Fido’s Financials: Pet Planning for Your Wallet

Getting a pet is exciting, but they can have some costs that are worth reviewing your budget. It’s best for you and your pet to make sure you are ready for the new expenses. Interactive Brokers’ Senior Manager of SEO and Content, Cassidy Clement is joined by IBKR’s Senior Digital Media Producer at Interactive Brokers, Mary MacNamara. They discuss the various costs associated with having an animal, as well as questions you should ask yourself when selecting a pet based on your financial situation.

Summary – Cents of Security Ep. 11

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Mary MacNamara

Welcome back to IBKR’s Cents of Security. I’m Mary MacNamara, senior digital media producer at Interactive Brokers, and I’m joined today with my co-host Cassidy Clement, who’s the senior manager of SEO and content at Interactive Brokers. And today we’re going to discuss financial planning for getting a pet. What questions to ask when adding pet expenses to your budget? So, the first thing is we’re just going to dive right in. What are some of the things to think about choosing an animal and breed to match your lifestyle just to start off.

Cassidy Clement

To start off, that’s a great question. Thanks for having me, Mary. Great to be back. So, when you start to look at an animal in your life, sometimes you want to start to reflect a little bit on your own life. So, there may be active breeds and less active breeds. What’s more laid back and what’s better for a small home or an apartment, living style, what about the exercise and socialization that have to be given to this animal, and are there any breeds specific health concerns.  

After you’ve kind of looked at that, you might want to start to ask those introspective questions. Are you an active person or do you like to spend a little bit more time in the living room? Do you live in that small in an apartment or do you have that house with a yard? Bringing them all out and let them run till their hearts content? Or how about being a home body or a frequent traveler?  I know for myself, I love to snowboard in the winter, and I like to go hiking in the summer, but there’s sometimes where I might not have somebody to watch my little dog. So, I have brought him with me or make plans ahead of time.

How about regular grooming? That is an expense that sometimes people don’t always think about. You might know that your dog or cat sheds like crazy. But some of them actually still need to go in for that regular grooming, and that can be expensive.

It can range from $40 to get your own tools all the way up to over 100, especially if you’re looking for a certain type of cut or other types of specific grooming items. So, the final piece then is of course, the biggest thought – money to spend on vet care. That is something that after those regular checkups, life happens. Some animals have more medical needs than others and may be hereditarily exposed to other health concerns, whether it’s a cat, a dog, or other exotic animals, those are important things to think about.

Mary MacNamara

About, you know, it’s good you brought up the grooming part because one of the things that I didn’t realize is that I actually have to take my dogs in once a month to get their nails trimmed. And so that’s just an expense. It’s like, it’s basically like a pedicure for your dogs. Thinking about all those expenses primarily about dogs and cats, what are some things to consider as fixed or variable cost?

Cassidy Clement

So, when we’re looking at this from a budget perspective, we obviously might think at the basic level we have fixed, and we have variables. So, some fixed things, you know, food and water. Once they get a food that they like, some toys, a shampoo, if you have the regular grooming or do some grooming at home. Treats and then of course for the fixed cost. Usually, it would be a pet rent and then potentially a home insurance increase.

Variable would then be grooming and vet care, especially with inflation and the cost of other things plus services. There’s going to be some fluctuation in there, some other pieces that people don’t always think about when you just walk into your local pet store and take a look around. Is what about training, daycare, pet sitting? A dog Walker? These kind of go back to question one about what kind of lifestyle you have and what type of home you live in.  But these are pieces that may vary depending on where you live, where we are economically and last but not least, goes back to that breed. If you have a big dog or a cat that likes to be outdoors, you might have to look around for a different type of service than what is the run-of-the-mill item that you see as the starting point on the package for different pet services.

Mary MacNamara

So recently I think probably within the past 10 years, pet insurance is becoming more popular. Is it really worth it?

Cassidy Clement

I would say that as somebody who’s had animals on pet insurance and not covered by pet insurance, it’s something you need to look into depending on where your dog is at health wise.

But it’s also something that is, in my opinion, pretty crucial to pet ownership at this day and age. It was a lot different like a decade ago when it was first starting out. The company coverage was in a different structure, but now mainly companies are covering most of the time just dogs and cats.

That’s there are some exotic animal categories, but those are kind of rare to find. When you’re looking at this insurance piece, it’s important to remember it’s on a reimbursement structure. There may be a deductible associated that’s going to vary, but then you have a reimbursement amount that’s usually within a percentage range. So, you have like a 70-80-85-90, something like that and then there’s also a coverage limit.

Usually, these policies are on a 12-month period. You’re going to want to find something that fits that health picture currently of your animal. So, you know that some dogs, as they get older, they’re going to be prone to some more health issues. And sometimes some plans won’t cover those things.

Most plans won’t even cover spaying or neutering your animals, which is a surgery that most of the time is needed, and insurance is usually intended to be used for covering those unexpected insurances.

So that’s why researching and shopping around is important because you want to understand OK are there pre-existing conditions here that I’m going to be spending money on this policy that aren’t actually going to be covered. But there’s some other ways… If you can’t get pet insurance for you to think about budgeting and planning for your animal, there is self-funding of course. So, you may have a high yield savings account that you’re going to contribute to that is your little emergency fund in case furry friend decides it’s my time need a rock today. The other option too is your vet may have a payment plan or a favored credit card where you can look into at that clinic where you may be able to be charged less for the treatment that your pet needs. Or maybe there’s a lower interest rate on paying overtime for that animal’s care.

Mary MacNamara

So, bottom line, you want to research the pet insurance companies and there are quite a few of them out there, right?

Cassidy Clement

Absolutely, and there’s many different plans that you can look into. Again, got to think about your lifestyle, where you live, what your dogs are getting into.

So, if you have a pretty predictable lifestyle, cat goes outside on the porch once a day or dog goes out two or three times a day. There are accident only plans. There are accident and illness plans, there’s wellness plans as well.

But you want to make sure that if your animal is going to be exposed to a lot more things in the environment, that can be potential harms that maybe you find something that will help subsidize or cover these potential accidents or unexpected vet costs.

For example, some people don’t really think about dental coverage for some of their animals. I know my childhood dog that wasn’t as big of a deal as it is now, and that is an expensive procedure to get a tooth extracted or cleaning. Those type of things are sometimes additional pieces to your policy and that prescribed medical coverage.

Let’s say your dog got into something not so great, and now they have an upset stomach. For type of thing, they may have special prescription food until they get over that upset tummy. Until that gets done, that might be an expensive bill where you have to get your dog’s dog food or cat food from the clinic that your dog or cat goes to.

So those types of things are additional, and you may be initially like, wow, that’s the best, it’s the cheapest plan, but you want to see something that’s comprehensive to what you think could be a potential. The main four factors to look at when you’re researching – what’s your annual deductible, what’s your coverage monthly premiums and then of course the reimbursement percentage for what it covers when you’re doing these comparisons to different plans from different insurance companies.

Mary MacNamara

So, Cassidy, it seems like knowing your living situation is really important, obviously, but specifically for a dog. You may have a house where you have little kids. And you get a puppy, and I’ve often heard, and I believe this is true, that when you first get a puppy, they have to go outside and go to the bathroom, but they don’t know that, right? And you’re starting to train.

So, a lot of people, what they do is they do crate training, which sounds kind of cruel, but it’s actually not. And that is, you put your little dog, the puppy, in the crate. And then as soon as you take him out of the crate, let’s say you want to play with them and so forth, you take them immediately outside, so he knows that he has to go to the bathroom.  They frequently have to go when they’re puppies. And then you bring it back in. You play, play, play and then, especially at night, if you put them in the crate, as soon as you wake up in the morning, you take them right outside and so one of the hidden expenses there is the crate itself.

Cassidy Clement

So that’s just one element of like home fitting for your animal. How is this going to impact my animal and myself in my living situation?

So, let’s start you rent, or you own.  If you rent, there’s a chance that there may be a cat or a dog rent added to that, and that’s because of that potential issue of Oh, you know what? The dog didn’t make it out of the crate quick enough. Or, Oops the cat missed the litter box.

There’s a chance that there can be some damage within the unit. So, some home insurance companies also will have some restrictions on breeds as well as some buildings for renting, but that’s that extra deposit or sometimes they call it the pet rent or the pet premium and those types of things as well as the home repairs are some costs to think about.

So, you’re right, you might have the little ones running around. And they may already cause enough damage already that you have the broken vase savings jar for when somebody played ball in the house.

But you know, pets break things, chew things, scratch things. They get sick on things, and that could mean damage to anything that you could ever imagine! And whether you’re a homeowner or you’re renting from the coolest building in town, you need to be able to fix it or put up the extra cost for some of these repairs. Now, that also bleeds into when you travel, so you’re home away from home, whether it’s the condo, you rent every year at the shore or your ski house up north. Those things may have extra pet deposits or security deposits.  Even if it’s an Airbnb, there’s a cleaning fee sometimes or the pet friendly premium. And the pet friendly hotels as well. Those are types of things to think about.

And then the final piece that kind of has to go with where you live, and this is a little bit more of a dog centric item is a dog licenses. That is something that varies from town to town and based on whether or not your animal is spayed or neutered. And those costs are usually done through your town clerk or your government office and those are the things that you always see the dogs jingling as they walk. That’s what they’re wearing around their neck. It’s something new every year to show that they’re vaccinated and that there are licensed and documented in that town.

Mary MacNamara

So, I have to tell you this, it’s pretty funny, but not funny. So, we own a house. We rescued a dog and he’s a great dog. But when I came home from work, I discovered that he really liked to chew on the molding, baseboards, stairs, anything wooden. Then the other one he liked to chew the corners of a leather couch.

And so, there’s all things that happen when they’re just getting used to you. It’s like they’re in a new environment and in the case sometimes they’re young, they’re teething. And so, they just want to chew things. And so, you have to get these things fixed. And it does cost. But on that note, I think there’s so many positive things about having a dog. I mean, this is pretty much like we’re talking about all these expenses, so you’re prepared and so forth. And we also have another podcast on budgeting. So, this fits within that category of budgeting for your dog. So, one of the things I’d like to do at this point is to talk about the fact that you really want a dog but not yet. What are some things that you can do to have that pet experience, that dog experience, that love, that unconditional love in your own town or neighborhood or city.

Cassidy Clement

You can help with animal sitting like pet sitting volunteer at a local shelter. Donate different items to a local shelter. I know that usually they will have a needs list online that would say, “Hey listen you know what we really need this month is cans of cat food, dog toys, maybe some dog shampoo?” So, drop it off.

See if they need any volunteers to help socialize some of these animals. Check in to see if they need help in other events where some things like if you’ve ever heard the phrase like “Bark in the park”, things like that where different animal shelters will have events at parks where they bring in other animals, cats and dogs that are up for adoption. They may need volunteers to just come hang out with the animals.

And that way too, you may be exposed to an animal that you really like. You can talk to these shelters because they have processes that vet you and match you sometimes to breeds or animals that fit your lifestyle, and also let you know about the different health concerns that are along with that dog or cat because usually they come with a medical record already. So, they’re able to look back a little bit at what their past was.

Mary MacNamara

A lot of seniors aren’t able to, some of them may have joint issues, and so they’re they can’t be as active out walking their dog.   They would really welcome somebody to come on the weekends to walk their pet.

The other thing is fostering. So, a lot of the pet adoption places, when they get dogs, they will often place the new dogs that they’re rescuing in families or single living apartments.  Anybody can foster, but you have to have the setup and usually you have to be there to kind of socialize the dog. What that means is you want to get him acclimated to going outside to go to the bathroom. Also, if you have kids being like, not being afraid of kids, that’s called socialization. And also, if somebody comes to the door and rings the bell, FedEx or whatever, they’re not barking like crazy. And so, these are all really cool things you can do, and yet you don’t have that huge expense and also you don’t have that expense possibly for anywhere from 11 to 18 years.

Cassidy Clement

Absolutely. And it helps with your exposure as well to understanding where you are in your life with how much an animal life can impact yours. I think sometimes people may downplay it because there’s such a common thing in our society that everyone kind of has their little animal, which is their little sidekick. Animals are like little kids in the sense they all have different personalities, different needs, wants, and health issues, that it’s important to just vet your own self if you’re ready for that responsibility of taking it on.

Mary MacNamara

Is there anything else you’d like to add as we close?

Cassidy Clement

I think just to recap some final pieces that you should ask yourself. Just saying, “OK self, we’re going to do a little self-test”.  Let me see if I’m financially ready to take on a pet in my budget right now.

So, you want to hit a few main points? Let’s look at our housing, are we a homeowner or are we a renter?

And what is the possible increase for homeowners’ insurance or my pet rent and maybe take a look at that policy, whether you’re in a home or an apartment, because sometimes there’s restrictions and it’s hard to get around those.

Also supplies and food costs. Look at your vets in the area to see the costs, your licenses, the daycare, and pet sitting thing is huge.

You want to make sure that you’re around for your animal’s life and not that they’re just there for yours, and training and emergency expenses. The last piece, which Mary made a great comment on, which is about your local animal shelters, is thinking about adoption versus purchase.

If you are somebody who’s looking for a purebred animal, you may pay thousands of initial costs just to get the animal. And then the initial vet costs can be even larger, especially for certain breeds, whether they need initial checkups in their ears, in their paws, in their face, we all love a good pug, but we know that they have some breathing issues.

So, adoptions and these shelters and rescue areas, they can help reduce those initial costs because you’re making a donation usually. And those animals are usually spayed or neutered, microchipped, looked at by the rescues vet and sometimes if they were somebody else’s animal already, they will have a veterinary record. Use them as a resource.

They may make recommendations for you based on your lifestyle and the animals needs as well. They may look at you, and I’ve had this happen. I adopted my dog, love him to pieces, but it was not an easy process. They look at your financials, they want to make sure that you can provide for the animal longer than the 15 minutes it took you to fill out the application.

So, you want to make sure that you’re able to save up prior, have that emergency fund and look around at the potential vet fees and prices that you can incur and just stay ahead of it with that financial planning.  I think those are the best things to ask yourself when looking at taking this on because as you said, this is way more than a summer with the pup, this could be a decade or more that you’re bringing this animal into your life.

Mary MacNamara

But the best thing is, is that your pet, your dog, your cat will give you unconditional love. And it’s so great to come home after a hard day at work or being in traffic and no matter what the pet usually is, so happy to see you. They’re wagging their tail, they’re excited and it’s the best feeling, right?

Cassidy Clement

I think I’ve been to a surprise party, which is a close second where you walk in everyone’s like “woo surprise”. But coming home, the animals just it’s immediate hello and welcome. That is the best. And who doesn’t want that?

Mary MacNamara

Awesome. So, Cassidy, thank you so much. This has been great for everybody else listening in today. Thank you for listening. And please make sure if you did like this podcast to hit the like button. We really appreciate it.

Cassidy Clement

Don’t forget to review and rate us as.

Mary MacNamara

Well, we’ll be putting out additional topics in the weeks ahead. Thank you so much.