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.
“It does set a certain tone about whether a woman’s expectations will be met by her husband or not,” said Julie Albright, a sociologist and marriage and family therapist at the University of Southern California.
Even so, how much to spend rests in striking a balance between dazzling your beloved without tarnishing your future financial goals together.
Here are five tips to help you size up how much to spend on an engagement ring.
CONSIDER FUTURE FINANCIAL GOALS
Whether you have a wheelbarrow full of cash ready to bring to your local jewelry store or not, your future 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, as well as retirement planning.
“This is the perfect entry point to see where each person’s money values come from,” said Michael Branham, a certified financial planner in Edina, Minnesota. “How are we going to put that life together and how does buying something like an engagement ring fit into that picture?”
GET A FIX ON EXPECTATIONS
First off, don’t feel compelled to heed to the expectation that a ring cost three months’ salary, the benchmark established by the De Beers diamond cartel.