In field studies, Savannah Monitor feces almost always contains dirt, heck my "kids" have been eating dirt since I got them, every time I toss night crawlers in the cage they look like they have been eating mud pies.
So dirt is not harmful if ingested, as long as there is no debris / pebbles in it.
They will begin digging burrows at a very young age, burrows are crucial to good health, without them the monitor will ultimately get sick and die, Trust me, I did that mistake once, and it hurt, my lizard was only five years old when his insides shut down.
Have a look at my web site, all of the information contained in that site was gathered by interviewing the worlds leading Varanid biologists and breeders, as well as some of the finest keepers around.
When you read the opening page, each purple word is a link that will open a lightbox photo example to assist you.
http://www.savannahmonitor.co/
I started my babies right out in an 8 foot wide, 4 feet deep enclosure, and they use every inch of it.
By nature these animals will roam huge areas, so the bigger the cage the better, as long as you can maintain the proper environment inside it.
Now to answer your dirt question, you will want to mix some sand and top soil together to create "sandy soil" it's easy for them to dig in, it holds a burrow well and retains moisture.
Spread some leaf litter on top (rake your lawn) to help keep the dirt moist.
Don't worry about bugs and germs, they will only help you, we call this "Bio Active" substrate, when the lizard takes a poop in the enclosure, it will break down quickly this way.
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RE: Substrate... - dekaybrown, Tue Jul 31 17:34:26 2012
