Dear Dave,
I am 24 years old and I want to buy an engagement ring. I was going to ask my girlfriend to marry me within a month and I wonder how much I should spend. I make $85,000 a year and I have no debts. My high-yield account has about $40,000 in terms of savings and retirement, and $10,000 in 401(k).
Hayden
Dear Haydn,
marvelous! Your life is great, too, based on the numbers you gave me. Congratulations on all your success.
Now, let’s start the ring buying business. How much should you spend? People in jewelry stores will tell you how much money you earn for three months. Don’t listen to them. A month’s income is enough. When you two started, there was nothing wrong with cheap rings. More importantly, there is no correlation between the size of the ring and the possibility of marriage. A high-quality marriage is not based on the size and price of the engagement ring.
The day I asked my wife to marry me, the diamond on my finger was just a spot. You actually have to squint to see it. We’ve greatly upgraded this since then, but we’re in a much better financial situation. Now she has a headlight that can be worn on her fingers. This is what you get when you are willing to endure 43 years.
One last thing, make sure you shop before you buy it. First learn a little about diamonds. And don’t fall into the old line just because diamonds are “investment”. They are not. Most diamonds, especially standard diamonds purchased in retail stores, do not generate significant value once purchased. Now, due to high demand and limited supply, truly rare, high-quality and natural fancy diamonds can be appreciated over time. But it’s a different story.
Good luck, Haydn. I hope the lady in your life says yes, I hope you live a long and happy life together!
– Dave
