Funeral cost-cutting boosts cremations

NEW YORK (CNNMoney.com) -- The recession is not only forcing people to cut back on their living expenses -- but on their dying expenses too.

Industry insiders say more people are economizing on funerals by cutting back on elements such as limousines, wakes and embalming - and opting for cremations rather than burials.

"Let's face it, passing away is not a choice," said John Chasca, president of the Cremation Association of North America. "If there aren't funds available for a traditional funeral, people will opt for something less expensive."

The number of cremations have increased noticeably over the past year at the Hollomon-Brown Funeral Home and Crematory in Virginia Beach, Va., while traditional funerals "are holding steady" at the business' 10 locations, according to Mike Nicodemus, manager of cremation operations.

The average funeral cost at Hollomon-Brown Funeral Home and Crematory is $8,500. The average cost for a cremation is between $3,000 to $5,000.

According to the National Vital Statistics Department, 34% of deaths in the United States were cremated in 2006. Based on current trends, the Cremation Association projects that number to grow to 40% by 2010 and almost 60% by 2025.

The weak economy is just the latest in a series of factors responsible for an uptick in national cremation rates and a downtick in elaborate funeral services. Also contributing is the fact that families move around more and aren't as rooted in a place where a loved one would be buried, as well as concerns that burials aren't as environmentally sound.

Even when it comes to burials, Nicodemus has noticed ways people are trying to save some money.

For instance, instead of having a visitation the night before, he said they are having it on the same day of the service. Just that change alone can eliminate $400 to $600 from the total funeral cost.

Others are not opting for a limousine service, thereby saving $275 to $375.

And some are not holding a viewing. "If you don't hold a viewing, then you're not required by law to embalm," said Nicodemus. The price of embalming can vary between $500 and $700.

Peter Moloney, co-owner of Long Island, N.Y.-based Moloney Family Funeral Homes, said his 100-year-old family business is well aware of changing trends.

"We are seeing people much more concerned about costs," he said. "You can't put off a funeral like you can put off buying a car because you're stressed about your job"

The average cost for a traditional funeral at his funeral home is between $10,000 to $12,000, compared to $7,000 to $9,000 for a cremation.

Moloney said his clients are also paring down on funeral services. "We do what we can to help bring down the costs," he said.

But the cutbacks on services combined with increased preference for cremations - New York's rate is about 30% - has been a strain on his business as well.

"It's hard for us to lower our prices when the government doesn't reduce taxes for small businesses like ours," he said.

"Our utility costs are going up," said Moloney. "Our payroll is going up. Our insurance is going up. So how are we going to lower our prices when everything else is going up?"

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