Why Pets Have Become a Permanent Household Expense
Household budgets have historically had a short list of fixed line items: rent or mortgage, utilities, groceries, transportation, and for those with kids, childcare. A new dependent has effectively joined that list for tens of millions of households. It doesn’t pay taxes. It doesn’t go to school. It doesn’t grow up. Roughly 95 million American households, about seven in ten, now own at least one pet, according to the American Pet Products Association’s most recent industry report. Pets have quietly become the fourth dependent in many households, after children, aging parents, and the mortgage.
That is the real shift. Not that people love their pets more than they used to, but that pets have moved from possessions into dependents, with everything a dependent implies for how a family plans, borrows, and spends.
From Ownership to Parenthood
The language shift came first, and it isn’t just marketing copy. Nearly all US pet owners, 97 percent, say their pet is part of their family, and about half go further, saying their pet is as much a part of the family as a human member, according to Pew Research Center. “Pet owner” has largely given way to “pet parent,” and the shift now shows up in legal paperwork, not just conversation. Among pet owners who have an estate plan, half formally account for their pet through a will or trust, according to a survey by FreeWill, and the generational split is stark: 69 percent of millennial and Gen Z pet owners with an estate plan do this, compared with 31 percent of boomers. Custody disputes over pets are now a routine feature of divorce proceedings, argued with a seriousness once reserved for property.
None of that data proves language causes spending on its own. But it does show the parenthood framing isn’t a metaphor people use loosely, and that younger owners in particular are formalizing it the same way they would for a child. When 97 percent of owners call an animal family, treating a vet bill the way you’d treat a child’s medical bill stops being a figure of speech and starts being how the household actually budgets. A possession gets replaced when it wears out. A dependent gets treated when it gets sick, and the household finds a way to pay for it.
The Demographic Engine
This didn’t happen on its own. It tracks closely with several long running demographic trends: fewer children per household, later marriage, a rise in single person households, and an aging population living longer after children move out. Pet ownership itself has climbed over the same stretch, from just over half of US households in the late 1980s to roughly seven in ten today, according to APPA’s own survey history, a rise that happened alongside a US birth rate that fell and largely stayed below replacement level. That parallel doesn’t establish which trend drove which, and it shouldn’t be read as one.
It’s tempting to say pets are simply replacing children. The honest answer is more careful than that, but it doesn’t need to be timid. Fertility rates were already declining before pet spending accelerated, so the two trends share causes more than they cause each other. Financial pressure, career prioritization, and a preference for flexibility push people toward delaying or forgoing children. A meaningful slice of that same population, single professionals, empty nesters, people in small urban apartments, chooses a pet instead. Not as a direct substitute, but as a lower cost way to meet the same need for companionship and routine. Pets didn’t cause the decline in births. A society with fewer children and more people living alone simply has more room, and more reason, to redirect spending toward an animal.
The New Household Budget
In 1985, a typical pet budget covered food, occasional veterinary visits, and a leash. Today’s equivalent list runs to insurance premiums, DNA testing, wearable health trackers, AI powered diagnostics, monthly subscription food, daycare, and pet hotels. Most of it renews automatically, whether or not the household uses the service that month, and the individual line items are no longer trivial: the average accident and illness insurance policy runs about $676 a year for a dog and $383 a year for a cat, according to industry data compiled by the Insurance Information Institute, on top of food, grooming, and routine veterinary costs that used to be the entire budget.
That automatic renewal is the real difference from a generation ago. A bag of food bought occasionally is discretionary. A wellness plan billed every month behaves like a phone contract. The scale backs this up. Total US pet industry spending reached $158 billion in 2025, up nearly 4 percent from the year before, according to APPA. The sector has grown for more than two decades running, including through the 2008 and 2020 downturns. Veterinary prices have climbed even faster than the category as a whole. Bureau of Labor Statistics data shows veterinary service costs have consistently outpaced overall inflation for most of the past three years, and have consistently outpaced childcare cost growth too, at times running close to double the rate in peak years. That is not a comfortable comparison for a family budget to make.
Premiumization, and the Question of Why
The interesting question isn’t what people are buying. It’s why they’re willing to pay more for it.
The buying itself is measurable. Roughly 42 percent of dog and cat owners say they deliberately choose to spend more for premium food over a standard alternative, and that preference shows up across nearly every category, not just food. The data offers a partial answer to why, and generational spending patterns are the clearest thread. A 2024 Harris Poll found that 82 percent of pet owners view their pet as their own child, and average annual pet spending was $4,366, but that average masks a wide generational gap. Gen Z owners, the generation delaying marriage and parenthood the longest, spent the most of any group, $6,103 a year, well ahead of millennials, Gen X, and boomers. No single survey can isolate exactly how much of that gap is guilt, identity, loneliness, or redirected caretaking instinct, and it would overstate the evidence to claim one force dominates. But the pattern is consistent with all of them pointing the same direction: the generation furthest from traditional family formation is also the one spending the most on an animal it calls a child. Companies selling pet products have taken the hint. Marketing has shifted away from the practical needs of the animal and toward the emotional needs of the person holding the leash. A birthday cake for a dog doesn’t improve the dog’s life in any measurable way. It satisfies something in the owner, and that owner is increasingly the one with the biggest budget for it.
Technology as Infrastructure, Not Novelty
The gadgets aren’t the story. The infrastructure is.
GPS collars, smart litter boxes, automatic feeders, telehealth consultations, DNA testing kits: listed on their own, they sound like a trend. But pet technology didn’t create pet spending. It made premium, individualized care scalable in a way it never was before, and insurers are already building on it rather than just watching it happen. The UK insurer Covéa has partnered directly with pet wearable maker Tractive to fold activity and health data into how it underwrites and prices policies, and industry survey data from GlobalData found nearly half of pet owners would consider using a wearable to monitor their pet’s health if it were offered alongside a policy.
A wearable collar turns what used to be a vet’s subjective judgment during an annual exam into a continuous stream of data. That data doesn’t stay with the owner. Insurers use it to price policies more precisely. Food companies use it to justify personalized nutrition sold at a premium. The plumbing is now in place to charge for precision instead of guesswork, and that is a genuinely new capability. It is a large part of why premium pricing has room to keep expanding rather than plateauing.
Second-Order Effects: Housing, Labor, and Capital
The consequences reach well past pet stores and vet clinics.
In housing, the premium is measurable, not anecdotal. A study in the Journal of Real Estate Finance and Economics found that US landlords with no pet restrictions collected an 11.6 percent rental premium over comparable properties that banned pets, even after accounting for differences in location, size, and amenities. Property managers have their own reason to prefer pet owners as tenants beyond the premium itself: industry data from the National Apartment Association shows pet owning renters stay roughly 21 percent longer on average than those without pets, which lowers turnover costs. Landlords who once banned animals outright increasingly build pet amenities into new developments for exactly these reasons. That is a measurable change in how real estate gets designed and priced, not a soft trend.
In labor markets, professional dog walking, pet sitting, and grooming barely existed as structured careers a generation ago. US dog walking services alone are estimated at over $1 billion in annual revenue, according to industry research firm IBISWorld, and that is a single narrow slice of a broader pet services labor market that also includes sitting, grooming, training, and boarding as separate, larger categories. Veterinary medicine has professionalized in parallel, building out specialties that mirror human healthcare: oncology, cardiology, orthopedic surgery, imaging that once required hospital equipment.
In capital markets, private equity has been buying up independent veterinary clinics for years, a well documented trend that regulators have taken seriously enough to intervene in directly. The Federal Trade Commission challenged a major veterinary rollup deal in 2022 on the grounds that consolidation was reducing local competition and pushing prices up, which is exactly the mechanism at work here. Recurring visits, insurance backed payment, and owners who rarely say no produce precisely the kind of predictable cash flow institutional investors look for. Fewer independently owned clinics means less local price competition, and that shift is a meaningful part of why veterinary prices have climbed faster than general inflation.
None of this is really about pets anymore. It’s about how quickly a household expense can graduate into a balance sheet item for somebody else, an insurer, a landlord, a private equity fund, each one now pricing a decision the family makes out of love.
The Debt Behind the Devotion
The strain underneath the spending is easy to miss if you only look at the aggregate numbers. A PetSmart Charities and Gallup survey of nearly 2,500 US pet owners found that 52 percent had skipped or declined recommended veterinary care in the past year, and among that group, 71 percent named cost as the reason. A separate 2026 industry survey of 2,000 US dog and cat owners, conducted by Censuswide for Lovet Pet Health Care, found that 37 percent had used credit or taken on debt specifically to cover veterinary costs in the previous twelve months.
When owners decide to proceed with treatment anyway, financing has become the pressure valve. CareCredit, a medical credit card accepted at tens of thousands of veterinary practices nationwide, lets owners pay for emergency surgery or chronic care over time. The same Lovet survey found that 91 percent of pet owners said they would be willing to go into debt to save their pet’s life, even though nearly half had already delayed or skipped care because of cost. Many of these financing products carry deferred interest structures, the kind that can silently accrue and hit all at once if a balance isn’t paid off within the promotional window.
This is the mechanism that connects emotional attachment to real financial harm. Owners don’t walk away from a sick pet because the bill is high. They borrow, often at rates well above a standard credit card, and the debt becomes part of the household’s financial picture long after the treatment is finished. It is also part of why pet surrender to shelters climbs during economic downturns. The attachment doesn’t disappear when the money runs out. The money just runs out first.
Why This Spending Survives Downturns
Despite all of this, pet spending has proven unusually resistant to recessions, in two separate downturns with two separate kinds of evidence. Bureau of Labor Statistics Consumer Expenditure Survey data shows that pet spending held steady at 0.9 to 1.1 percent of total household spending every single year from 2007 to 2011, essentially unmoved through the worst years of the financial crisis, even as overall household budgets contracted. In 2020, with the broader economy in free fall, US pet food sales still grew 9.7 percent and total pet industry spending rose 6.7 percent to $103.6 billion, according to APPA. Two recessions, a decade apart, with the same result.
The mechanism is consistent with that history. Owners tend to cut their own personal spending well before they cut spending on an animal they consider family. The subscription structure of modern pet care, insurance premiums, food deliveries, wellness plans, has built in inertia on top of that. People forget to cancel, or don’t want to disrupt a routine their pet depends on. Emotional attachment paired with recurring billing is exactly the profile that makes a consumer category attractive to investors during uncertain periods, which is part of why capital keeps flowing into pet businesses even when other discretionary categories are treated cautiously.
The Limits of the Trend
None of this is unlimited. The data on actual veterinary visits tells a more complicated story than the revenue numbers suggest. Visit volume has been declining industry wide for several years running, even as the price per visit keeps rising. Fewer visits, higher prices. That combination suggests real price sensitivity underneath the spending headlines, not unlimited willingness to pay.
There are demographic consequences too. Rising costs are becoming a reason some prospective owners delay or skip pet ownership altogether, which turns affordability into a factor shaping who gets to have a pet in the first place. The strain is visible at the other end as well: an estimated 5.8 million cats and dogs entered US shelters in 2024, according to Shelter Animals Count, and shelter leaders point to affordability, not declining attachment, as a leading driver. The ASPCA has reported that most owners who considered surrendering a pet were able to keep it once they received financial assistance. That statistic cuts both ways. It could mean the safety net usually works before a family reaches the breaking point, or it could mean a large number of households are only one unplanned expense away from losing a pet they would otherwise keep, and simply haven’t hit that expense yet. Either reading points to the same underlying fact: affordability, not affection, is the variable actually deciding these cases. The same consolidation that gives the industry predictable cash flow raises a fair question about whether rising prices reflect genuinely better care or simply less competition in local markets.
The pattern isn’t confined to wealthy countries either. It emerged first in North America and Western Europe, but the same humanization curve, rising incomes, smaller households, more pets treated as family, is now visible across urban China, India, and parts of Latin America. What looks like an American consumer story is closer to a global one still in its early innings elsewhere.
What This Means Beyond Pets
The pet industry itself is not the interesting part of this story. What’s interesting is the precedent it sets. A category of spending that starts out discretionary, gets relabeled as family, and then attracts insurers, lenders, landlords, and institutional investors is not unique to animals. No single historical comparison proves pets will follow the exact same trajectory, but the sequence rhymes with ones we have seen before: it’s roughly the same path that turned home internet from a luxury into a utility, and cell phones from a gadget into something creditors now factor into a household’s ability to pay. Pets are simply the most recent, and in some ways the most emotionally loaded, category to move through that sequence.
Thirty years ago, most families fed their pet from a bag and took it to the vet once a year. Today it has its own line of credit, its own actuarial tables, and its own real estate market. Watching what comes next in the pet economy is, in a real sense, watching a preview of how any beloved, non-negotiable expense gets absorbed into modern household finance. The animal just got there first.
