Plan Ahead To Pay For Your Pet’s Healthcare


Preventing costly accidents and illnesses is without a doubt the best way to save money on your pet’s healthcare. The absolute best resources I’ve ever seen to make pet owners aware of what can be prevented (most are things you can do at home for little or no costs), are the “101 Essential Tips” books by Dr. Jason Nicholas. Include the coupon code GUIDE101 to get 15% off when you purchase the books. You can also listen to this interview I did with Dr. Nicholas about the newly updated books and why every pet parent should have this resource in their home.

Most people can pay for wellness care and acute minor accidents/illnesses out of their regular budget/discretionary funds. However, unexpected/expensive events that require hospitalization/surgery and chronic conditions are the two categories of pet healthcare expenses that usually require funds not in a household’s monthly cash flow. Therefore, you need to plan ahead for these.

A balanced plan that will allow you to pay for almost any pet healthcare expense includes budgeted savings, pet insurance, and a line of credit.

  1. Have a dedicated savings/debit account or category in your budget just for pet healthcare expenses. This is not for dog food, treats, toys, etc. Deposit money into it every pay period without fail. You can use this to pay vet bills, pet insurance premiums, deductible copay, etc.
  2. Pet insurance policy – this is to help bridge the gap between what your pet needs and what you can afford until you get your savings/debit balance funded.
  3. Credit line – ideally, the goal is not to carry a balance, but to pay off monthly from your savings/debit category or using a pet insurance reimbursement.

My wife and I use a digital, category-based budgeting system “You Need A Budget” (YNAB). This is equivalent to an envelope budgeting system. With every paycheck, our income is distributed into all the different categories that we spend from every month. All spending transactions are by category and the system keeps track of a running balance in each category. If we use a credit card to pay a bill, the money is subtracted from the category balance and added to the credit card category so that the money is always there to pay off the credit card bill every month.

Watch this video as Hannah explains 3 budgeting methods you can use with YNAB. Using her own budget as an example, she includes helpful tips on budgeting for pet expenses. 

Another interesting option to help you save/budget for pet healthcare is Ally.

The ideal situation is to be self-insured – you’re able to pay any size veterinary bill out-of-pocket. When I use the term “out-of-pocket,” I’m referring to ready cash, not cash plus credit (debt that has to be paid back).

Statistics say that claims filed for 98% of insured pets will be less than $10,000 in a policy year. The other 2% are outliers – some paid claims have been for $50,000 or more. Using $10,000 as the goal for a fully-funded pet healthcare account/category, look at the figure below:


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