Being in a relationship that’s heading towards marriage is an incredible thing. Many of us find ourselves wanting to make a lifelong commitment with the one we love. I’ve been married for 5 years now and can say that it’s truly amazing. I love building my life with my wife and having fun adventures along the way. If you’re considering taking your relationship to the next level (i.e. proposing marriage) first of all congrats! It’s certainly not a decision to be taken lightly and is the start of a new adventure for you and your partner. 

One of the next big questions on your mind will be purchasing the engagement ring. Society and advertisers have probably ingrained the idea of buying a diamond ring into your brain since as early as you can remember and you’re probably going to start the process. It’s certainly a bit intimidating starting to look at rings and seeing the price tag. It’s tough to know how much you should be spending and how nice of a ring to get. Certainly seek out advice from family/friends but I thought I’d add a few of my thoughts into the mix, more so from a financial perspective. Spoiler alert – you won’t walk away with a formula or a number for how much to spend, I just wanted to get you thinking about a few things.

Realize it’s marketing

Engagement rings are a HUGE business for jewelry companies. That’s why they spend tons of money on advertising, especially around the holidays. I’ve heard that many jewelers will lose money 11 months out of the year and then make it all back in December. On top of selling holiday presents, the engagement ring is another HUGE selling opportunity for them. There’s a fair amount of money to be made and they’re out to make it. Even better, they have a captive audience. This isn’t something we as consumers buy on a regular basis, and in some cases is a once in a lifetime purchase for us. Jewelers know this and use it against us by urging us to buy more. Citing ‘true love’ and ‘lavishing your partner’, they insist that we sacrifice and put up top dollar to purchase said ring. While I’m not opposed to true love (in fact I’m for it), I am opposed to letting others dictate how I should spend my money. 

Although it gets a little into conspiracy theories, there is some truth to the fact that diamonds are not worth nor are as rare as jewelry companies make them out to be. If you’re keen to figure it out for yourself, do a little experiment. As you’re ring shopping in jewelry stores, get a sense of cost for a certain type/size of ring. Then, head over to a smaller jewelry store or a pawn shop and compare the costs. Likely they’ll be considerably less. As soon as you purchase the ring, it’ll depreciate (lose) in value. If you changed your mind about proposing and were unable to return it, you would likely get a lot less trying to resell it. 

Remember that engagement rings are wonderful purchases that will hold meaning for a long time, but that jewelry companies exploit that feeling and want you to pay and spend a lot more. 

Figure out how much you want to spend

Ok, so your eyes have been opened a little and as you’re shopping through a jewelry store, you’re a little more aware of what’s going on. Yes you’re going to likely spend a fair amount of money on a ring, but you don’t have to buy the most expensive one or even spend more than what you are budgeting for. I’ve heard a variety of metrics to help you gauge how much to spend – 1, 2 or even 3 month’s salary is a benchmark range. It’s not a bad way to think about it, and maybe go into the process with those 3 numbers in mind. I probably wouldn’t advise spending morethan 3 month’s salary but you definitely want to spend an amount that gets you a ring you can be proud of. Side note – perhaps it was a total YMF classic move getting married younger when my salary was lower and thus I was able to spend less? (Just kidding Mrs. Money Finance if you’re reading this). 

Know that more ring doesn’t mean more love. An engagement ring is an outward symbol to the world of your love but just because you bought a big or a small ring doesn’t mean your love is that much bigger or that much smaller. Figure out what will make you and your fiancé happy and find an amount that works well. Don’t break the bank but certainly don’t skimp either! 

You don’t have to buy a diamond

One misconception out there is that you have to fit into the mold and follow the process. I’m here to tell you that you actually don’t have to buy a diamond ring. Perhaps you’re not able to purchase a diamond or choose not to spend that much, or perhaps your fiancé would prefer another type of stone. There are plenty of other options out there; an engagement ring doesn’t have to look like the ones we see in advertisements. Without spoiling the surprise, do a little investigating on what your future fiancé would like. Perhaps they would prefer a different stone; like a sapphire or ruby. Maybe they would like a diamond but something a little smaller. You don’t have to ask them directly if you don’t want to, but asking some of their friends couldn’t hurt! Figure out what will work for the both of you and get something that’ll make your fiancé happy and something that you are proud of them wearing. 

Shop around

As with most purchases in life, it’s always advisable to shop around. The same idea goes with purchasing an engagement ring. You’ll definitely want to check out a few different jewelry shops in your area, maybe a few of the bigger ones and a couple of the smaller ones too. Going into it, you’ll be armed with both a budget and an idea of what you’re looking for. I remember when I was shopping, I walked into one store and it quickly became apparent that their rings were out of my price range ($20,000+). But hey, you never know and it takes some work. It’ll take some time to find the right ring! I probably wouldn’t advise buying online without seeing it in person, although I ultimately purchased Mrs. Money’s ring online, after having her look at it in person (the jeweler didn’t have a location where I was at the time). But know that there are options out there, whether a traditional store or a more modern approach to buying a ring. Do your homework and shop around!

Get it insured

You may or may not be aware, but most renters/home owner’s policies will not cover expensive jewelry, like an engagement ring in the event of a loss. Losing an engagement ring can be devastating, and having to pay for a replacement out of pocket even worse. For literally a few dollars a month you can get it insured, and I highly advise it. I’ve known one friend who did have her ring stolen and she was so thankful to have insurance on it. Even family heirlooms can be appraised and insured, it’s not just new purchases. It’s fairly easy to insure a ring, you’ll get it appraised and will take that value/written description to be used in the policy. Your auto/home/renters insurance company should easily be able to get you a policy and once again, it’ll probably be just a few dollars a month, so please consider carefully! 

Be happy

Purchasing an engagement ring is a wonderful and exciting time in your life! Let’s hope the answer is ‘yes’ and that you have a great engagement and life together. I’d say my final piece of advice is to be happy and content with your purchase. I’m sure you will, but be smart and consider carefully before purchasing an engagement ring. You’d hate to have buyers regret on it being too little, too big, not the right style etc. so as best you can, make a purchase that you feel good about. Your fiancé and hopefully spouse will wear it for a long time, potentially the rest of their life!