Ask Dave: Plan the funeral, but don't pre-pay for it

Dave Ramsey

Q. My husband passed away last year at just 45 years old. We always tried to be careful with our money, and we were in good enough shape financially that I paid for his funeral with cash. A few days ago, I started getting letters from the funeral homes in town encouraging me to pre-pay for my own funeral. I’m 42, and in very good health, so is this a good idea?

— Janet

A. My advice is to pre-plan, not pre-pay. Unfortunately, you learned firsthand how hard it is to make important decisions in the middle of that kind of grief. Many times, people are so emotional when they face these kinds of things that they make bad decisions. That’s why pre-planning, and making decisions ahead of time, is a really good move.

Now, here’s why it’s never a good idea to prepay for this kind of thing. If you live to an average age, for what you’d prepay today at your age, you could invest the amount and be self-insured. You’d have a ton of money sitting there when the time comes.

Events like this make you realize the need for proper planning, but don’t ever pre-pay for them. God bless you, Janet. I’m so sorry you’re going through this.

Extended warranty


— Ami



Financial Columnist Dave Ramsey