As with any major life purchase — home, car, big kitchen appliance — it's a good idea to first sit down and see what makes financial sense.
When it comes to choosing an engagement ring — where to start? Well, it's important to be sure you can afford a ring before committing to its purchase, especially as you begin your new life as a married couple with shared finances.
Here's the good news: It's easier than you might think to find a ring that fits your style and your peace of mind.
How to Figure Out Your Budget
Step 1: Gather Income Information
Collect records of your income, including your take-home pay, interest on any investments, and money you receive on a regular basis from any other source. Record all of these assets individually on paper or in a spreadsheet.
Step 2: List Your Expenses
Record your annual fixed expenses, including:
- Mortgage or rent
- Cell phone
- Car payments
- Credit card payments
- Student loan payments
- Internet service
- Any other fixed payments you make each month
Next, estimate your variable expenses: what you spend on things like groceries, going out, gas, car repairs, etc. It's easy to underestimate these, but the closer you can get, the better.
Once you've tallied up your variable expenses in your spreadsheet, add them to your fixed expenses and divide the total amount by 12. This final number allows you to ...
Step 3: See Where You Stand
Compare your total expenses from Step 2 to the total income figure from Step 1. If expenses are greater, see where you might be able to cut back to start saving for the ring. If the income is greater, you're in good shape — you can start adding to an engagement ring fund.
Step 4: Think Long Term
What about the long-term growth of your savings accounts and investments? A good estimate of any return you can expect to receive can be added into your budget as a buffer for larger future purchases — like an anniversary getaway or a surprise repair to a leaky roof.
Feel good about the budget you just created? Use it as a guide to help plan for your ring purchase, and then use it the rest of your life by updating it, knowing it, living by it.
Make a Plan
So — how do you use your budget to plan for an engagement ring purchase?
There's nothing wrong with saving up the old-fashioned way! Simply earmark some savings for the ring, and you're all set.
Looking to use a combination of savings and credit? First, determine how much credit you can qualify for and, more importantly, how much you're comfortable using. If you use credit to purchase an engagement ring, your payments probably will continue into the marriage. Ask if your fiancée is OK with that — don't assume.
If you do plan to use credit for all or some of the engagement ring's purchase price, consider the credit options available at Zales. You might get a better rate than what your credit card company offers, or even no-interest plans.
Lease to Purchase
Need a no-credit option? The lease-to-purchase financing method allows you to take your ring home the same day and own the merchandise once you make all the payments.
Romance and Responsibility
Setting a budget is one thing — committing to stick to it's another. Once you decide on the amount to spend, explore what that amount will buy. Get comfortable with your options, and don't let the emotions of the moment steer you off course.