Here's Why You Need About $7,000 Set Aside For Your Death

Business Insider

subway grim reaper

Flickr / Rob Boudon

As the saying goes, only two things are certain in life: death and taxes.

Frankly, we don't like thinking about either.

But data from the National Funeral Director's Association says we had better start thinking about our mortality — at least, as it relates to our bank account.

According to the NFDA, the median price of an American funeral in 2012 was about $7,000. Even a "simple" cremation costs an average of $3,200 (although Fox Business points out that you can snag a cheap urn for about $20 at Costco).

Prices will just keep rising, if the past 50 years are any indication:

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historical funeral costs

nfda.org

In a post on the blog Personal Capital, personal finance writer Holly Johnson recounts some of her experience working in a funeral home — namely, the costs. She writes:

… The cost of an average funeral doesn’t include cemetery expenses such as burial space, a burial vault, the opening and closing of a grave, or a headstone. When accounting for those expenses, the average cost for a traditional funeral rises dramatically, usually to somewhere between $9,000 and $12,000. I’ve even seen hundreds of families spend upwards of $15,000 or more over the years.

Johnson goes on to explain that many families are caught unawares by the costs of burying or cremating their loved ones, and some have to go into credit card debt to do it. "Now they are stressed over losing their loved one and having thousands of dollars in new debt," she says. She remembers families who were surprised that their loved one's life insurance either didn't cover the funeral costs or had lapsed, and families who had done nothing to plan for their inevitable demise.

Who wants to leave their family miserable and indebted? While we could caution 75-year-olds to start saving, it's a lot easier for a professional with at least one steady income stream to get ahead on savings than for a retiree. No one's saying you need an account marked "funeral" (that's bit morbid, even for the most responsible saver), but the numbers show that getting in the habit of putting money away today will benefit you to the very end.

Hat tip to Financial Samurai.



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