Financial Planning for Your Pet's Care

There are 1 billion pets in the US. Two of every three households have at least one pet. Each year, $20 billion is spent on pet food and supplies. Another $10 billion is spent on health care for pets.

People who own pets feel more relaxed and are comforted by a pet's unconditional love and companionship. Studies have shown that pets are an ideal prescription to combat tension, anxiety, fatigue, depression, and high blood pressure.

Because our pets give so much to us, we should ensure they they receive proper care in return. But frequently, we don't. The proof stares at us from the eyes of the millions of animals that are abandoned to the streets or placed in shelters and euthanized each year.

Why does this happen? Often, pet owners just do not think to incorporate pets into their life planning. If you want to make sure that your pet does not end up an unfortunate statistic, here are three strategies to follow:

1. Set aside a pet emergency fund

If something happens to you, like suddenly losing your job or taking on a big expense, would you have money for the continued care of your pet? To make certain that your pet's short-term needs are met, you can create a separate fund to cover 3-6 months of living expenses.  

You should include all costs that you can think of, such as food, health care, and supplies. Costs are always rising and there may be expenses you haven't thought of, so it's prudent to estimate on the high side.

You might need this money without warning, so be sure to put it in an account that allows you to withdraw at any time without penalty.

2. Maintain adequate disability protection

Many pets face homelessness and death because their owners are disabled and can no longer care for them. It's common to think that this is unlikely to happen. We assume that the chances of our becoming disabled are low. But nothing is further from the truth. Accidents and illnesses can strike anyone at anytime. In fact, according to the US Census Bureau, you have a 1 in 5 chance of becoming disabled in your lifetime.

If you do not have sufficient savings to cover your expenses for 6 months, short-term disability insurance can provide you with income. Anyone without the means to sustain themselves indefinitely without income should have long-term disability insurance. Only with a dependable source of income can we keep our pets with us.

3. Plan for the care of your pet in case you die

If you died today, who would assume care of your pet? It's a mistake to assume that someone will—no one loves your pet the same way you do.

Your first step is to choose primary and secondary caregivers. Interview them and make sure they agree with your vision of what would happen to your pets after you were gone.

Next, consider purchasing an inexpensive life insurance policy or creating a trust that will specifically fund the care of your pets after you are gone. You can include pet care expenses and some compensation for the caregivers in the payout.

Finally, see your attorney and include your pet caregivers in your will. You can also put pet care provisions in your health care power of attorney, so decisions regarding the care of your pet can be made if you are not able to make them.

In return for the joy pets bring into our lives, the least we can do is ensure their continued care. Making pets part of your financial planning is the best way give them the consideration that they deserve.