Young Americans refuse to overspend on engagement rings, a survey shows – the motley fool
It's no secret that getting married is expensive. And much of the cost comes in the form of the engagement ring that starts everything.
For years, the convention was to spend three months' salary on an engagement ring (or at least advertisers wanted us to believe). But younger Americans don't buy it. In fact, two-thirds of young millennia and Gen Zers believe an engagement ring would cost under $ 2,500, according to results from a TD Ameritrade survey. It's less than half the $ 5,680 that the average engagement ring costs nationwide.
Image source: Getty Images.
If you plan to propose in the near future, it pays to sit with your loved one and sync on what your engagement ring will cost – especially when there are better things you can do with the money that follows.
1. Pay for Your Wedding
The average cost of a US wedding is $ 33,391, according to the wedding planning site The Knot. It is not necessarily what your wedding will cost. But if you want to make it through the big event without getting a ton of debt, you're better off spending less on an engagement ring and setting aside for your actual wedding.
Starting a marriage with a bunch of credit card bills is a good way to bring yourself and your new spouse to the world of stress. It's also likely to hurt your finances, making it harder to tackle other common goals you may have. That's why buying a less expensive engagement ring can really pay off in the long run.
2. Build Emergency Savings
Most Americans lack emergency savings in a very big way. If you don't have a lot of money in the bank, what you used on an engagement ring can be used to establish that security network. Ideally, the Emergency Fund should contain enough money to cover three to six months with significant living costs – such as rent, transportation, utilities, food, and healthcare. So if you lose your job or relax with an unexpected home or car repair, you won't be forced into debt.
3. Save for Home Payment
Although marriage and home ownership do not always go hand in hand, many new couples aim to buy when they can combine resources and more easily afford a mortgage. If that is your goal, the money you save by cannot buy an overly expensive engagement ring, used to offset a down payment. Putting 20% down (or more) on a home is ideal, as it helps you avoid private mortgage insurance – which makes housing property less expensive.
4. Chip away at your student debt
Many college degrees get away from their studies with debt images, and then carry the debt with them well into their 30s, 40s or more. Rather than pumping money into an engagement ring, use some of that cash to pay tribute to the student loan balance. That way, you save money on interest and shake that burden before.
It's nice to have your beloved the most beautiful engagement ring the money can buy. But the practical side of you should realize that over-spending on a single piece of jewelry is just not worth it, especially when there are several important things you can do about the money. The less you charge your budget for an engagement ring, the less it will be in your actual marriage.
