As with any major purchase such as a car, house, or vacation, the first step in buying an engagement ring is figuring out how much you can spend. You will do much better by setting a budget first and planning for the purchase rather than shopping and then trying to figure out how to afford paying for what you bought. With a budgeted amount in place, you’ll be less tempted to overspend on such a significant, emotional purchase.
So, how do you set the budget for your engagement ring purchase? If you aren’t living on a budget, that’s the first place to start. Budgeting does not have to be complicated; it is simply listing your income and deducting your expenses to see how much you have left to plan your purchase with. Start by listing out your monthly expenses, such as rent or mortgage payment, car payment, insurance, loan payments, credit card payments, internet service, cell phone, and utilities. Then add your variable expenses such as money spent on entertainment, gifts, investments, gasoline/ transportation, car repairs, and groceries. What you have left over is the amount you can use to budget for special purchases.
If your expenses exceed your income, you’ll need to reduce your expenses. The best place to start is with variables such as entertainment and food spent at restaurants. Reducing or eliminating these expenses for a time will give you some wiggle room in your budget to start saving for that engagement ring. Once you have a budget framework set up, you simply adjust it as your income goes up or your expenses go down; you can use this simple budget framework to live within (or ideally, below!) your means, increase your savings, build an emergency fund, plan for major purchases, and pay off debt.
Once you have established your monthly budget, you’ll know how much you can plan to save every month for either a down payment on a ring and to make monthly payments, or if you plan to pay for the ring with cash, you will be able to determine how long before you’ll have the entire amount saved. Other sources besides using your savings to purchase your engagement ring include:
• Tax return
• Side gig
There are no rules for how much you should spend on your engagement ring, although some jewelers recommend two to three month’s salary. The amount you spend is totally up to you and should be set according to what you can afford, and the type of ring you want. Diamonds are the traditional choice for an engagement ring, but many couples choose to do something different. There are many colored precious and semi-precious stones that are attractive alone or combined with diamonds in a ring setting, as well as vintage or estate pieces that may speak to your individual tastes more than diamonds do. Also, there are a variety of metal choices for your ring, from platinum to white gold, yellow gold, rose gold, to other possibilities your jeweler may recommend.
Additional methods of saving money on your engagement ring purchase besides choosing a non-traditional stone or metal include:
• Reduce the size of the center stone
• Surround the center stone with smaller stones
• Choose a halo setting
• Negotiate the price with the jeweler
• Repurpose stones and/ or metal from existing jewelry
• Use a family heirloom
If you have jewelry pieces you no longer wear, or a family heirloom you don’t want to use as an engagement ring, consider repurposing it for your engagement ring or, if your jeweler will accept it, use it as partial payment or to secure a discount towards the final purchase price. You may have more success using this method with a private jeweler as opposed to approaching a major jewelry store chain.