It’s one of the most significant and highly anticipated purchases of your life. An engagement ring is more than jewelry or bling. It represents love, commitment, and honor, all mixed together into a design that will sit on her finger forever. Not that there’s any pressure or anything.
The real question is lurking in the back of your mind: How much should you actually spend on an engagement ring? It’s tempting to save for years to buy your future spouse a ring that the Kardashians would envy, but that’s rarely the most practical choice.
But what is? And, in fact, is there a one-size-fits-all solution?
The Two Months’ Salary “Tradition”
One conventional rule-of-thumb—or should we say, rule-of-ring-finger—dictates that men spend two months’ worth of income on the precious bit of bling.
OK, it’s a figure. But would you feel a tad more cynical about this venerable formula if you learned it wasn’t all that venerable? In fact, it didn’t even exist until the 1980s. And it never was a social custom. The idea actually originated from a De Beers ad.
Thrirty-odd years ago, the luxury jewelry giant launched an advertising campaign featuring a lovely lady sporting a diamond ring and a headline that read: “2 months’ salary showed the future Mrs. Smith what the future would be like.” The ad’s text, presumably written by Mr. Smith, added, “You can’t look at Jane and tell me she’s not worth 2 months’ salary.”
That’s how the tradition started. Oh, and it wasn’t the first time De Beers came up with engagement ring rules. In the late 1930s, the suggested spend on an engagement ring was one month’s salary. (Well, a lot of things doubled in price from the 1930s to the 1980s).
Finding a Formula
We’re sure your intended is every bit as beautiful as the mythical Mrs. Smith-to-be. But if you make $4,000 a month, you aren’t obligated to spend $8,000 on a ring. Consider the expectations of your future spouse and your financial situation before making a budget decision. Ideally, you want to find a balance between expectations and budget so that your fiancée and your wallet are perfectly happy.
Evaluate the following factors to estimate how much you’d be wise to spend on an engagement ring:
- Your current income
- Your monthly expenses (food, utilities, loan payments)
- Your savings
- Your income’s potential growth
Spend some time with a calculator. How much can you spend on a ring without financing it? You want to avoid debt if possible. If buying on credit is necessary, what amount can you pay off quickly – say, within 12 months?
Saving on Your Ring
There’s always a way to save, whether on clothes, cars, or rings. Use these techniques to get more bang for your buck, keep money in your pocket, and still score a jewel that makes you gasp and say, “that’s the one!”
- Save as much as 40% by shopping for your engagement ring online. Online retailers undercut local jewelers because they have less overhead, and many offer free shipping and returns.
- Consider an heirloom ring from an estate or vintage jeweler. Or, use parts of an antique ring to create a completely unique piece of jewelry for your fiancée.
- Shop around before settling on “the one” to make sure you’re not getting ripped off.
- Purchase a ring with slightly less weight, like 1.47 instead of 1.5 carats. This sneaky trick can save you as much as 15% on your total but provide nearly the same appearance.
- Choose a halo setting, which uses a circle of small stones surrounding a center gem, to help a smaller diamond appear larger and more prominent.
The Bottom Line
Keeping an engagement ring on a reasonable budget definitely isn’t impossible! Quite the opposite. It’s smart behavior, no matter how much you make.
The price tag on your engagement ring doesn’t matter as much as its meaning. Don’t spend two months’ worth of your salary for a ring just because a 1980s commercial has convinced us all that it’s the “right way” to do it.
By striking a careful balance between your budget, your partner’s wishes, and some savvy shopping habits, you can find the perfect ring at the perfect price.
Don’t wait to get out of debt! Read this: A Complete, Step-By-Step Guide to Get Out of Debt.
