How To Start A Funeral Fund In 5 Easy Steps

Planning ahead for your funeral expenses is a great idea. There are several ways to do this, and one of the best and easiest is to start a funeral fund. Here’s how to start a funeral fund in 5 easy steps.

I tell a lie. Starting and filling your funeral fund is actually even easier than that – it only takes two steps. No one believes it’s that easy, so we have to say it takes five steps. But it really is just two steps to starting your funeral fund. We filled it out with 3 additional steps which are really just tips to help you keep saving.

Funeral Fund Goals

The nice thing about a funeral fund – if you can put “nice” and “funeral” in the same sentence – is that there is a realistic goal that you can actually achieve. Most funerals across the USA tend to cost in the $7,000-10,000 range. You can do a whole lot to save on funeral expenses (see here for 50 ideas) with a combination of planning ahead, shopping around, and DIY options. So your final goal may be closer to $5,000, or perhaps with some detailed plans and support from family you can get it down to less than that.

Tip: Plan on $5,000 at a minimum; $6-7,000 as a realistic low-to-mid-range goal. It is nearly always better to be on the safe side. Your family will appreciate a little cash left over if you can get the costs below your goal.

Lastly, before we get to the nuts and bolts, I would be remiss to note the advice of every financial sage and guru out there: Make sure you have an “emergency fund” first, before all else. That’s the first step in saving; it can be used in case of a job loss, accident, health issue, unexpected expenses, etc. An unexpected funeral is an emergency, so you can think of your emergency fund as the funeral fund in the meantime.

OK, are you ready?

How To Start A Funeral Fund In 5 Easy Steps

1. OPEN A SAVINGS ACCOUNT

You’ll definitely need a separate account for your funeral fund. A savings account will be the easiest to access in case of an emergency, so this is the ideal type of account to open.

You can actually make a tiny bit of extra cash off of interest if you choose your account wisely. (Or at the very least lose less from inflation.) You can open an account at your current bank, but many of the major ones have very low savings account interest rates. You’ll likely find better rates by shopping around.

For instance, online-only Ally Bank tends to be near the top of most savings account interest rate comparisons. From  my personal experience with them they are very easy to use, easy to contact, have a clean and simple website plus a great mobile app.

A separate bank will provide the advantage of the funds being “out of sight, out of mind,” and you’ll be less tempted to pull them or even think about it. Whether you choose a different bank or your regular one, the main thing is to have a separate account. Be sure to note in your funeral arrangements that the account exists as well as instructions for how to access it.

2. SET UP AUTOMATIC TRANSFERS

Choose an amount to go into your funeral fund every month, week, or pay period. It can be $25 a month, $5 per paycheck, $10 per week – anything, as long is it is regular, automatic, and within your budget.

You may need to cut out a few things first. Finance blogs always mention cutting your daily cup of coffee, but there are plenty of other options to cut as well. Eat out less, buy less clothing or shop at discount retailers, carpool to save on gas, turn the heat down a degree or two and put on a sweater. There are many, many ways you can squeeze out an extra $5-10 per week or $10-50 per month. Balance what you can afford with what you know you can cut, and be realistic about it. Once you do that, make it a repeatable and automatic transfer.

That’s it! That’s all it takes to start a funeral fund. You’ll see your little fund grow over time until you reach your goal. The next three “steps” are really just tips to help keep you on track.

3. SAVE FIRST, SPEND LATER

Make saving a priority. If you save once a month, make the automatic transfer right after you get your paycheck. Don’t wait until the end of the month, because money tends to disappear into optional expenses.

4. START SMALL

If you can seed your funeral fund with a couple hundred dollars, great. If not, don’t sweat it – you have the rest of your life to save! Start small with $5-50 savings per month. As you get used to saving, slowly increase it.

Here’s another option. Anytime you get an extra bit of cash – a bonus at work, a garage sale, a gift from family, a side hustle – take a big chunk of that and add it to your funeral fund. On top of your small and regular savings, your account will be funded in no time! Then you’ll be able to start saving for something more fun than a funeral.

5. BE PATIENT

This may in fact be the most difficult step of all. Just. Be. Patient. Don’t touch the funeral fund; don’t get overzealous and try to save too much. Just let it be. Over time you will see your fledgling fund grow, and that will give you peace of mind knowing that you are taking care of yourself and your family in this way.