I too have a mother with BAD financial abilities. (disabilities?) (Strangely enough she's a bookkeeper? What's up with that?) For YEARS there has been this spirit of her and I are in this together. Her favorite saying is "we're family".
I have an urge to rush in and tell you how to solve this problem. Which is crazy, only you can do this. But it was so hard for me that I wish I could save some one else from going through it.
I had to start slowly. First, disentangle yourself from her financial situation. Don't ask her about her bills and only talk to her if she asks for specific help with something - ie "how do I contact these people to set up a payment plan?" Regarding the phone, it's in her name she'll have to take the consequences for not paying her bills. You pay her your share. Eventually they will cut off the service, but you can take your phone and start service under your own name.
As the oldest of a single mother, I understand how easy it is for mothers to lean on their children - mostly the oldest. But you have to remember, it is not your job to fix your mother. She needs to have healthy boundaries with friends her own age to lean on. If she can't do that, you need to have boundaries for yourself. Your mother has no obligation to pay for her mother's funeral. Her estate will and if she doesn't have any money the state will bury her. Now before anyone starts in on me about how cold that is. Please understand I'm not saying that is the way to go. I'm only saying that she really does have a choice in this matter. If she CHOOSES to bury her mother, than she needs to do it within the financial situation she's able. But sitting around saying she has to do this and being pissed because other people don't hold up their end of life's "has to", she's digging herself a hole and making herself crazy.
You're mother has many choices, by doing what "she has to" "because it HAS to be done" she's choosing to act like a victim. Looking at the choices in life and choosing your path is part of active living. Doing something because it has to be done makes a person feel like a victim.
This really isn't about your mother, it's about you. But the things I mention were something I had to understand before I could set my own boundaries. I always felt bad for my Mom, life always seemed to "have it out for her". Because of this I was always there. (I can't even tell you how much money I've loaned her "until Friday" and never seen again.) Once I was able to understand she had choices - whether or not she could see them - it was easier for me to say "this is what I can and can not provide".
Once I understood this about life in general - and my mother in particular - it was easiest for me to start with little boundaries and work up to the big ones. For example, she's always volunteering her kids - me included - to do things for people. I was always going along, no matter what was going on in my own life, because I felt like people were counting on me. I started saying no on days it wasn't convenient for me. It was hard at first, she was mad and would go on and on about these poor people that needed our help. But eventually she stopped volunteering me for things. (Keep in mind, I was an adult, living on my own at this point.) I slowly worked my way up to saying no when she asked for money. I also don't ask her about things that irritate the crap out of me. (She likes to complain about the same thing over and over, but she never does anything about it. I always thought it was my job to fix it.) Honestly, while I'm not proud of it, initially when I would say no to lending her money, I would tell her I had no money to give. Lying is not the best thing, but it was what I could manage. I've now worked myself into being about to say no with no explanation or excuse. She asked, that was my answer. (I tell you this not as a way of saying, this is the best way to handle something. Just as an example of how I really had to work myself into the boundaries I needed.)
These are really hard issues. We love our mom's. We don't want bad things to happen to them. But when they are the bad things happening to them, what are we supposed to do? Healthy boundaries are good for everyone. (Even the people that don't want them. ;-) )
I think the dynamic is especially hard for children of single mom's. They do so much for us, most of the time without any fatherly support. We want them not to feel alone or have to shoulder so much burden because they are so good to us. But we can't be a partner to our mom's and we can't be their therapists.
It's not unlike kids really, they make their own choices and we have to let them live with the consequences of them. (Not a pleasant experience, but important ones.)