“Mom, can I have a dog / cat [or other pet]?”
The question is almost inevitable from youngsters, who have a natural curiosity about other living things, and who see lots of other families with animals. A lot of the time, the answer is a resounding “no.” After all, there are plenty of reasons not to get a pet, such as members of the family not being home enough to care for it properly. The cost of keeping an animal is also a big deterrent for parents, but hold on a sec. Having an animal at home might have more of a financial benefit than you think.
Here are just some of the ways a pet can improve your child’s financial literacy:
Comparison shopping
All pets need food. Kids can compare not only the price of the food they buy for their animal, but also the ingredients. They’ll learn to economize but also that sometimes it’s worth paying a little extra for a product of quality.
Budgeting
Pets have a variety of expenses, such as food, vet bills, toys, food and water bowls, and even “babysitting” for when you are away. You and your child can formalize these in written budget. Once he gets a sense of how to allocate money set aside for pet care, you can have him make a budget for his own money. He’ll also get an idea that certain items end up taking up more funds, just like rent or mortgage payments usually take up more than say, your electricity bill.
Opportunity Cost
Sometimes, kids miss out on other things or find them more difficult to complete because they have an animal. For example, if they choose to have a pet, they might end up having to stay home to exercise it instead of going out with friends. They learn that buying or owning one thing sometimes means sacrifices in other areas.
Inflation
In general, the larger or older a pet gets, the more expensive it is to take care of. For instance, it usually requires more food as it grows. As the prices of all the items related to caring for the pet go up, you can talk about what inflation is and how best to deal with it.
Return on Investment
When kids have a pet, they invest a lot into it through care and play time. They get something back for this investment—satisfaction of caring for something else and being responsible, companionship, and entertainment, just for starters. You can make a comparison between this and finance, even discussing when it might be time to stop investing (find the animal a new home) if the return isn’t high enough.
The Final Wag
Now, no one is suggesting you run out and grab the nearest Fido for your kids tonight—getting a pet is a huge responsibility that neither you nor your children should take lightly. Even so, with proper preparation, bringing one into your home can be a big boost to your youngsters’ financial savvy, saving kids money in the long run from what they learn.