Link: http://www.financialpost.com/personal-finance/family-finance/story.html?id=1006638
Summary
This article is about how Canadians, after buying a house and sending their children to college, dying might be the most costly thing they will ever do. Nicole Renwick, execute director of the Memorial Society of British Columbia estimated that the average funeral cost was $10,000.
"The average cost of a funeral service in eastern Canada is $3,075. In central Canada, professional services can exceed $4,000. In the West, the average cost is $2,875."
Arranging a funeral for loved ones could be highly stressful. However, most people want to provide loved ones with the best funeral possible and also not wanting to be cheap. Funeral experts recommend that preplanning your funeral would get rid of their families having to worry and deal with it later on.
Connection
The connection between this article and chapter seven is the demand for money. It is essential to have money so that people can carry on daily business. This require for money is referred to as the transaction demand. People who worry about preparation of their funeral would have a higher demand for money because they have to also support their families such as education for their children. The category precaution, under the list of demand for money, is also a factor that is covered in this article. The precautionary demand for money may happen if a loved one dies and they did not pre-arranged their own funeral. Their family members would have to pull out the money they kept ready for unexpected circumstances and emergencies to cover up the expenses for the funeral.
Reflection
Although I have never experienced planning a funeral before, but I believe that it is very stressing. I see my aunts and uncle who are already pre-arranging their own funerals and also helping my 90 year old grandma pre-arranging hers. I am still in a young age so my income is low. The amount of money that i hold for precautionary purposes is not as much as what my parents have. I do not have as much responsibility as what most adults have and so i would use most of my income for transactions and the rest for precautionary purposes.
1 comment:
dear melissa,
I love how you related funeral expenses to this chapter! The whole Chinese tradition of burning (fake)money at a funeral is ironically represented here. In terms of economics, going even further with your idea of the transactional demand increases as the precautionary demand increases, we can say that saving for funeral expenses also involves opportunity cost. As individuals save a significant portion of their dispensable incomes for their future funerals instead of investing in higher interest-earning assets, their money will be generating any new money other than the meager rates of their saving accounts.
I am not against saving for rainy days, but the idea of someone potentially saving $10,000 for his/her funeral is absurd. The rich are often told that they cannot bring their money to their graves, but who knows, maybe that's not true anymore.
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