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Your girl is still a young cat with MANY years ahead of her. Since this growth is increasing in size, I would advise having it removed, unless your vet feels there are reasons not to anesthesize her and put her through surgery. If it is growing noticeably every month, by the time she is 5 or 6 the growth will be huge and will HAVE to be removed in order for her to have a decent quality of life. Having it taken off now while it is fairly small is much less traumatic than having to go through surgery for a huge tumor. I would also plan on keeping her indoors until the surgical site is completely healed so she doesn't compromise the wound in anyway by getting into something outdoors.
Please let me know if I can help further.
Animals can develope spontaneous cysts and growths just as humans can. Sometimes a lab can determine the cause of the growth once they have excised it and have a chance to examine the entire growth. If you had 100 cats with this same scenario, there could theoretically be 100 different reasons for the growth. The good news for your girl is that the growth is not malignant, so you can afford to wait a while to see how things develope with it.
You can choose not to accept my answer and relist if you would like. I do hope you find a solution that works well for you and your girl.
In order to get the specific answers you are looking for, you would need to know the exact cellular diagnosis of the growth you are seeing. The term "non-malignant" is only a very general category and within that category, there are numerous (hundreds) types of cysts and benign growths that will react differently, grow at different rates, etc.,
You said a biopsy was done - I'm guessing this was done as a fine needle aspirate ( the vet put a needle into the mass, drew out a few cells, and then examined them under the microcope). If t his is correct, then you need to realize that this is merely a screening test - sometimes we will get an exact diagnosis, but many times that is not the case. It is possible to fail to capture the most harmful cells present within the mass and come to an inaccurate diagnosis when this test is done. Also, the validity of this test will vary greatly with the vet's skill at reading the cytology. Sometimes, we will send in these slides to a pathologist to get a specialist's opinion before deciding how to proceed. Do you know if this was done? If so, the pathologist will have given a diagnosis (or at least a short list of possible diagnoses)/
If you can tell us what the exact diagnosis is, will will be better able to tell you what is the most likely scenario for your cat, but unfortunately the category of "non-malignant" is just too broad to give you any meaningful information. Even if I told you I have seen numerous skin lumps in cats (which I have), and owners have chosen a "watch it and see" approach (some prefer this rather than removal), what happend in their cats doesn't mean that is what is most likely to happen in your cat as their cat may have had a sebaceous cyst while your cat may have a benign skin tumor of some times so the comparison would not be valid.
Having said all that, I agree with Lori's recommendation of removing it. While dogs get lots of skin lumps that we will just monitor for changes in apperance, in cats, there is a greater likelihood that they are indeed something to worry about and we would rather take them off sooner rather than later. Unless your vet is confident that this is just a cyst of some type (this can usually be determined with the fine needle aspirate), then I would recommend removal with histopathology so you can find out exactly what you are dealing with. If the test does come back as being nothing to worry about, then you can stop worrying. If it turns out to be something more serious, you will be glad you had it done sooner rather than later.
I hope this answers your question - let me know if I can help you further.