This is what it really costs to have a pet

My friend Rhonda recently raved about the $40 shampoo she purchased for George - the love of her life.

"The fragrance is amazing. I just want to run my hands through his hair," she said, giggling. "Awesome!"

I gushed, inwardly cringing at the expense. I'm not convinced her extravagance will be appreciated, let alone noticed. George is not Rhonda's husband. He's not even her boyfriend. George is a Cocker Spaniel.

Rhonda is not alone. Pets outnumber people in Australia by about three million. RSPCA data shows close to one in two of us owns a dog.

A further one in three shares their home with a cat. Many more own birds, fish or reptiles. Add in the 400,000 people who keep backyard chickens, and it's easy to see how the nation's 29 million pets play a huge role in our lives.

They can also punch a big hole in our household finances.

How much do Aussies spend on pets?

Commonwealth Bank research found that pet owners lavish about 10% of take-home pay on their pets. All up, dogs cost about $4247 annually, while cats demand a yearly spend of about $2718.

It's a meaty chunk of cash, so where is all the money going? As the table shows, food is the main expense, followed by vet bills - more on this later. However, we are also forking out on pet-related costs that would have been unthinkable a generation ago.

Gone are the days when Spot would be home alone for 10 hours each day, digging holes in the backyard while his owners were at work.

Doggie daycare is thriving, with half-day 'play sessions' often costing upwards of $50. The websites of providers use terms, such as 'enrichment' and 'socialisation', that you're more likely to see on childcare organisation's website.

No time for walkies? No problem. Professional dog walkers will happily step in at a cost of about $30 per walk.

We are also taking our pets on vacation.

Virgin Australia let the cat out of the bag earlier this year, announcing plans to allow pets to travel alongside their owners. It will cost extra for your pooch to share the skies, though it won't be a luxury experience for little Rex, who will be shoved under the seat in front in a dedicated pet carrier.

At the extreme end of the wedge, a more luxurious experience is offered by BARK Air, a new airline in the US that kicked off in May.

With aircraft cabins featuring 'calming aids', such as lavender-scented refreshment towels, and bone broth to ensure four-legged passengers don't experience discomfort from changes in cabin pressure, this sort of luxury isn't cheap. A six-hour flight from New York to Los Angeles for one dog and their human chaperone costs $US6000 - about $9050.

The expense isn't limited to the living. When Fluffy finally passes away, with the promise of freeing his owner from financial servitude, a new cost arises. Instead of burying the dearly departed 
in a corner of the garden, we can now have our pets cremated.

Pearly Mates Cremation Services, for instance, charges bereaved owners about $150 to cremate smaller pets, such as a mouse or guinea pig, or about $500 for the cremation of larger pets, with their ashes stored in a commemorative urn.

The bottom line is that pets and pet care are a $33 billion industry in Australia, and it's attracting plenty of corporate attention.

Bunnings unleashed a line of pet supplies in 2023, as the hardware giant cashes in on what is proving to be a near recession-proof market.

Are pets part of the family?

Our willingness to fork out for pets reflects a growing trend of 'pet humanisation'. It's all about a shift from pet ownership to pet 'parenthood'.

A variety of theories have aimed to explain this phenomenon, with some suggesting that pets fill the gap created by increasing levels of loneliness and declining birth rates.

A study by Animal Medicines Australia confirmed that companionship tends to be the number one reason for getting a dog (52%).

But once pets come into our lives, they have a way of ingratiating themselves. According to ING, one in three owners says they love their dog or cat more than family members, while a further third considers their pet to be their child.

It's unclear what our animals make of all this, though to be fair, pets give plenty back.

According to Healthdirect, pet ownership provides genuine health benefits, helping to lower stress, and improve symptoms of depression and anxiety.

Dog ownership has been shown to decrease cardiovascular risk.

Cats do their bit for our health too. US research found cat owners are less likely to die from heart attacks and strokes compared to people who don't have a cat.

How much does vet care cost?

The health benefits of ownership, while compelling, can rapidly fly out the window when a pet becomes sick or injured. At that point, owners can face mammoth stress and significant bills.

This is not a gripe against vets. The reality is that unlike human medical bills, which are heavily subsidised by Medicare, the full burden of veterinary costs falls on owners.

And according to PetSure, vet bills are rising. It's a function of several factors including the ageing of our pets, the increased cost and uptake of diagnostic testing, and technological advancements that improve the quality and sophistication of pet patient care, but which come with higher costs.

Member-based programs are available that can take the sting out of regular vet bills.

Greencross Vets offers Healthy Pets Plus costing $45 per month for dogs and cats. It includes vaccinations, microchipping, and consultations at Greencross Vets clinics plus a range of discounts.

The critical issue is what happens if your pet falls seriously ill? A generation ago, owners often had few choices beyond euthanasia. That is no longer the case - if you have the capacity to pay.

Treating serious pet ailments is not a cheap business. Claims data from PetSure shows treatments for mast cell tumours topped cancer claims for dogs in 2023, with an average cost of $2859 though the highest claim was for $39,769.

Among cats, lymphoma was the most common cancer-related claim, with an average cost of $3636, and a maximum of $41,701. It is worth stressing that pet owners have the option to euthanise an extremely sick animal.

An option that can cost around $100. Of course, it is distressing, but it ends the pain and suffering as well as the financial strain.

Nonetheless, a Finder survey found Australian pet owners are prepared to wear high treatment costs. On average, we are willing to spend $6219 to save a furry friend from euthanasia.

It's one thing, however, to say we would pay this amount. It's another to find the money if a veterinary emergency arises. That's where pet insurance can give owners options.

What is the price of pet insurance?

Once a niche product, there are now more than 70 different pet insurance policies with brands as varied as Medibank Pet Insurance through to Everyday Pet Insurance from Woolworths. Scratch the surface though, and a far smaller number of underlying insurance companies are behind pet cover.

As a guide, Hollard Insurance is the company behind RSPCA Pet Insurance, Bow Wow Meow pet cover, and Petbarn Pet Insurance to name a few.

Even so, it's important to shop around for cover. Compare the Market (CTM) says premiums can cost between $25 and $80 per month, with the cost shaped by a pet's age, breed, health, and the type of cover.

Adrian Taylor, CTM's executive general manager of general insurance, says that it's possible to lower premiums by opting for a higher excess, and by insuring your pet from a young age before they start to experience health issues.

He adds that pet insurance "generally covers 70% to 90% of eligible vet bills up to an annual limit". So even with protection in place, owners can expect to wear out-of-pocket costs.

Are there alternatives to pet cover?

Instead of paying regular insurance premiums, owners could turn to a payment plan when, and if, pets need serious veterinary care. Plans are offered by the likes of VetPay and MediPay. In most cases, they work like an unsecured personal loan.

Pet owners can have the fees of a participating vet clinic added to their account, with the cost paid off gradually.

While payment plans can be convenient, high rates of interest can see the initial cost of care escalate. VetPay charges 18.4% on outstanding balances. With MediPay you could pay as much as 23.79%. These rates are up there with some of the more expensive credit cards.

As an alternative, a variety of non-bank lenders offer unsecured loans for vet bills at rates that are more affordable. Revolut has loan rates starting from 6.99%, other options include OurMoneyMarket (from 6.57%) and Harmoney (from 5.76%).

What are the unexpected costs of having a pet?

For all the unconditional love animals give, pets can have unexpected impacts on our finances.

The money we are lavishing on our dogs and cats hasn't escaped the attention of banks.

Julian Finch, founder and chief executive of Finch Financial, says: "What most people don't realise is that some financial institutions take into account pet expenses when calculating your ability to afford a home loan, whether it be for a new loan or refinancing.

"The high cost of owning a pet can have a significant impact on household finances and your ability to meet loan repayments." Finch notes that some pet breeds are known to be more expensive to maintain than others, adding, "Cavoodles fit into this category".

Lenders don't just look at obvious expenses like pet food. Finch explains: "Whether we like to admit it or not, pets can cause wear and tear on a home, leading to increased maintenance and repair costs.

"Pets may scratch floors, damage carpets, chew on furniture or create messes that require cleaning or replacement. This all adds to the cost of pet ownership, and financial institutions are well aware of this."

To ease the financial impact of pet ownership, Finch advises budgeting carefully. Plan for anticipated expenses and consider the long-term costs associated with pet care.

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