First, try to preplan. We're used to shopping around for everything else, but people feel like they need to spend big on funerals as a way to show their love. It's a good idea to have a family discussion or leave instructions in your will about what you want. That helps determine how much to set aside, and keeps family and friends from spending too much.
Don't pre-pay. Funeral homes' pitch to lock in funeral costs by pre-paying while you're alive may sound appealing, but it's almost never a smart idea. State regulation controls how much if any of those plans can be refunded, should you move, or if the funeral home goes out of business. Most offer little recourse. It's better to create a payable-on-death account or a funeral trust through a life insurance company.
Do consider pre-owned plots. There's a thriving secondary market for plots that people purchase early in life, and then decide they don't want because they have moved or have different funeral plans. Discounts can reach 80%. Just make sure to involve the cemetery in the purchase to ensure the title is transferred properly.
Compare funeral home prices. People tend to pick the same funeral home their family last used, but it's worthwhile to shop around. Prices for the same service vary from one provider to another. For example, in Burlington, Vermont, a direct cremation can cost as little as $1,200 or as much as $3,000.
Shop around for funeral goods. Aside from the service itself, a casket is the biggest funeral expense. The FTC's Funeral Rule gives consumers the right to purchase a casket or urn anywhere they choose. Some casket manufacturers actually direct buyers to Costco.com, where the same models can be as much as 15% less expensive.