How much do Canadian couples spend on engagement rings? According to a March 2016 Global News article, the average cost for each one is around $4,700. After including the typical event and honeymoon costs, the total price tag for a wedding can reach almost $40,000. Cutting expenses can be challenging for couples who want to tie the knot. That’s why it’s worth considering a few key factors before you drop any cash on an engagement ring.
Behind the Engagement Ring “Rules”
You may have heard of the supposed “rules” for buying engagement rings. Depending on who you ask, the ring should cost either two or three times one’s monthly salary. Statistics Canada’s 2017 figures revealed that the average weekly salary is around $986. That means the typical Canadian earns almost $4,000 per month before deductions. With these figures, following the oft-repeated rule on rings results in a price tag between $8,000 and $12,000.
How did these modern engagement ring purchasing practices develop? Money Under 30’s David Weliver divulges that they originated with a shrewd marketing campaign launched by the London-based diamond company De Beers. He also contends that they aren’t practical for younger couples because of typical debt burdens and lower salaries. To lower costs, he suggests a few alternatives:
- Pay for the ring with cash.
- Select a family heirloom piece.
- Choose gemstones that are less expensive than diamonds.
Pros and Cons of Financing Your Ring
If there’s no room in your budget to purchase an engagement ring in full, you may be tempted to finance it. Your credit history will determine the types of offers you receive along with spending limits and interest rates. Individuals with favorable credit can choose from many options:
- Personal loans
- Vendor’s credit cards or revolving credit lines
- Major credit cards issued by financial institutions
At the same time, you’ll need to think about how this new debt will impact your upcoming marriage. NerdWallet’s Erin El Issa points out that each spouse is liable for individually incurred debts. This is true regardless of whether they originated before or after the wedding. Yet those debts still affect the couple’s overall financial health. A significant debt load can make it difficult to purchase a home together, contribute to a savings account, or plan for retirement.
In another Money Under 30 article, David Weliver offers suggestions for people desiring to purchase engagement rings on credit. While he still warns readers not to buy rings that they cannot afford, he discusses some favorable financing options. Some jewelry retailers may offer 0 percent financing or no interest and payments for a predetermined time period. Weliver strongly suggests reviewing each offer’s terms. With some, you’ll pay a much higher interest rate after the promotional period expires.
Depending on your credit score, you may qualify for cards that come with 0 percent interest on new purchases for up to one year. Be sure you know what your new APR will be. Also, you should assess whether you can pay off the ring before the promotion ends. Purchase your ring from a reliable online jeweler. Buying online could save you a significant amount of money, letting you spend as little as 50 percent of the brick-and-mortar retailer price. Make sure you request a shipment method with tracking and a signature requirement as well as insurance to cover the ring itself.
Choose Your Credit Options Carefully
In the past, society judged a man’s ability to provide for his future wife by the type of engagement ring he gave her. It’s true that some still take notice at an elaborate ring with a decent-sized diamond. Ultimately, you must consider the effects of purchasing one either with cash or credit. After all, part of your goal should be making smart decisions for your joint financial future.