On The Money: How to manage surging pet care costs + investing in AI

Reuters

On The Money: How to manage surging pet care costs + investing in AI

Sep 13, 2024 at 10:00 am GMT

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Americans spent $147 billion on pets in 2023, causing financial stress for 91% of pet owners

Trump proposes eliminating Social Security tax, a move with bipartisan support but funding challenges

Large tech companies invest heavily in AI, anticipating transformative technology

By Lauren Young

Sept 13 - This was originally published in the Reuters On the Money newsletter, where I share U.S. personal finance tips and insights every other week.

I often say to anyone who will listen that I love my dog the most. (Apologies, kids! Sorry, hubby!)

And I know plenty of people who feel the same way.

But, like children, pets are expensive. All told, Americans spent $147 billion on their pets in 2023, according to the “State of the Industry” report by the American Pet Products Association.

Despite the cost, we will do anythingfor Fluffy and Fido. I have friends shelling out tens of thousands on cancer treatments for sick pets. Ditto for dental care or pricey surgeries.

Thanks to the surging cost of pet care, 91% of pet owners report experiencing financial stress, according to a recent survey of dog owners by USA Today.

Here are three ways to stay sane and keep your pet finances healthy.

What is the most expensive healthcare decision you have made for a pet? Let me know about the experience and how you handled it financially!

Write to me at onthemoney@thomsonreuters.com. Be sure to include your name and where you live.

Should Social Security be taxed?

It is one of those unwelcome surprises that is almost guaranteed to anger people when they retire: income from Social Security benefits is subject to federal taxes – and in some cases, to state taxes as well.

So it is not a shock to see U.S. Republican presidential candidate Donald Trump dangling elimination of the tax as a possible enticement to voters this summer.

Reducing or ending the tax on benefits enjoys bipartisan support in Congress, and Democrats also have proposed variations on the idea. But unlike Trump, they have proposed ways to pay for the tax cuts, which would cost Social Security and Medicare $1.5 trillion in revenue over the coming decade.

The bottom line: if we are going to cut taxes for higher-income seniors, the change should be coupled with other Social Security reforms that provide help across the board, writes Mark Miller.

What do you think about taxing Social Security benefits? Send me your thoughts at onthemoney@thomsonreuters.com.

What I’m reading and watching

As beer loses share to hard seltzer, US barley farmers scramble
'Nothing can prepare you for 9 months': Guests reflect on Royal Caribbean world cruise(USA Today)
US equity funds draw large inflows on rate cut bets, easing growth concerns
Caring for aging parents can strain everyone’s finances. Plan now(Washington Post)
Zara to offer its secondhand clothes service in US by October
US household rent burden unchanged last year, varied by race
How to handle the delay in the release of the FAFSA form(New York Times)

Video of the week

Is AI the must-have play?Large tech companies are investing a trillion dollars in AI because they believe it will change the world, even if the anticipated game-changing technology hasn’t emerged yet. Watch here.

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Inflation on the brain

Yesterday I went to the grocery store, and the bill was $86 for organic milk, string cheese, dog bones, blueberries, yogurt (four for $5 on sale!), an avocado, liquid dishwashing detergent and a few other incidentals.

I literally looked at the cashier in disbelief.

Food. Gas. Travel. Housing. The inflation story is complicated.

U.S. consumer prices rose slightly in August, although underlying inflation showed some staying power amid higher costs for housing and other services.

With this most recent data, all eyes are on the U.S. Federal Reserve, which is expected to nudge interest rates lower next week.

Food prices edged up 0.1% in August after climbing 0.2% in each of the past two months. But overall grocery store food prices were unchanged as increases in the costs of meat, fish, eggs and dairy products were offset by decreases in the prices of nonalcoholic beverages, fruits and vegetables.

Prices at the pump are falling, too. Gasoline prices fell 0.6% last month (and are expected to drop below $3.) Electricity was 0.7% cheaper and natural gas cost 1.9% less in August. That’s good news as we head into the winter months when heating costs eat up more of the monthly budget.

Where is inflation hitting you hardest right now? Let me know where you are seeing the biggest price increases (and if you have any tips to save money) at onthemoney@thomsonreuters.com.

A$K Lauren

Do you need to take out a student loan? Are you planning to retire in the next year? Send your money questions to onthemoney@thomsonreuters.com, and I'll tap my extensive source network and braintrust for expert advice.

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Reporting by Lauren Young; editing by Diane Craft

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