How to Beat the High Cost of Funerals
If you are trying to make sense of funeral costs then you’ve come to the right place.
With funeral costs consistently rising over the years, and funeral providers and cemeteries expecting payment in full at the time of the funeral, the prospect of paying for a funeral can be overwhelming.
Complicating matters are the many elements to consider: services, casket, vault, embalming, gravesite, and more.
It’s easy to understand why the terms funeral costs and final expenses are often confused. The terms are often used interchangeably, but they aren’t necessarily the same.Funeral costs include expenses related directly to the funeral or memorial service. This includes items such as the casket, the vault, the honorarium for the officiant, and the flowers. We include burial expenses in our funeral cost calculations. Burial expenses include the grave, grave marker, and the cost to open and close the grave.
Final Expenses include funeral costs but also include other expenses related to end-of-life. Other final expenses may be items such as probate fees, nursing care, medical bills, credit card charges, and legal and accounting fees.
WHAT YOU WILL LEARN
To help you sort through it all, here you’ll find:
- An explanation of funeral costs.
- What’s included in final expenses.
- What average funeral cost really means.
- Tips on managing funeral costs.
- Insight on the ways to pay for funeral costs.
AVERAGE FUNERAL COSTS
According to the 2014 Funeral Price Survey by the National Funeral Directors Association, the average cost for an adult funeral is $8,508. By any measure, that’s a big number. But what does it mean and does it tell the whole story?
Average funeral costs are based on the most commonly selected items for a traditional funeral such as a casket and vault. It does not include cemetery costs such as grave space, a grave marker, and opening and closing the grave. The cemetery costs can easily add another $2,000 or more to the total.
So when you hear the term “Average Funeral Costs” keep in mind $10,000 or more is probably closer to what you’ll find for a traditional funeral. Your particular choices can either cause the number to go down, or cause it to go way up. Here are some things to keep in mind:
- Prices for cremation can be significantly lower than that for burial.
- The exact cost of a funeral will depend on the quality of the casket, burial vault and other merchandise selected.
- A direct burial (no service) or cremation can be arranged for under $1,000. But we recommend that you consider holding a memorial service of some kind, even an informal one, to acknowledge the passing and pay tribute.
- The best way to manage funeral costs is to preplan. To learn more, see our information on funeral planning.
CALCULATING YOUR FUNERAL COSTS AND FINAL EXPENSES
We know it’s hard to plan when you don’t know how much to set aside. To help you understand how much your funeral might cost and estimate your final expenses, we’ve developed 2 tools to provide you with cost estimates. Below you’ll find our Final Expense Calculator. Give it a try. Also, you can get an instant funeral cost estimate with our free Quick Plan. The Quick Plan is the first step in our Wise Planning System.
|Final Expense Calculator|
|Credit Card Charges|
|Rent, Utilities, etc.|
|Cable TV and Phone Bills|
|Auto Lease and Repairs|
|Cost of Clearing Out Household|
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MANAGING FUNERAL COSTS
A funeral doesn’t have to be expensive to be meaningful. The best way to avoid spending more than you need to is by pre-planning. That way you’ll have time to weigh your options and decide what is right for you. Here are some tips on how to manage your funeral costs.
- Plan in advance! This gives you time to review your options without the burden of a time constraint. By pre-planning your funeral you’ll also have the luxury of avoiding the risk of making unnecessary emotional purchases. (Learn more about our Wise Planning System.)
- Set a budget. It always helps to know what how much money you can afford to spend. Remember, this is an event and you probably would not plan a big party or other celebration without having some idea of what you want to spend. Allocate more of your funeral dollars to the elements that have the most meaning to you.
- Shop around. Whether it’s doing research online or stopping into local funeral homes, you can learn a lot by shopping around. In fact, you’ll probably be surprised by the wide variety of choices that are available at very affordable prices. (Try our FREE Find a Funeral Provider tool.)
- Enlist help. It may help to bring a trusted friend or family member with you when you shop. They may be able to speak on your behalf if negotiations are involved since it may be difficult for you since the decisions are so personal.
- Consider pre-funding. If you pay in advance you can lock in today’s prices with a guaranteed funeral contract. Like any big financial purchase, you need to do your homework to make sure that the plan you select is right for you. Be sure to read the fine print.
PAYING FOR YOUR FUNERAL
There are a number ways to fund a funeral with new options such as crowdfunding becoming popular, especially in emergency situations. Even with these new tools, the best way to ensure that your funeral will be taken care of the way you have in mind is to turn to traditional methods such as:
- Funeral Insurance: We think buying funeral insurance is a smart money move when it comes to paying for funeral costs. You will want to do a little homework before making your decision. Luckily, we’ve done a lot of the homework for you. Be sure to visit our Funeral Insurance pages for tips on buying the best policy for your situation.
- Pre-Need Funeral Contracts: Pre-need contracts are arranged with a funeral service provider and/or cemetery. Together you decide what you would like to include in the contract and then you can set up a way to pay for it. You may contract for just cemetery property and services, just funeral services or both. The important thing to remember when it comes to pre-need contracts is that you should be very sure what you are buying and the terms of the contract. For more information, check out our article on Pre-Need Funeral Contracts.
- Pre-Paying Funeral Costs: When you enter into a pre-need contract with a funeral home or cemetery, you make specific selections and you may pay for it in advance. The key benefit to pre-payment is that you lock in today’s prices. The main risk of prepaying is that you are counting on the fact that the funeral home or cemetery will still be in business when you need them. The best way to minimize risk is to do your homework when selecting a provider. For the pros and cons, see our article on Pre-Paying Funeral Costs.
- Direct Savings: Setting money aside in a conventional account such as a savings or money market account is a simple option for many people. The risk in this approach is that you may not be able to guarantee that the money you set aside is used for the right purpose. Also your survivors will need to be able to immediately access these funds following your death which will not be possible unless they have signing authority for the account.
- Funeral Trusts: A funeral trust is similar to a regular savings account, however, the funds are legally designated to be used for funeral expenses. Any funds left over can be distributed to your estate. Since different states have different rules regarding trusts, it is wise to consult with your attorney or your banker in setting up the trust. Many funeral providers can also help you establish a trust. See our article on Funeral Trusts for more information.
Contributors: Rick Paskin and Molly Gorny