You've decided to ask your person for their hand in marriage. The next step is trying to figure out which ring to choose and how much to spend on it. If your loved one doesn't have a dedicated Pinterest board or helpful photos set aside to help you with the decision, you may be flying blind as you work through the process.
For many couples, buying an engagement ring represents a significant financial decision. In its 2020 Jewelry and Engagement Study, The Knot found the average amount spent on an engagement ring was $5,500. What you'll spend should have more to do with what's financially feasible. Here's what to consider before you say "yes" to the ring.
Many people may be familiar with the old adage you should spend three months of income on an engagement ring. What you might not know is this ingrained spending guideline was the result of an ad campaign run by diamond company DeBeers in the 1930s. As such, it may be best to put the past behind you and consider these factors instead when coming up with your ring budget:
|What does your significant other prefer?||
If your loved one dislikes diamonds or is concerned with how jewels are mined, you'll need to look into other options. Your partner may prefer jewels passed down from a beloved family member and repurposed into a new ring. Or they may even request a simple band allowing you to spend more money on the wedding, honeymoon or achieving other financial goals. If they're expecting a glittering ring that’ll wow others, you'll need to consider that as well.
|How much have you saved for the ring?||
If you're focusing on paying down debt or financially recovering from a job loss or other financial hardship, you may be starting your ring fund from scratch. If you've been saving for years for this very purpose, however, the sky may be the limit.
Getting a good sense of your overall financial picture before buying the engagement ring will help guide your decision and your budget.
How to budget for an engagement ring
Once you've considered your finances and tried to gauge your significant other's desires, you'll need to set your ring budget. Ask yourself the following questions:
|How much time do I have to make the purchase?||
The longer the timeline, the more likely you can save more money for the ring. If you have months or even longer in which to save, consider opening a dedicated savings account and having money direct-deposited each month or every two weeks to fuel your savings.
|How much money do I have available for this purchase?||
Are there opportunities in my budget to allocate more money toward the ring? If the rings you have in mind are beyond your current savings, you may want to spend some time cutting back on expenses to funnel more into your ring fund. To make money fast, consider taking on a part-time job, reducing expenses, canceling subscriptions you don't use, and spending less on entertainment and eating at restaurants.
Will I need to finance the ring and what terms would I be willing to consider?
If you think you'll need to borrow money to purchase a ring, decide what options will work best for you. If you have good credit, a credit card with a 0% introductory APR could allow you to purchase the ring and pay it off before the standard interest rate kicks in. A personal loan may also be an option, along with borrowing from friends or family. Before you take on debt, however, consider ideas like buying a less expensive ring now and saving up for a fancier five-year anniversary ring. Your significant other may appreciate your desire to avoid going into debt for the purchase.
Can you negotiate engagement ring prices?
Once it's time to buy the ring, you may find vendors willing to work with you on pricing. Search for other opportunities to save by using digital coupons, leveraging holiday sales or price comparing.
Once you have a ring style in mind, get quotes from several companies on similarly styled rings. Do the companies offer financing? You may be able to negotiate the terms of the agreement. If you’re considering financing the ring through a retailer, be sure you'll get a better deal there than you would borrowing from other sources before agreeing to their financing.
For many people, negotiating with retailers may be a little uncomfortable – but savvy shoppers know there’s often leeway with engagement ring prices. Confidence is key as you begin these conversations.
The bottom line
It's entirely possible to buy a stunning engagement ring without going into debt or blowing your budget. While there are several factors that affect an engagement ring purchase, ultimately it's important to understand what you and your future spouse value financially and how an engagement ring purchase is a reflection of those values.
If you’re considering borrowing money to finance an engagement ring, your credit score is an important facet of how much you'll pay in interest. You can get your credit score and report for free from Experian to find out where you stand and what steps you can take to reduce the total cost of your ring purchase.