You’re in love and ready to buy an engagement ring.
But are you ready to part with three months’ salary as the diamond industry has traditionally suggested? If not, what’s your magic number?
Figuring that out can be a stressful, high-stakes undertaking. Engagement rings come with unique financial and emotional expectations. And in a relationship intended to last a lifetime, it’s the first big test.
Even so, how much to spend rests in striking a balance between dazzling your beloved without tarnishing your financial goals together.
Here are five tips to help you size up how much to spend on an engagement ring.
Consider financial goals. Whether you have a wheelbarrow full of cash ready to bring to your local jewelry store or not, your plans as a couple should be part of the calculus for how much you can afford.
Sit down with your partner and go over your short- and long-term financial goals. Beyond wedding expenses, goals could include saving for a down payment on a home, preparing to start a family and retirement planning.
Get a fix on expectations. Don’t feel compelled to heed the expectation that a ring cost three months’ salary, the benchmark established by the De Beers diamond cartel.
That’s actually kind of a myth that people somehow still believe, says Jamie Miles, editor of wedding planning website TheKnot.com.
A good way to gauge how much you may have to spend is to find out what kind of ring your would-be spouse is expecting.
You could try asking friends and family, but these days, it’s increasingly common to see couples browse jewelry stores together to remove the guesswork.
The average spent on an engagement ring grew 3 percent to $5,598 last year from a year earlier, according to TheKnot.
Weigh payment options. You’ve had a look at the setting and diamonds (or other gemstones) that your beloved covets and have figured out which merchants offer the best price.
The next step is to figure out how you will pay for the ring, as that can be a huge factor in how much ring you can afford.
If you can put off the proposal, it’s best to save up money to buy the ring with cash, says Gregg Wind, a certified public accountant in Los Angeles.
Upgrade later. Even if you determine that you can’t afford as nice a ring as you hoped, consider buying something more modest and popping the question anyway.
You can always trade up for a nicer ring in a few years when your financial picture is more established.