Planning for the inevitable

The death of a loved one can be devastating enough before the realisation sets in that not only will a funeral need to be planned, it will need to be paid for and often at quite short notice.

... it's important to think about who that cost would fall on if something went wrong without warning.

Many are shocked to learn the cost of a funeral, but bear in mind many factors contribute to that cost.

Expenses that need to be budgeted for include the funeral director's fees for planning the funeral, transporting the deceased to a funeral home, a hearse to transport the coffin to the funeral location, the coffin itself, death certificate, preparing the body for viewing, burial or cremation, cemetery and crematorium fees, including the cost of a burial site, a headstone or an urn for cremated remains.

Other expenses can include newspaper notices to advertise the death, flowers, a celebrant, order-of-service booklets and refreshments for the wake.

Where you live can affect the cost of your funeral. A study by comparison website finder.com.au last year found Sydney topped the list of the most expensive Australian cities to have a funeral in, with the average ceremony in the city costing $8,357.

Despite the hardships it can cause, the research found 60 per cent of Australians had no plans to pay for their funerals, leaving relatives to foot the bill.

Bessie Hassan, insurance expert at finder.com.au, said people should be mindful of the financial impact funerals can have on their savings, and on those of their family members. 

"Funerals have been a part of our culture for thousands of years but unfortunately it's not something we like to think about when it's our own," she said.

"With the average funeral in Australia costing almost $7,500, it's important to think about who that cost would fall on if something went wrong without warning. The onus is on you to ensure you've considered the worst case scenario and communicated your preferences to your loved ones."

The research also found differences between the prices of burials compared to cremations, with the latter generally less expensive.

"Burials are more expensive than cremations in Australia because of the ever-increasing price of land," Ms Hassan said.

"When you factor in additions such as candles, celebrant fees and overcrowding in cemeteries, prices add up quickly and the cost could really impact whoever is left to foot the bill.

"Those who are concerned should consider pre-paying the cost of their service or taking out a comprehensive funeral insurance policy."

The Australian Securities & Investments Commission's Moneysmart website contains useful advice about options for paying for funerals and about assistance available to do so.