I had to take on credit-card debt for my dog’s first emergency, but my new high-yield savings account keeps me from ever having to do it again
- Our dog had a medical emergency a few years ago that cost us $3,000. We used a 0% interest credit card to pay the bill, but I found it stressful to carry that debt.
- When I learned about Ally’s high-yield savings accounts and saw how compound interest could help my savings grow, I opened an account and started depositing an “insurance payment” every month to cover future vet bills.
- When our dog needed surgery this past spring, we had enough money saved in her “Vet Bills” account to cover the $2,000 total.
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A few years ago, our older dog had her first major health scare — she was diagnosed with a heart condition and spent a night in the emergency veterinary hospital hooked up to oxygen and pumped full of different medications.
Up until that point, she had been a very cheap dog to own, with annual health check-ups and the occasional dental cleaning as our only big expenses for the first seven years of her life. I’d heard others talk about health insurance for their pets, but seven years in, the numbers hadn’t come close to making sense.
But then she got very sick, and that overnight cost us $3,000.
A 0% interest credit card helped us pay for care, but it wasn’t a great choice for our family
While we were doing reasonably well financially, an unexpected $3,000 expense, on top of an already expensive summer of home repairs, was something we couldn’t handle without either draining our emergency fund or paying 19% interest on our credit card.
Neither of those options seemed like a good answer to me, as having cash in the bank keeps some of my money anxiety at bay, and paying interest on debt is something I never want to do.
After stressing about it for a while, I finally researched 0% interest credit cards. I was able to open one to pay for our dog’s care, and we slowly paid off the balance over the next 15 months. Making that choice felt really bad, but our dog is a member of our family and our only other option was to put her down, which wasn’t a choice at all.
During that time, the money we owed hung over my head as a constant stressor, and I worried that another emergency would mean we wouldn’t be able to pay it off in time.
Over and over again, I told myself that never again would I find myself in a place where we had to go that route. I would pay closer attention to our finances every month, and prepare in advance for the unexpected.
Why I decided to open a high-yield savings account
Moving forward, it was clearly too late to purchase pet health insurance for her, as she now had a pre-existing condition and was precluded from any kind of standard care plans.
While we muddied through her follow-up care that took years, including numerous visits to cardiologists and other specialists, as well as a medley of daily medications, I regularly worried about what we would do if another big medical emergency came our way.
It was around that time that I finally opened my first high-yield savings account at Ally. Before then, any savings we had outside of retirement accounts sat in our local bank, earning more or less no interest.
After I opened our savings account at Ally, with about a 2% interest rate, we earned more in interest that month — on a small amount of money — than we ever had in our larger savings accounts. After that, I was hooked.
A $500 balance brought us about $1 in interest every month. While that isn’t a huge amount in the grand scheme of things, the psychology of it was very powerful.
Watching my balance grow encouraged me to save more
Instead of just saving money and having it sit, I could see it slowly growing in a tangible way. Ally shows the total amount of interest made to date for all accounts, and seeing that number grow encouraged me to save even more.
Not only did putting our money in a high-yield savings account make us significantly more interest, I was incentivized to add to it in a way I hadn’t previously because I could see what additional money would do to that monthly interest payment. I could see our bank accounts slowly growing of their own volition for the first time.
After a few months of putting money into a general emergency fund account, I realized I could easily add a second bank account online in less than five minutes to save specifically for our dog’s expenses or other goals.
Unlike the standard brick-and-mortar bank, where adding an account is a big process, online-only high-yield savings accounts make it really easy. By breaking out our savings, I could put money aside for specific purposes without feeling like I was depleting our emergency funds when I used any of that money.
While we attempt to pay cash for as many expenses as we can these days, there are still some months that have significantly higher expenses than others.
After tracking our spending much more closely for the past two years — ever since that first health emergency for our dog — we are able to weather the fluctuations in monthly expenses much better than we used to. We are now saving 40 to 50% of our income most months, thanks to tracking every penny that we spend. But even so, there are still some large expenses that come our way that require more planning.
Our dog’s second big health scare
This past spring, we noticed that our dog seemed to be having issues with two of her nails. Initially, we (and our regular vet) brushed it off as a normal occurrence and thought they were simply broken and would grow back normally after being cut short.
After a few more nail trimmings, though, it became clear that wasn’t the case, and we were off to a dermatologist — another specialist. He ultimately told us that the two toes attached to those nails would have to be amputated, as the issue was autoimmune and wouldn’t go away on its own.
After the first health scare, I had opened up a separate savings account for veterinary bills and deposited funds into that account each month in lieu of the pet health insurance we didn’t have.
When we found out about her toes, we started putting more money into our “Vet Bills” account at Ally, and within six months I was able to book the non-emergency surgery without worrying about what it would do to our finances. Just knowing we were financially prepared made the process of getting her care so much easier.
The total cost of the procedure topped $2,000, including after-care and antibiotics, and we were able to pay the bill in full.
The bottom line
Our dog had her surgery this past summer and, after a long recovery, she is back to her normal, happy self, just missing two toes. And, unlike our experience a couple of years ago, we are continuing to put money away into our emergency savings and have no new credit cards.
Looking to the future, even when we have a younger dog again that can get reasonable pet health insurance, I don’t expect to go that route.
Instead of sending money to a company that would pay some percentage of some care, I will keep our separate “Vet Bills” savings account at Ally and make an “insurance payment” to ourselves each month to save for future expenses. That way, no matter what life throws at us, we will have the funds to cover that cost. And we’ll get a little bit of interest paid to it along the way.