- Traditional engagement rings could cost you about 2 months worth of your salary.
- How to shave off thousands on your engagement ring.
- Instead, pay for a more extravagant wedding, travel, or invest.
Spring is just around the corner, and you know what that means – love is in the air! If you’re thinking about asking your honey to tie the knot as you watch the flowers bloom, it’s time to talk about money. As we all know, engagements rarely happen without a ring, and deciding how much to spend on one is the first of many wedding-related money decisions a couple will have to make together. And like so many other large ticket purchases, the process can be confusing and stressful. Even more so because of the emotional significance attached.
The Price Of A Ring
So, just what is the right amount to spend on an engagement ring, anyway?
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The jewelry company DeBeers, which created the “A diamond is forever” slogan in the 1930’s, began an ad campaign in the 1980’s that suggested spending two months’ worth of salary on an engagement ring. That message seems to have stuck, as two months’ (sometimes three), is the guideline referred to most often, especially by jewelry marketers.
If you ask the couple themselves, however, you’ll find that most (around 74%) of unmarried couples feel that somewhere between $500 and $10,000 is the right amount to spend on an engagement ring, with $2,284 being the average. 21% feel that less than $500 is a more appropriate amount, while 5% are comfortable with $10,000 or more.
What people actually spend can be quite different. The wedding website TheKnot.com estimates the average price of an engagement ring for the brides they surveyed was $5,598.
And then there’s this: two Emory University economics professors completed a survey that showed that spending more than $2,000 or less than $500 on an engagement ring was correlated with higher rates of divorce than spending $500-$2,000. Now there’s something to think about when you’re in the jewelry store looking at price tags…
What You Could Afford If You Spend Less On A Ring
But let’s look at things another way. The couples surveyed above felt that, on average, $2,284 was an appropriate amount for a ring. But suppose you’re in the 5% that is willing to spend $10,000 on a ring. What else could that $7,716 difference mean for you? Here are some examples:
Pay for your wedding: $7,716 will pay for over a fourth of the average wedding, which runs around $28,400.
Ditch student loans: It would also pay for over 25% of the average amount of individual student loan debt, which ironically was also $28,400 in 2013.
Travel in style: $7,716 would foot the bill for a lavish honeymoon to Europe or Hawaii.
Mortgage payments: $7,716 could be a 5% down payment on a $154,320 house. Or pay for a year’s worth of mortgage payments on that same house.
Invest in your future: But perhaps most impressive of all: $7,700 invested with a 4% return over 30 years would grow to $24,974 during that time. If the return was 6%, the amount would increase to $44,224. 8% and the nest egg would be $77,482.
So, let’s assume you’re sold on paying less for a ring and putting that money elsewhere. What’s the best way to cut back on the budget but still end up with a ring you’ll both treasure for a lifetime? Try these easy tricks:
1. Choose a gem over a diamond.
Less precious stones such as rubies or sapphires can be lovely, and they’re more unique than the diamonds everyone else is sporting. If it’s good enough for Kate Middleton, who wears a sapphire, it’s probably good enough for the rest of us too.
2. Go vintage.
Does your family have an heirloom ring that could be passed down to you? It’s a beautiful alternative that won’t break the bank.
3. Buy just under that next carat size.
A 0.9-karat instead of a full carat, or 0.6-karat instead of a three-quarter carat will cost less with little noticeable difference for the average person.
4. Sacrifice just a bit on color or clarity.
Again, a savings in cost for something you probably won’t notice.
5.Choose a smaller center stone surrounded by much smaller diamonds.
Sometimes called a halo, this will give you more bling for less money. And consider something other than a round shape as well. Round diamonds are the most popular cut, and they’re usually the most expensive.
6. Shop around.
Don’t go with the first mall jewelry store you walk in to. And look into buying online, which is the easiest way to compare prices to make sure you get the best deal. Just do your due diligence to make sure you’re buying from a reputable dealer.
So if you’re thinking about popping the question this season, make sure you consider not only the price of the ring you buy, but what that cost means for your other long term financial plans.