’t make sense for two-thirds of the population to have pet insurance because, well, you’re better off saving the difference.” Then you play that scenario out of sitting there and having to maybe make that decision of, “Okay, am I going to pay $10,000 out of pocket? Or am I not going to take care of my pet?” Obviously, nobody wants to be in that situation.

And I think it’s crucial to look through it through the lens of, and which pet owners probably are better at than maybe people that don’t have pets of, “Hey, this isn’t just an odds game that I’m playing here. This is something where I just don’t ever want to be faced with that.” And for me personally, I just don’t ever even want to be in that situation where I have to make that decision of paying out of pocket or just not taking care of my pet. Is that kind of what you’re saying? Yeah.

Valerie: Absolutely. Yes. That’s exactly what it is. So that’s an accident policy. You can also get a well-being policy on top of that. And I did some math on this, too. So, there’s two, there’s a basic and an advanced… What do you call it? Like more…

Mike: Comprehensive.

Valerie: … BestWellness versus the EssentialWellness. More comprehensive, thank you. And really, the math comes down to… So, let’s say I get my comprehensive one, it’s $26 a month additional. So now, we’re $30 for the basic plus an extra $26. I mean, it’s starting to get substantial, but for that, effectively, it covers the things that you’re going to want to take care of. So, rabies shots, heartworm, just regular vaccines, annual health care, all of that. If I’m getting that advanced one, it’s going to cost me $312 a year, but I’m spending about… Let’s see, I’m spending about $650 at least, just for her medical stuff every year.

And so, if I get that BestWellness, it’s going to give me effectively a discount of $135 a year, and then it’s taken care of. So, it’s not a huge discount, $132 a year is not really that big of a discount. And then you have to go and submit the paperwork to get the deductibles and blah, blah, blah. So, that’s a little bit more of a hit in this. To me, it’s the catastrophic stuff that I’m most concerned about. And that’s a personal thing. If it motivates you to make sure you’re getting your vaccines, and obviously this is a very spoiled dog, she gets all the things because I don’t want anything to go wrong with her. So, yeah. So, that is available.

Mike: Yeah. As with any insurance, which this isn’t always the case, but it’s important to highlight. It’s the infrequent events that are high in costs that we should theoretically be insuring against. So, things that happen frequently… and this has always been really interesting to me, but for example, the percentage of people that have phone insurance versus life insurance. Just like a basic term insurance policy versus ensuring your phone. It’s like, “Well, yeah. I should insure my phone.”

Because I think just about everybody’s broken their phone at some point in time. But when you start playing things out, it’s pretty typical, depending on how you are with your phone, I guess, I’m a little worse, to maybe have insurance in those infrequent areas more than those frequent. So, is that what you’re saying here, as far as pet insurance? Maybe insuring, again, those larger costs, but you know, the more frequent ones, that’s a little bit more iffy?

Valerie: That’s exactly right. Yeah. If anything, I like to look at it and just say, “Okay, so these are the costs that I should be planning on if I’m going to own a pet.”

Mike: Got you.

Valerie: I’m not big on chasing down pennies. So, I think our guest is tired of this show. In general, she’s quite happy to be with me. So, she might abandon ship. You’ll have to excuse her.

Mike: I had another question for you.

Valerie: Please.

Mike: Again, this is a question that pops up at times. I think everybody rushes to the excitement of just owning a pet. I have a friend that literally just saw a post for a Scottish Fold cat, and that was it. I mean, she was gone, and she went and got the cat. Cat’s back already. How much does it cost? Lifetime cost, how much should one just anticipate the cost of a pet over the course of a lifetime?

Valerie: Yeah. So, I think one thing is, I’ve always been… So my expertise is mostly on shelter dogs and cats, because that’s where I usually get mine. So, 75 bucks, you go to the shelter, they spay or neuter them, give them their basic things, and you come home with a pet. And then you buy leashes and collars and food, and all of that stuff. That stuff’s pretty easy. If you’re going to go put clothes on your pet and give them treatments at the spa, that’s a different thing. I don’t know how much that stuff costs, but it can be a lot. But in general, I would certainly say $1,000 a year is probably a pretty light commitment. Financially, you’re going to say that’s the bottom floor to get in. You want to take good care of a pet, and it’s going to probably be about $1,000 a year.

Mike: Yeah, which I mean, the ROI there, I’m sure any pet owner would say, is well justified.

Valerie: That’s exactly right. A hundred percent. And like you said, money is emotions. I’m never going to tell my client, like, “Sorry, you’ve got to give up your pet. Because that’s just not going to fit in your budget.” It’s more like, “How are we going to get rid of other things?”

Mike: How do we get this done? Yeah. And it’s always interesting, people seem a lot more confident in their answer before they get to that moment in time. And I would say it’s very similar in a lot of ways to college, and parents paying for college. And as soon as the child gets to that brink of, “Okay. Hey, I’m going to have to cover $10,000, $20,000, let’s say, extra just in college.” And the parents have enough saved up to maybe pay for half of it or two-thirds of it.

It’s interesting how many parents switch their narrative, and suddenly say, “Yeah, we should really consider maybe taking on a larger part of this cost, either in the form of a parent plus loan or something else.” I think having that vulnerability to maybe say, “Okay, there’s a pretty large chance I’m going to get emotionally connected to this pet. And I maybe just don’t want to be in that situation.” I think that’s intelligent in a different way that’s not just math, as we’ve touched on.

Valerie: Right. Absolutely. Yes. I mean renting a pet, I have a friend, a couple that they are not pet owners, but they very frequently babysit Lucy for me when I’m out of town and things. And I think it works really well, because the other consideration is housing. This is a true story, and it’s ridiculous. But when I moved to Kansas City, I wanted to rent first because I didn’t know the area. She’s chewing on her toes. That’s gross. I have two cats and a dog. And I was like, “Where am I going to live?” Looking for places to rent, nobody’s going to rent a house to you or apartment with three animals. And so, I literally bought a house for my pets. You know how stupid that is? But I was like, “Well, I don’t have anywhere to live. I guess I have to buy them a house.”

Mike: Housing went up quite a bit here recently. So, I ended up working. Your pets, I think they just well justified their costs.

Valerie: Right.

Mike: I mean, ROI right there. They just pushed you to buy a house, and maybe that got you in and you ended up making it back on the equity.

Valerie: Thank you. That is a great point. They’ve made me probably 20% over the last two years, three years. Another friend of mine said that her dog is old and it can’t do stairs. So, they have to find a one story. Just so many different things like that. You can’t date somebody if they’re allergic to cats, and I’ve got cats.

Mike: That’s me. I’m allergic to cats. Yeah. That’s part of the reason why I’m not married yet.

Valerie: Oh, okay. I was going to say, you got to put that on your dating profile, allergic to cats. Sorry.

Mike: It’s a big deal. It’s a big deal for some people. I do have another question, too. You may have touched on this a little bit, but how do you even go about… Let’s say, you listen to this or just in general, you’re just like, “Hey, I want to get some type of pet insurance policy.” Maybe it’s more in the accident, let’s just say, realm. How does that process work? I mean, I know how it works with life insurance, where you maybe have somebody come out and do a medical, and you fill out a questionnaire. How does that work? Obviously, there’s so many different types of breeds and situations, pre-existing conditions. How does that work?

Valerie: Yeah. So, with the pets, you tell them the age, the breed, and if there’s been any medical history in the past. They won’t come out and do, like you said, full underwriting or anything like that. But given really large dogs will have joint problems, really small dogs, like pugs, they have a short nose, they’ll have a lot of breathing problems. And so there’s a lot of just statistically, depending on the breed, that that’s what the different costs are. Like I said, those costs that I was talking about are about Australian shepherds or a medium-sized dog. They don’t have a ton of health issues. If you go to the shelter and get a mutt, mutts are usually much more healthy, because genetically, there’s not inbreeding that happens. So, that’s another thing.

Mike: Interesting.

Valerie: Yeah. So, get a mutt. They’re cheaper, they’re cute and they have less health problems.

Mike: I guess from the outside, that’s surprising. I’ve had dogs, but I mean, I wouldn’t say I’m well versed. I wouldn’t have guessed that. That’s surprising.

Valerie: Yeah.

Mike: Interesting.

Valerie: Yeah. For cats, I think that’s probably about the same thing. I’m much more of a dog person. Cats, they’re probably going to plot to kill you, in case you were curious. Good. I have two. But I still survive. But yes, I have much more dog knowledge.

Mike: Any other just thoughts or just points that are worth considering, as far as just in general cost of ownership with pets, but also just things that financially, maybe one should be thinking about when it comes to pets?

Valerie: I think just think ahead. When things are going to get tough, you emotionally are going to be unable to make smart decisions. I’m not going to look at my checkbook and be like, “Sorry, I’m short on money.” And things just cost a lot, and they add up. And so, having that budget and not just saying, “Ah, she’ll be fine on cheapo food, and you don’t need vaccines.” You’re going to get attached, and you’re going to want to spend that extra money. So, just trying to be smart ahead of time, I think, is the best route.

Mike: Yeah. I think too, it can create an interesting dynamic in the relationship. Because you’ll have varying opinions about how something should be handled. Because maybe, it’s something that is not life-threatening, but would obviously help the dog, but it costs $6,000, $7,000. And one spouse might say, “Maybe we shouldn’t do that.” Another the other spouse is like, “Are you kidding me? How can you even flinch?” So, like estate planning in certain ways, it can lead to maybe some internal conflicts that aren’t desired, and in addition to just not wanting to ever be in that spot. Right?

Valerie: Yeah.

Mike: Well, thanks. Thanks for sharing. I mean, again, this is just something that obviously, I don’t know a ton about. And is there anything else worth considering beyond that or just things you want to share?

Valerie: I don’t think so. I mean, as always, email us, contact us. If you have other questions, we can help with that. But yeah, I think just in general, it’s going to cost a lot of money, but you know, when your heart is involved, go for it. Just plan ahead.

Mike: Yeah. Well, thank you, Valerie. That was insightful. Again, as I mentioned to you before, I’m excited just to learn a little bit more about this, because I don’t know anything, really, about it.

If you’re listening to this, Apple podcasts, YouTube, wherever it is that you’re listening, make sure to hit Subscribe to get more content from industry professionals about these different types of subjects. Whether it’s pets, just wealth management, just general financial planning, make sure to hit that Subscribe button.

Thank you for listening to Your Life Simplified. I’m Michael MacKelvie. I’m joined by Valerie Escobar. Thank you.

Valerie: Thank you.

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