Four things to consider when budgeting for a funeral

Funerals have changed a lot in New Zealand over the years, but there’s one thing that’s still the same – they can be expensive to plan for. That’s why it’s important to talk about our options with loved ones to ensure there are financial measures in place if we pass away, or when someone we love dies.

In the New Zealand Seniors Cost of Death Report, we spoke to community members who were Kiwi and aged over 50, as well as funeral directors across the country. The aim was to dig deep into the cost of a funeral and how it can affect financial planning.  

Here are four key price factors to keep an eye on when setting a funeral budget. 

Funeral directors

One unavoidable fact of life is that things tend to become more expensive over time due to rising costs and inflation; and funerals are no different. According to the Cost of Death report, over 74% of people agree that rising funeral costs can be attributed to funeral director fees.

Funeral director fees refer to the price payable to the funeral home for organising the service. These fees usually include everything from transporting and storing the remains, mortuary care, lodging the required paperwork and more. Funeral directors may also charge you for third-party services such as the celebrant, flowers, venue hire, or any other additions you decide to have. At a difficult time, many of these costs can seem challenging to manage, and many costs need to be paid upfront.

Service costing can be confusing, too. The different options offered by funeral homes can make it hard to compare prices like-for-like, but the good news is that you can always organise a funeral yourself as there’s no legal requirement to use a funeral director in New Zealand. Keep in mind that if you’re organising a service with a lot of different elements, using a director can make the process much easier, especially if you’re in mourning.

Cemetery space

New Zealand is decorated with beautiful land, but the amount we have available is limited. This means burial plots are at a premium for those who want their remains placed underground. In fact, the Cost of Death report revealed that burials in New Zealand are even more expensive than in Australia.

You can expect to pay an average of $10,206 for a standard burial in New Zealand. However, if you’re worried about exceeding your budget, cremations are a cheaper alternative at an average of $7,316. Given the considerable difference in cost, it’s not surprising that more and more Kiwis are opting to be cremated when they pass away.

While the choice to be buried or cremated can make a sizeable difference to your funeral budget, you may also need to consider whether there are any religious or cultural restrictions involved.     

Prices vary by region

Where you pass away or wish to be laid to rest may have an impact on the overall cost of your funeral. However, choosing where to have your final send off means you need to factor in other expenses too, such as the cost of transporting remains or even accommodation for family and friends.   

Depending on the type of funeral you opt for, the most expensive area to have your remains cremated is the Wellington and surrounding regions. Full-service cremations here cost an average of $9,089, almost double the amount you would pay in Auckland. The priciest area for burials is the Otago, Southland and West Coast region where you can expect to pay an average of $12,932 for a premium ceremony.

If you’re only budgeting for a basic service, Wellington and surrounding regions had the lowest burial price, while Auckland was the cheapest place for a basic cremation.    

Financial recovery costs

It’s not just the upfront cost that needs to be considered when setting a funeral budget. In many cases, if the deceased hasn’t adequately discussed financial matters with family and friends, the cost of a funeral can have a long lasting financial impact.

While most Kiwis are relying on their savings or estate value to pay for funerals, the Cost of Death report shows that over 33% of those surveyed experienced financial hardship afterwards. Even more concerning is the time it can take to get finances flowing again – up to 69.2% took at least six months to recover, while 31.1% needed over a year to get their financial position back to normal. To avoid this, it may be a good idea to leave a safety net in your funeral budget to make sure there are enough funds to cover your family’s ongoing living expenses. 

Funeral insurance is another option to help out your loved ones if you pass away. Receiving a quick payout to cover the cost of your funeral means family and friends can focus on spending time together, rather than worrying about how to pay for your funeral.

Funeral and tangi costs are on the rise in New Zealand. Find out how costs compare with the rest of the country by using our Funeral Cost Calculator.