May 19, 2011

Can You Afford a Horse?

My wife loves horses.   One day it is her wish to own a horse (or two).  However we live in the suburbs and don't have space to keep a horse plus horses can also be pretty expensive.   Its still a long term goal for her to get a horse.    The upfront cost of buying a horse is only a small part of the total costs.    To know if we could really afford a horse at some point we'd need to know what the total long term costs would be.

What does a horse cost?

The cost of buying a horse is just the start.   The bulk of the costs for a horse are in the ongoing expenses.  
There are a lot of ongoing costs related to the keeping of a horse.   You will have to pay for :boarding / stabling, food, gear, routine vet bills, etc.     I found a few references to what horses cost.   
The cost of horse ownership at Alpha Horse
Horse Cost Calculator at WOW Horse
Learn the True Cost of a Horse at

Altogether I think if you're stabling a horse then you can expect to spend something around $400-$600 per month.  

Of course that is just a broad estimate number and the exact amount you spend will depend greatly on the situation.  If you have your own acreage and stables then the cost will be a lot less.   I'm sure that some people spend a lot more on their horses.

Horse Insurance

You can insure horses for both mortality and major medical insurance.   I think that getting major medical for a horse would be a good idea.  I only did a little research on horse insurance, but it appears that major medical policies are issued as as an addition to a mortality policy.   A couple more references to health insurance:
Horse Insurance, You Bet! at Five Star Ranch

Choosing to Insure Your Horse at Horse and Horse Information

Total Costs last Decades

If you're planning on buying a horse then you have to plan affording the monthly expenses.  Horses can live 25-30 years so you need to cover the costs for a LONG time.    If you assume $500 per month cost then that is $6,000 per year.  If the horse lives 30 years then the total cost is $180,000 not accounting for inflation.   Maybe you've got $6,000 extra to spend this year but will you have that money to spend in 5 or 25 years?

One way to figure the total costs over a long period would be to calculate the Net Present Value.   You can figure the NPV using the NPV formula in a spreadsheet.   The NPV will give us an idea of the present cost of a series of cash flows over time.  I assumed 5% interest and 3% inflation rate and came out with a Net Present Value of about $131,500.   So if you started with a sum of $131,500 and made 5% on your money then this would give you enough to pay $500 monthly costs adjusted for inflation over a 30 year period.   Therefore using this calculation we could say the long term cost of a horse in today's dollars is about $131,500.

Again though I must point out that every situation is different.  I'm assuming a $500 monthly cost and everyones individual costs will differ.  We also don't know for sure how long the horse will live and I'm just using 30 years as a guess.

Photo by peter pearson

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