How Much Does an Average Funeral Cost?

By Michael Testa

This article provides average funeral cost data for American funerals.

The average cost for an American funeral, like other goods and services, has been steadily increasing over the last two decades. Anyone that has seen a late-night television commercial for funeral insurance knows the typical American funeral costs more than $6,000 - but is this an accurate estimate? The short answer is "no."

Unfortunately, this $6,000 estimate is several years old and doesn't take into consideration the additional expenses associated with burial in a cemetery and the purchase of a headstone. Once all funeral-related costs are factored in, the typical traditional funeral service will cost the average family closer to $8,000 - $10,000. But before we discuss specific funeral costs, we need to spend a few minutes discussing how the funeral industry works. This will help us understand where our money goes when planning a funeral.

Average Funeral Costs: How the Funeral Industry Works

Most people planning a funeral use the services of a funeral home. The funeral director is either the owner of a funeral home or, more commonly, an employee of a large corporate-owned chain of funeral homes. In most cases the funeral director's compensation is tied to the profits he generates for the funeral home or the sales commissions he earns by selling related goods and services.

While the funeral director will serve as the family's main service provider when arranging a funeral service, other businesses are involved as well. In addition to the funeral home, most families will need to use the services of a cemetery and a headstone dealer. Often times, the funeral director will coordinate the purchase of goods and services between the family and the cemetery and headstone dealer. While this is certainly convenient for the family, you need to remember that you are really buying things from three separate business entities: the funeral home, the cemetery, and the headstone dealer.

The funeral director's main responsibility is generating profits for the funeral home. Unfortunately, this often means the funeral director's main objective is to increase the amount of money you spend at the funeral home, leaving cemetery and headstone costs as a separate expense for the family. This is why the typical funeral service is publicized as costing $6,000 - because the family often pays about $6,000 to the funeral director. However, the family still has to pay the cemetery for the purchase of a grave spot and the dealer for the price of a headstone. It's these additional goods and services that add another $2,000 to $4,000 to the price of a funeral. Unfortunately, many families do not find this out until after they have signed a contract for the funeral services with the funeral director.

Average Funeral Costs: Three Key Components

Because the typical funeral home charges $6,000 for their services, but the average family often spends closer to $10,000 when all is said and done, it makes sense to break funeral costs into their three main components: what's paid to the funeral home, what's paid to the cemetery, and what's paid to purchase a headstone or grave marker.

First, the funeral home

It's no surprise that most families call a funeral home when someone they love dies. The funeral home dispatches a funeral director to pick up the body and bring it back to the funeral home. The funeral director then schedules a meeting with surviving family members to help them arrange the funeral service.

The family spends approximately $6,000 on goods and services purchased from the funeral home. Here is a price breakdown of some of those typical costs:

* casket - $2,300 * funeral director's basic services fee - $1,500 * embalming and body preparation - $600 * funeral ceremony and viewing - $1,000 * miscellaneous (hearse, death certificates, obituary, etc.) - $600

Next comes the cemetery

The average traditional funeral service is followed by body burial in a cemetery. While most cemeteries used to be owned by non-profit organizations, nowadays many are owned by the same for-profit corporations that own the funeral homes. The average family will spend approximately $2,000 for goods and services at the cemetery. Here is a price breakdown of the typical costs: * grave space - $1,000 * cost to dig the grave ( sometimes called the open/close fee) - $1,000 Many families are surprised to learn that the price they pay for the grave site does not include the cost to dig the hole for burial, but this is how it works. Don't forget about the headstone or grave marker While thetypical family has spent close to $8,000 by now, there are still more costs involved in completing the funeral transaction. If the body is buried in a cemetery you will also need to purchase a headstone or grave marker. The type of stone you are required to buy depends on the section of the cemetery in which the body is buried. A headstone is typically a two-piece granite rock that sits on top of the grave site. It's typically two feet high. A grave marker is typically a flat granite or bronze plaque that lies flat on the ground on top of grave site. Here is a rough approximation as to what you can expect to spend on a headstone:

* Headstone - $2,000 * Grave Marker - $1,000

Again, the funeral home may coordinate the purchase of the cemetery space and headstone on behalf of the family - it just depends on the funeral home. While this can be a great convenience to the family, the price can be higher because the cemetery or headstone dealer will have to pay an additional sales commission to the funeral home.

Average Funeral Costs: Can they be lowered? - YES!

It is fair to say that many families are truly surprised when they add up all the costs associated with a funeral. Fortunately, proper funeral planning can yield considerable savings. I have spent nearly ten years helping families plan more affordable funeral arrangements, and I have found that with a little planning and knowledge, the typical family can realistically reduce their out-of-pocket funeral expenses by $3,000 to $5,000. If you would like to save money the next time you need to make funeral arrangements, you can review a money saving funeral guide.

Michael Testa, CPA, CFP Funeral Expense Expert

http://funeral-tips.com/... the web's most popular site for money-saving funeral tips.

Learn how to reduce and control runaway funeral costs by visiting http://funeral-tips.com/planning-a-funeral-with-the-funeral-savers-kit/.