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Affording An Engagement Ring
As with any life-changing expenditure, it's a great idea to sit down first and see what makes financial sense. Fortunately, it isn't too complicated to figure out how much you can afford to spend on the perfect engagement ring.
A common method for determining how much to spend is to use three months' salary as a guide, although depending on your financial comfort zone, this could vary.
FOUR STEPS TO CALCULATE YOUR BUDGET
1. Calculate total income from all sources
-Take home pay
- Investment interest
- Other money received on a regular basis
2. Calculate total fixed and variable expenses
-Mortgage or rent
- Car/student loan/credit card payments
- Groceries & eating out
3. Compare expenses to income
- If necessary, see where you can cut back
- Allocate some or all surplus income to an engagement ring fund
4. Monitor the value of long-term growth
- Check savings accounts and investments often
- Track monies for an emergency fund or buffer for large future purchases
There is not one standard price for an engagement ring. According to jewelry industry estimates, on average, diamond engagement ring prices range from $3,500 to $5,000. That includes the cost of the diamond and the setting, which can add a few hundred or a few thousand dollars to the cost depending on the metal type, the ring design and any side stones you choose to add.