Thinking of popping the question? You’ve probably asked yourself: “How much should you spend on an engagement ring?”
You may have heard something about spending two months’ salary on a diamond engagement ring.
(Screeech!) Stop right there.
Do NOT let anybody else tell you what to spend!
First of all, do you want to know where the idea of two months’ salary came from? An advertising campaign put out in the early 1980s by DeBeers…the diamond company.
How much you should spend on an engagement ring is entirely up to you and your fiancée, especially if you’ve combined finances at all before this point. And while you may not want to tip off your beloved that you’re about to make the big purchase, it would be wise to feel out how much she expects you to spend ahead of time. If that amount is either much higher or much lower than your expectations, now’s the time to discuss it—not later.
Choose meaning over price-tag, every time
In my opinion, your engagement ring should be more meaningful than expensive.
Consider this: Which of the following scenarios is least meaningful?
- You use an heirloom ring, rich with family history, that doesn’t cost you a dime.
- You sacrifice to set aside cash every week for a year to buy a ring.
- You forgo a diamond altogether and get a less expensive stone but work with a local jeweler to create a custom design.
- You use three credit cards to immediately buy the biggest diamond you can charge.
You get the idea.
Yes, an engagement ring is a symbol of love and commitment. Sacrificing things you might like to buy in order to buy a ring is part of the tradition. But sinking yourself into years of debt just to buy the flashiest ring on the block is not.
Why two months’ salary is outdated
Two months’ salary has always been a lot of money to set aside for an engagement ring. I would argue, however, that this old benchmark is hardly realistic today for couples who want to marry in their twenties. (If you’re 35, 40, or 45, it’s another story, but hey, this is Money Under 30).
We’re not in the 1950s anymore.
Our generation is graduating with more and more student loan debt and facing minuscule entry-level salaries. We’re facing costs of living that are so high that we either have to move back in with mom and dad or bunk up with a half dozen random roommates. Almost all women are working (at least before having kids) and often earn more than men. And even with two incomes, most of us can’t afford to go from college to married homeowners with kids in less than five years.
The median age of first marriage in the United States is rising. That means many of us won’t even marry in our twenties. But those of us that choose to should not be forced to wait just because we can’t afford the “traditional” notion of what getting married—from the diamond to the altar—should cost.
Should you borrow money for an engagement ring?
Remember that when you get married, what’s yours becomes your spouse’s. That includes debt. You want to give your betrothed a big old ring, but do you want to hand her (or him) a big old credit card bill?
As I’ve written before, these days it’s unreasonable to think that you’ll be debt-free before getting married. Most of us have student loans that we’ll be paying for years. Still, the less debt you bring into a marriage, the better. If you don’t have to tack on several thousand dollars worth of consumer debt before tying the knot, don’t.
So you can see where I’m going here: If your plan is to finance the engagement ring either through a jewelry store’s line of credit or on a credit card, be careful.
If your situation is such that you want to propose soon but don’t quite have the cash available, borrowing just enough that you can pay back in 12 months or less isn’t the worst thing. Learn more about the dos and don’ts of financing an engagement ring here.
Just avoid carrying that debt into the marriage.
How much should an engagement ring cost?
Here’s the cop-out answer: Whatever you think it should cost, and that you can afford. That last part’s important. It makes little sense to start your married life deeply in debt. Period.
If you think you should spend as much as possible on an engagement ring and can afford a six-figure rock, go for it. If you think you should spend two months’ pay on a ring but you’re already ensnared in credit card debt, you can’t afford it. Readjust your expectations or wait until you’ve improved your financial situation. Don’t go into debt, falling into one of the money mistakes young adults make.
How can I save on an engagement ring?
Whatever you decide to spend, you can cut the final cost of your diamond by 40 to 50 percent by doing your homework and buying online.
Also, it’s NOT all about size. Learn more here at a micro-site I built just on buying diamonds: