Home' Trinidad and Tobago Guardian : June 15th 2014 Contents SBG18 FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JUNE 15 • 2014
You re in love and ready to buy
an engagement ring. But are
you ready to part with three
months salary as the dia-
mond industry has tradition-
ally suggested? If not, what s
your magic number?
Figuring that out can be a stressful, high-
stakes undertaking. Engagement rings come
with unique financial and emotional expec-
tations. And in a relationship intended to last
a lifetime, it s the first big test.
"It does set a certain tone about whether
a woman s expectations will be met by her
husband or not," said Julie Albright, a soci-
ologist and marriage and family therapist at
the University of Southern California.
Even so, how much to spend rests in striking
a balance between dazzling your beloved with-
out tarnishing your future financial goals
Here are five tips to help you size up how
much to spend on an engagement ring.
1. Consider future financial goals
Whether you have a wheelbarrow full of
cash ready to bring to your local jewelry store
or not, your future plans as a couple should
be part of the calculus for how much you can
Sit down with your partner and go over
your short- and long-term financial goals.
Beyond wedding expenses, goals could include
saving for a down payment on a home, prepar-
ing to start a family, as well as retirement
"This is the perfect entry point to see where
each person s money values come from," said
Michael Branham, a certified financial planner
in Edina, Minnesota. "How are we going to
put that life together and how does buying
something like an engagement ring fit into
2. Get a fix on expectations
First off, don t feel compelled to heed to
the expectation that a ring cost three months
salary, the benchmark established by the De
Beers diamond cartel.
"That s actually kind of a myth that people
somehow still believe," said Jamie Miles, editor
of wedding planning website TheKnot.com.
"You might have a more subtle bride who
wants something more petite and more
demure," Miles said.
A good way to gauge how much you may
have to spend is to find out what kind of ring
your would-be spouse is expecting. You could
try asking friends and family, but these days
it s increasingly common to see couples browse
jewelry stores together to remove the guess-
Last year, 64 per cent of brides were involved
in picking out their ring, while nearly a third
helped decide the budget, according to a survey
by The Knot.
That could be one reason the national aver-
age spent on an engagement ring, as well as
diamond carat size, or weight, have been ris-
The average spent on an engagement ring
grew 3 percent to $5,598 last year from a year
earlier, according to TheKnot. That s still down
from 2009 s average of $5,861, however.
The average carat size for the center stone
is just over 1 carat. The average total carat size
for engagement rings, including any diamonds
on the setting, is two carats, Miles said.
3. Weigh payment options?
You ve had a look at the setting and dia-
monds (or other gemstones) that your beloved
covets, and figured out which merchants offer
the best price. The next step is to figure out
how you will pay for the ring, as that can be
a huge factor in how much ring you can afford.
If you can put off the proposal, it s best to
save up money to buy the ring with cash, said
Gregg Wind, a certified public accountant in
Otherwise, how much you can afford
becomes a question of how much extra you ll
have to shell out overall if you finance the
purchase, and how much you can pay per
month while also meeting your other obliga-
Everybody should determine whether the
ring payment will fit into their budget, Wind
This savings goal calculator from
4. Beware of financing
Major jewelers generally offer financing with
the enticement of six months or one year
But if the ring isn t paid off within the pro-
motional period, or if you re late on a payment,
you could end up being retroactively charged
25 per cent interest or more on the total price.
"You want to be really careful how big of
a hole you dig yourself in the beginning of
your relationship trying to pay off a US$1,000
or US$2,000 or more ring with huge interest
charges every month, just because you didn t
have the forethought or wherewithal to save
for it over time," Branham said.
One exception might be if you have a credit
card that offers rewards, such as free points
toward air travel. But only if you can pay the
balance off in full within the first month.
5. Upgrade later
Even if you determine that you can t afford
as nice a ring as you hoped, consider buying
something more modest and popping the
question anyway. You can always trade up for
a nicer ring in a few years when your financial
picture is more established.
are only the beginning...
Planning for long-term relationships and future financial goals
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