How Pet Owners Can Prepare for Financial Emergencies

Personal Finance
How Pet Owners Can Prepare for Financial Emergencies

RedBy Shanda Sullivan, CFP

Learn more about Shanda on NerdWallet’s Ask an Advisor

My precious red heeler, Red, recently tore his ACL and needed surgery. (You can see Red recuperating at left.) Fortunately, we were able to get him the care he needed, but I was in shock when my husband called to tell me that the estimated veterinary bill was $1,016!

According to the American Pet Products Association, dog owners will spend approximately $786 this year on veterinary expenses. That’s a big chunk out of any animal lover’s budget. After you’ve paid for food, supplies and grooming each month, it can be hard to afford regular vet visits, let alone emergencies.

When a family member needs medical care, you want to focus on him or her and not your wallet. This goes for furry family members, too. So what’s a good pet owner to do? Here are two ways you can prepare for pet emergences without breaking the bank.

Holding accounts

To help clients plan for emergencies — including car repairs and medical expenses for family members and pets — I recommend that they start a holding account that they can draw on to pay irregular, infrequent expenses. A holding account should have a balance of $500 to $3,000.

To maintain your holding account, include a separate line in your monthly budget — $100 to $200 — for contributions. This way, you’ll replenish what you’ve taken out.

The goal of the holding account is twofold: to help you prepare for the unexpected, and to make sure you don’t need to use credit cards to pay unexpected bills.

Pet insurance

Pet insurance is another option to help families prepare for pet emergencies, although I tend to recommend against it. Odds are that your pet won’t incur enough veterinary bills each year to justify the insurance premiums. And if you have more than one pet, those can add up.

However, if you visit the vet regularly or your pet is a breed that is known for health issues, you might want to consider coverage. Below is a comparison chart that looks at three pet insurance companies. There are many more out there, but this gives you an idea of some key items to look for when comparing plans.

Pet Insurance Plans for Dogs

 Healthy PawsPetplanEmbrace
Monthly premium$46.50$40.07$49.01
Benefit (Reimbursement amount)80%80%80%
Deductible$250$200$200
Limit amountUnlimited$10,000$10,000
Limit termLifetimeUnlimited lifetimeAnnual
Quotes are based on a neutered male 3-year-old black Lab.

Pet Insurance Plans for Cats

 Healthy PawsPetplanEmbrace
Monthly premium$24.93$15.82$25.01
Benefit (Reimbursement amount)80%80%80%
Deductible$250$200$200
Limit amountUnlimited$10,000 annual$5,000
Limit termLifetimeUnlimited lifetimeAnnual
Quotes are based on a spayed female 4-year-old tabby.

Pets bring joy, comfort and companionship to our lives. Why not celebrate them by planning for their future health needs? Whether you start a holding account or buy a pet insurance plan, planning for pet emergencies helps ensure that your pets are cared for when they need it, so that you can focus on what really matters — them.


Feature image via iStock. Red image courtesy of Shanda Sullivan.