Experts agree: Don't splurge on an engagement ring
When you're ready to propose to your partner, it can be tempting to go all out on an expensive diamond engagement ring. But experts agree: Don't splurge.
"Forget all the bulls--- about two months of salary," says Ramit Sethi, personal finance expert and author of "I Will Teach You to be Rich." "That is pure marketing nonsense. Look at your own financial situation to decide what you can comfortably afford."
That amount will vary, person by person. "If you want to spend $100 on a ring, great! If you want to spend $50,000 on a ring, and you can afford it, also great," says Sethi. In the same way, he thinks it's fine to spend a lot on your wedding — assuming you've been saving for and can manage the expense.
In the end, he says, getting the ring should make you feel good. "I don't believe in focusing solely on the price — I want to focus on the value of your gift, which ultimately only you decide. You should consider what your partner wants, but ultimately you decide," he adds. "Not your friends, not society, not De Beers, and certainly not some random frugalista commenter on the internet."
David Bach, best-selling author and co-founder of AE Wealth Management, offers similar advice. "You should only spend what you can actually afford," he tells CNBC Make It. "Don't fall for this idea that you need to be spending six months of what you make on a ring. That's utter nonsense. I want you to buy a ring that you can afford."
"Shark Tank" star Kevin O'Leary recommends you sidestep the expense of a ring altogether.
People who sell rings give you the idea that "you should go into debt, you should put it on your credit card," he tells Make It. "How about this idea? Don't buy one!" Besides being expensive, diamond rings "don't produce any dividends or any interest." Consider using the money to renovate your kitchen or get a new instead.
O'Leary believes that love should not make you blind to other realities. When you're starting out, "the worst thing you can do is put yourself in debt for your wedding. I know it sounds romantic to spend a lot of money — it's crazy to do that."
If you do want a ring but don't have a lot of cash to spend yet, suggest putting off the purchase, he says: "Tell your girlfriend/fiancee/soon-to-be-wife when you have the money to invest in a ring, you'll do that." That's what O'Leary did. He originally proposed with a tiny diamond that he got from a wholesaler and then, for his 25-year wedding anniversary, the self-made millionaire bought his wife Linda a much bigger 5.5 carat diamond.
"The whole idea is to remember you're building for your future. Don't get into debt, save, save save and invest," he says. "It's a fantastic way to protect yourself down the road."
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