Pet Companionship, Personal Finance & You

Overview

This month, as we approach the stresses of 'Tax Time' let us take a momentary side-step to explore why it might be important to reflect on the relationship between pet companionship, personal finance and you.

Context: Three in five Australian households own a pet, which comprises of two main contenders: 39% canis lupus familiaris human ownership; and 29% felis catus human ownership/servitude. Due to the overwhelming support for dogs by Australian households (and my own personal subjective bias* - sorry), I will be focusing a little more closely on the 39%.

*Maggie, my four year old beaglier. 

Financial Implications

So, let us first look at the 'financial' implications of pet ownership. According to the latest Bankwest Social Indicator Survey, the 'Family Pooch Index', the average Australian family spends roughly $2,436 per year for the care of their canine, which can equate to nearly $25,000 if they live out their average life-span of ten years; some of the big costs are pet food and other gourmet doggy treats ($1,213), veterinary costs ($350), dental care ($107), dog training/grooming/dietitian ($401) etc.

(Bankwest, Family Pooch Index)

To put this in an investing context, if you were one of the two non-pet owners and decided to invest $2,452 per annum for ten years it could equate to potentially one of the following:

1. Roughly $31,730 if invested via a high interest savings account earning roughly 3.2% per annum.
2. Roughly $34,741 if invested via a conservative managed fund earning roughly 5.5% per annum.

Nonetheless, these pet bills and simple investment calculations are only one side of the coin when it comes to pet ownership and consequently should not be a deterrent until considering all the information.

Please note: real deterrents may be budget restrictions, allergies, personal preferences and lifestyle/home situations. 

Beneficial Implications

Here is an animal that asks for shelter, food, water, TLC and life-long friendship. Quid quo pro? The answer does not always have to be something in this context (and in other contexts for that matter - bonum commune communitatis instead of bonum commune hominis), but in this instance apparently it is a lot according to numerous research studies.

1.  Social Interaction Effects: increased empathy towards others (Hergovichetal, 2002); reduction in aggression (Kotrschal

   & Ortbauer, 2003); and, reduction of depression and promotion of a positive mood (Souter & Miller, 2007).

2. Anti-Stress Effects: reduction in levels of cortisol, epi-
   nephrine and norepinephrine, suggesting an attenuation of stress
   responses (Beetzetal, 2011; Cole et al. 2007); and, reduction in heart
   rate and blood pressure when presented with a stressor (Allenetal, 2001).
3. Anxiety Effects: reduction of fear and anxiety and promotion of calmness (Cole et al, 2007; Perkins et al, 2008; Shiloh et al, 2003).
4. Learning Effects: 'there is no direct evidence that animals can promote
   learning in humans,but the presence of a dog in an educational
   setting seems to support concentration, attention, motivation, and
   relaxation reflecting reduction of high stress levels which inhibit
   effective learning and performance. Also,the presence of a dog
   creates a pleasant social atmosphere, which is known to be an
   essential component for optimal executive functioning, which represents a precondition for learning' (Diamond & Lee, 2011).
5. Human Health Effects: pet-owning couples show better mental and
   physical health than those who do not own a pet (Headey & Grabka, 2007; Na & Richang, 2003).

In Conclusion

A quote sticks in my mind, "Wealth is the ability to fully experience life." (Henry David Thoreau). I believe that everyone should strive to (and be given the chance to) improve their financial literacy skills and then subsequently apply this to their own financial situation; however, there also needs to be a balance. Sometimes we get so focused on accumulating $€￡?￥ (and paying down debt) that we forget that wealth comes in many shapes and sizes. Yes, keeping track of your personal finances, planning ahead with medium to long-term financial goals and exercising financial control are very important, but not every purchase that stops you getting ahead faster is a bad financial choice; that purchase may very well have real intrinsic/extrinsic benefits now and into the future that you, your partner, and your family would have otherwise missed out on i.e. companionship, experiences/memories, health improvements (mental and physical) and a great way in which to teach your kids life lessons around responsibility and kindness to animals/others.

If this interests you then I suggest completing Pedrigree's 'Find Your Perfect Breed' Quiz (follow this hyperlink https://www.pedigree.com/all-things-dog/select-a-dog/breedmatch.aspx) to find out which is your best friend according to your current living space, people at home, energy level, and pet care considerations (was Maggie one of your list of potential matches?).

I leave you now with the story of 'Simon the Cat', just to show that I am not too bias towards pet ownership preferences.

"Aboard a British Royal Navy ship sailing down China's Yangtze River, Simon the Cat — a long-time favorite of the sailors on the H.M.S. Amethyst — was hit by shrapnel as a result of an attack by Chinese Communist forces. Simon was injured in the leg and back, and his whiskers were singed off. Some of the sailors didn't think he'd make it through the night. But eventually, Simon recuperated enough to wipe out a massive rodent infestation on board the ship...Later, his exploits became known around the world; he even managed to garner a TIME obit. In August 1949, Simon was awarded the Dickin Medal, which honors animals in wartime." (Time Magazine)

References 

1. ASIC MoneySmart 'Getting A Pet'. Retrieved from https://www.moneysmart.gov.au/life-events-and-you/life-events/getting-a-pet#costofowningapet 
2. Bankwest ' Family Pooch Index'. Retrieved from https://www.bankwest.com.au/media-centre/financial-indicator-series/bankwest-family-pooch-index-1269940000397 
3. Beetz, A., Uvn?s-Moberg, K., Julius, H., & Kotrschal, K. (2012) Psychosocial and psychophysiological effects of human-animal interactions: the possible role of oxytocin. Frontiers in Psychology, v3 (a234), pp. 1-15.
4. Yahoo Finance, MoneyHound 'Savings Accounts'. Retrieved from https://au.pfinance.yahoo.com/compare/savings/search/?amount=2500&account-type=savings&term=3&state=&type=Savings&type=Online&type=Standard&type=Online  
5. Time, 'Simon The Cat'. Retrieved from https://content.time.com/time/specials/packages/article/0,28804,2059858_2059863_2059855,00.html 

This publication provides an overview or summary only and it shouldn't been considered a comprehensive statement on any matter or relied upon as such. This publication doesn't take into account your personal objectives, financial situation or needs. It’s important for you to consider these matters before making any financial decision and I recommend you seek help from a financial adviser. You should seek advice from a qualified taxation adviser when making any decisions about taxation matters.