Why funerals cost more than you expect

Funerals are rarely cheap, often costing thousands of dollars in Canada. Caskets, burial vaults, limousines, music, flowers and food are just some factors that contribute to funeral costs. Taking a closer look at associated costs will help you understand how to save money on funerals.

According to a 2012 industry survey conducted in North America, the average cost of a traditional funeral in a place like Nova Scotia was in excess of $10,000. About half of this sum was spent on the cost of the service itself, and the remaining half was spent on what the funeral industry calls hardware, which are things like caskets and burial vaults. While this figure represents the average in the province, it is certainly possible to spend less on a funeral. However, according to Canada's insurance industry, the lowest priced funeral still runs around $2,500.

There are so many things that go into planning a traditional funeral that it is easy to overspend. For example, music, which makes so many funerals special, comes at a cost. Flowers, professional pallbearers, limousines and hiring a hearse all add to the total, too. To help stay within a budget, enlist the help of family and friends to price out services and extras. Also ask the funeral director for cost-saving suggestions.

Other factors that can increase the costs of a funeral are clothing and transportation, especially if family members live far away from the location of the funeral. There are also expenses associated with feeding guests who might want to attend the funeral. These are the so-called "hidden costs" that many people don't consider during the planning stages.

It is possible to negotiate traditional funeral costs with professionals, so ask your funeral director about cheaper options. A large amount of money can be saved on caskets, for instance, especially if you opt for an eco-friendly one. Additionally, look at the cost of a cremation versus a traditional funeral, because cremations are generally less expensive. Consider taking out a private funeral insurance policy prior to the death of a loved one so that some -- if not all -- of the funeral costs can be covered under the plan. Finally, check whether the deceased has paid into the Canada Pension Plan for a minimum of three years, since this may qualify you for a lump-sum death benefit that can help pay for funeral expenses.