The Fifth C of Engagement Ring Shopping: Cost
Five tips to budget for the bling
It’s that time of year again. No, not the holidays. Engagement season is here, and if you’re among those thinking of popping the question, there are a few things to know before buying the ring.
The accepted rule of thumb when it comes to engagement rings calls for you to spend 2-3 months’ salary. But, depending on your financial situation, this number could be out of your price range.
According to The Knot, the average engagement ring costs $5,978 – which, for many is a significant investment. So, how can you budget accordingly to keep your financial goals on track and make sure you find the perfect ring? Luckily, we’ve put together a checklist for you.
1. Avoid guessing games
The pressure to find the right engagement ring can make for an overwhelming process. Having an idea of the type of engagement ring your significant other might prefer is a good place to start – try to pick up on clues by window-shopping, or simply ask for his or her opinion. From there, take the time to conduct your own research (asking friends, checking online) to get an idea of how much you can expect to spend – and how flexible this number can be.
Compare prices online, at jewelers and even in boutique or consignment stores. Just as you (likely) wouldn’t purchase the first car you see on the lot, take your time while looking for the perfect fit for your partner. And remember, you always have the option of spending what feels like the right amount given your current financial situation now, with the opportunity to upgrade the ring in the future.
2. Master the lingo
All it takes is a quick Google search to quickly become overwhelmed with the number of engagement ring styles and options. Halo settings, cushion cuts, side accents – it’s enough to make anyone’s head swim.
First, know the 4 Cs of a diamond: carat, clarity, color and cut. Understanding these characteristics can help you from a cost perspective. For example, as a diamond’s carat size increases, so does the price tag. What many people don’t know is that purchasing just shy of the next carat size can dramatically decrease the price. Having these handy pieces of information in your back pocket can ease the stress on your wallet when shopping.
3. Think big picture
When you set your sights on a big purchase like an engagement ring, you need to make sure it’s accounted for in your monthly budget.
Find where you can make cuts – canceling subscriptions, eating out less, reducing your spending on clothes or home goods – and set a monthly savings goal. By laying out your larger financial picture, you’ll be able to gain a better idea of how much – and how long – you’ll need to save for the right ring.
4. Keep your eyes on the prize
Setting a savings goal (or fund) for purchasing an engagement ring can be a helpful strategy if you commit to keeping it separate from your existing savings accounts. Resist the urge to dip into your emergency fund or retirement savings – you don’t want to derail your long-term financial goals for one purchase.
5. Cash or credit?
While purchasing the ring in full is ideal, some jewelers do offer payment plans. If you’re thinking about this option, weigh the pros and cons carefully. Consider the length of the plan, interest rates and other financial factors, as these could lead to added costs down the road.
An engagement is one of the biggest milestones of adulthood – one that should be enjoyed and celebrated, not overshadowed by financial stress. Take these financial considerations into account to achieve a confident money mindset for engagement season and beyond.