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If you’re thinking about proposing, you need to read this advice.
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If you’re thinking about proposing to your significant other, you want to be smart about what ring you purchase (if any). After all, most people spend a lot of cash on their engagement ring, and you don’t want to make the wrong choices when it comes to this big financial decision.
To help you out, finance guru Dave Ramsey has some advice on smart engagement ring shopping. In fact, he’s offered five tips to think about. The big question is, should you follow them?
1. Set the right budget
Ramsey’s first big piece of advice is to spend around a month’s salary on a ring — or two months’ at most. This is a bit more conservative than many experts suggest as a traditional “rule of thumb” is to spend three months salary.
While looking at the ring cost in terms of your salary might seem to make sense on the surface, this is kind of a silly way to set a budget for this type of purchase. If you find a ring you both love that costs less than a month’s worth of your salary, would you really want to spend more? Or if a special ring is important to you and your future spouse and you can budget to spend more, there’s not necessarily anything wrong with that if you don’t compromise other financial goals.
There’s also a really wide range of salaries. If you’re a high earner making $20,000 a month, does it really make sense to spend that much on a ring?
Ultimately, rather than looking at how much the ring costs relative to what you earn, consider what you can work into your budget and how much a ring costs that your (hopeful) future spouse will love.
2. Pay cash for the ring
Ramsey also recommends paying cash for your engagement ring. “Pay as much as you’ve budgeted for in cash,” Ramsey said. “Never go into debt to buy your girl the perfect ring. That means you should never buy a ring with a credit card, a bank loan or financing.”
While Ramsey is right that financing an engagement ring and paying interest on it doesn’t make sense, you don’t necessarily need to buy your ring with cash. While Ramsey says some jewelers will negotiate based on a cash deal, there’s no real reason why they’d be more open to negotiate if you have cash than if you pay with a credit card. You may as well charge your purchase and get the points for it as long as you can pay off the ring in full when the bill comes due.
3. Explore all your buying options
Ramsey suggests looking into all different options for purchasing a ring including online jewelers, traditional jewelers, pawn shops, trunk and gem shoes, and even big box stores. “Don’t knock Costco or Sam’s Club when you’re looking for jewelry — including engagement rings,” the Ramsey Solutions blog reads.
This is great advice, as you never know where you’ll come across the perfect ring for your beloved. Just be sure you’re working with a trusted, reputable place — especially if you look into a pawn shop or online seller.
4. Ask for a discount
While Ramsey acknowledges that chain jewelry stores often don’t discount their prices, he said it never hurts to ask to pay less. This is also advice that’s well worth following. There is often room for negotiation especially with independent jewelers. And you may be surprised to find that you can save a little if you try.
5. Be willing to compromise on diamond quality
Finally, Ramsey says you can often get a great ring for less if you’re willing to compromise a bit on the quality of the diamond. If you want a larger stone, for example, then you may be able to afford one if the color or clarity isn’t quite as good.
This is a helpful tip too, since not everyone can afford a diamond that’s perfect in every way. Ultimately, you should decide what’s most important about the look of the ring and make sure you prioritize what matters most to your partner while staying within a budget that’s comfortable for you.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
