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Financial Independence and Dog Ownership

Last Updated: Apr 26, 2024

The concept of financial independence and retiring early (FIRE) is becoming increasingly popular, and Americans today are saving more than we previously thought. But what exactly is “FIRE,” how can you achieve it and how does it apply to dog owners? Today we’re looking at how dog owners must adjust their FIRE journey and some useful tips for pet owners in general, so get your notepads ready.

What is FIRE?

In the traditional way of thinking, retirement begins somewhere between your 50’s and 60’s. People who strive for Financial Independence and Retiring Early (or FIRE), however, work towards retiring in their 40’s, 30’s, and on more rare occasions, their 20’s.

The cornerstone of the FIRE movement is early retirement, but there are others who follow a FIRE plan who want simply to make life decisions without having to consider the financial aspects. This means financial independence, but not every financially independent FIRE follower wants to quit their job which adds a different spin to FIRE altogether. In fact, increasingly the FIRE movement is focusing on this type of freedom rather than the need for retirement.

What is “financial independence” by itself? Financial independence differs for everyone and is primarily a subjective definition; it’s based on your annual expenses and your net worth. The basic (and some may say, official) definition of financial independence is when you no longer need to work. In real world, it's usually when your passive income – from investments, real estate, etc. – covers your expenses.

By FIRE “rules,” it is when your net worth, most commonly invested in the stock market for an average of 5% annual return, is 25 times your annual expenses. For example, if your annual expenses are $40,000/year, then you may consider yourself financially independent when you have $1,000,000 invested in the stock market. Using a Safe Withdrawal Rate (SWR) formula, you can then withdraw 4% of invested amount every year while allowing your principal to continue growing (assuming a 5% annual return).

These annual expenses number must account for your total spend per year, including taxes and of course, your expenses related to dog ownership. With that in mind, I've seen a number of FIRE followers question their desire and decision for adopting a dog, worrying about the added expenses and if it's possible to continue on the FIRE journey while being accompanied by a pet.

ALSO READ: 80+ Ways to Save Money on Dog Expenses [Infographic]

Can Anyone FIRE?

In theory, anyone can become financially independent and retire earlier than in their 60s, but obviously this is easier for higher income earners. In reality, your success depends more on your spending and savings rate rather than your income. The FIRE plan requires a lot of dedication and self-discipline, because in order to increase your net worth to 25 times your annual expenses, you need to budget well and plan out your expenses. You do not have to switch your diet to bean and rice only, but knowing where your funds go, and finding ways how to decrease spending and increase savings will be key to achieving FIRE.

As a dog owner, on top of the added expenses, FIRE may also be more challenging because it will require extra attention and dedication to your job, which often means less time with your dog. But that doesn't need to be the case. Plenty of dog owners do find financial independence by working at companies that permit dogs in the office, by telecommuting, or by running their own businesses among other options.

You’ll notice that above I said that you can work almost any job and become financially independent. Still, it’s important to note that FIRE realistically won't possible in some positions. For example, if you can barely pay your bills at the moment and live paycheck to paycheck because you have a minimum wage job or your hours at work have been cut back, FIRE isn’t going to be possible for you right now. You either need to increase your income or decrease your spending before you can even begin to aspire to FIRE.

How does FIRE work? It involves you cutting back your expenses, having a strict budget and spending less than you earn. Most importantly, it requires to stop falling for the oh so popular American consumerism lifestyle and focus only on things that matter rather than luxurious toys that have little to no impact on your life. This allows you to save the difference between earnings and spending, and invest that in real estate or mutual funds.

The How of FIRE

While there's a number of great resources and websites on financial independence and retirement, one of the best places for new people to familiarize themselves with FIRE is actually on reddit. For a number of accurate information and helpful resources (and the community), go to /r/financialindependence.

Your understanding of, and journey towards FIRE, can be as simple or as complicated as you'll make it out to be. There are many “FIRE gurus” out there – some achieved their goal and now teaching, while others trying to teach without enough experience. According to Jonathan Mendonsa, co-host of the ChooseFI podcast, there are ten main pillars of financial independence. If followed correctly, these ten pillars will help you to achieve early retirement and financial independence.

You must lower your housing costs.
Instead of buying new cars, drive used ones.
Eliminate your cable bill entirely.
Max out your tax-deferred vehicles such as your 401K to reduce your tax liability.
Choose a cheaper cell phone provider and a cheaper plan.
Rely on smart financial practices and credit card rewards when funding travel.
Reduce your grocery bills any way you can, consider shopping generic brands, using coupons, and taking advantage of deals.
Consider adding another stream of income or increase your current income by working more hours, asking for a raise, or by seeking a new job that pays more.
Invest in low-cost index fund investments to multiply your money.
Work with a 4% rule, that is, you should be able to safely take out 4% from your nest egg every year and still have enough money later.

Dog Ownership and FIRE

With all of the basics on financial independence and retirement out of the way, let's talk about our pets. So how does dog ownership fit into the FIRE model and why do you even need to consider it?

Most dog owners would much rather spend their time with their dog than they would working. Dog owners also tend to be more creative and outdoorsy people who relish their freedom. These are all things that are afforded by FIRE. Simply put, FIRE was made for “dog people”.

Getting started on FIRE as a dog owner is much the same as getting started on FIRE as a non-dog owner. It involves saving, working hard, spending less, and being determined.

READ THIS: Dog Costs and Budgeting Guide for Pet Owners

Consider Your Increased Annual Expenses for BOTH of You

Most importantly, as you contemplate starting on FIRE, if you plan to be a dog owner for the rest of your life, you need to factor in the cost of pet ownership when determining your annual expenses. These annual costs will vary, but generously estimate them to provide yourself with a financial cushion if needed.

Make a List of How You Can Cut Expenses

As you look at the ten pillars noted above, write out your own list and under each point, note anything that you can do to contribute to that point. As you do this, keep in mind your dog-related expenses and needs as well. What pet-related expenses can be cut and should be considered? Which expenses cannot be cut or compromised?

Look at Your Dog Food Expenses

Can you switch to a more affordable dog food? Some expensive dog foods aren't even worth it.
Can you shop sales and coupons for dog food and treats and stock up to save money in the long run?
Have you considered home cooking your dog’s food to save money?
Cut back or eliminate treats and use healthy human foods instead like baby carrots.
Compare the cost-to-value ration of each dog food brand (total cost, weight and nutrition). Some dog food brands are better for money than others because they spend less on marketing, and more on nutrients, resulting in a healthier option or more food for the exact same price as a popular brand.
If you do insist on buying dog treats instead of substituting dog-friendly human foods, break treats in half to make them last twice as long.

Analyze Miscellaneous Dog Expenses

Try making your own dog toys at home with items you already have or fixing old toys instead of buying new ones. Or buy new toys from the clearance bin – your dog won’t know that they’re getting a Halloween toy for Christmas!
Eliminate the dog walker and instead, drive home for lunch and walk your dog yourself.
If you can’t eliminate the dog walker or doggy daycare, ask about loyalty programs that offer “freebies” or “discounts” for regular customers. It might be a smaller savings, but it’s a savings you wouldn’t have otherwise received.
When you head out of town ask family or friends to watch your dog or take them with you instead of investing in kennel services or pet sitters.
When buying any other necessities, do research online first. There's a number of comparisons you can find to consider the price-for-value of each item. For example, if you're shopping for a doggy GPS tracker, take a look at a dog GPS comparison list where all services and their costs were compared.

Make Adjustments at Work

Explore telecommuting with your boss to save on expenses and spend a little more time at home with your dog. While dog cameras can be expensive, that can also be considered a worthwhile investment that allows you to see and spend time with your pet while staying at work.

Look at Your Dog’s Veterinary Expenses

If you have pet insurance, determine if the cost is worth the investment or whether it’s a better choice to set up a savings account as a medical fund instead. This way you save on monthly expenditure but still have a “just in case” fund. If it goes unused, you can add this fund to your nest egg.
If you are comfortable doing so, shop around for a more affordable vet. Try using local clinics for vaccinations, they usually only charge a few dollars instead of $80+. The same goes for spaying and neutering.
Make sure your dog is spayed/neutered. Nothing will drain your savings quite as quickly as a new litter of dogs, plus, the world doesn’t need more puppies when so many are already without homes.
Instead of buying everything a vet prescribes, see if you can find cheap pet meds online. There's a number of alternatives to prescription drugs that are two to four times cheap, but note that there's also a lot of scam out there.
If your dog takes medications research available generics or look into pricing at human pharmacies if there is a human generic of the same medication. This can cut your expenses tremendously especially if you use a savings program like GoodRX.
Look into titering for your older dogs. Titering is the process of testing your dog’s blood for antibodies before administering vaccinations. If your dog has enough immunity built up in their system, they can forego certain vaccinations for that year and you will save money. (The only drawback to this, however, is if your dog’s titer comes back low and they need vaccinations, you wind up paying for the blood test and the vaccinations!)

Stock Up and Save

At certain times of the year, there are incredible savings and deals on products that your dog needs. If you can manage it, save up for these events and then buy the products that you need all at once. Not only will you get sales prices, but often you will be given bulk purchasing discounts and save even more.A quick look around the internet for past sales will let you know what time of year is best to get which items, but here are a few of our suggestions:

Shop for dog beds on Black Friday, Christmas in July, or year-round in clearance sales.
Stock up on dog food when sales can save you 25% or more, when there are significant coupons available, or when rewards are available. One of our favorite options is when pet stores offer gift cards in return for making a dog food subscription purchase. This gift card is usually around $30 and can be used towards your next dog food purchase. You can repeat this promotion by making a new subscription and canceling your old the next time you need more food.
Check clearance bins year-round for toys that are out of season or just not very popular. You will often find these prices in the $1 – $2 range and end up saving you a bundle without having to eliminate new toy purchases.

Compensate for “Luxuries” Elsewhere

No, you don’t have to live like a pauper and feed your dog generic grocery store brand food, but keep in mind that for each “indulgence” you should seek out ways of compensating for that expense to keep your costs low. For example, you may not be willing to compromise on your dog’s food, but you could find that “extra money” in your budget by cutting out that extra toy you buy each month or by only buying that food when it’s on sale and stocking up.

Is FIRE Right for You?

FIRE isn’t right for everyone as we mentioned above. If you are considering following the FIRE system but still aren’t sure if it’s right for you, consider talking to a financial officer or accountant. Take time to think about your decision and realize that as appealing as the end result is, there will be sacrifices along the way.

If you think you’re ready to take on the FIRE system we encourage you to do as much research as possible to make it work for you. Oh, and enjoy those plentiful retirement years with your dogs at your feet!