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How Much to Spend on an Engagement Ring

How Much to Spend on an Engagement Ring

The marriage proposal is probably the pinnacle of romantic planning. Every detail, from rose petals to candlelight kisses, revolves around that one special ring. Typically, the guys are expected to pick out the perfect ring. That’s a lot of pressure to put on men who, often, are not experts on buying women’s jewelry in the first place.

So what’s a guy to do?

Well, it all depends on if this proposal will be expected or not.

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The Surprise Proposal

This is a tough scenario. If you are completely in the dark about what her tastes and expectations are in a ring, finding the right one can be daunting. How much should you spend? That really depends on your budget and your bride.

According to weddingstats.org, the average cost of an engagement ring for 2013 is just under $5,000.

However, people spend on both sides of the spectrum. It really comes down to what you can afford, and what you feel will fit your lady’s personality and taste.

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The Planned Proposal

While I didn’t know when my man would drop to one knee, I knew it was coming. We had been talking about our future lives together from very early in our dating relationship. We actually went ring shopping in Belfast, Northern Ireland, and enjoyed being pampered by the jewelers with cushy seats and sparkling bubbly while I tried on all types of dazzling gemstones. He observed my choices and learned my taste.

Then, he took this information and found the perfect ring on his own. It made my ring much more special than if I had picked it out. It also added an element of surprise, as I didn’t know when he bought the ring or when he would pop the question.

Here are 3 things to consider when looking at the cost of the ring. (My husband did!)

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1. What price range is affordable?

While the last thing you want to do is go too cheap, you also don’t want to start off your marriage saddled with a huge debt. It’s the man, not the ring, that she is marrying. The guy who stays within a discussed budget will be laying the groundwork to trust him in other important financial matters later in the relationship. I was happy my husband was smart about his purchase and didn’t spend outside of our comfort zone. I have heard that two-month’s salary is a good indicator; but like all societal antidotal ideas, not necessarily worth following.

Before going ring shopping, ask yourself:

  • What is the earning potential of both people in the relationship?
  • Can you pay for the ring upfront from savings or do you have to finance it?
  • If you need to finance, what type of financing is available at what interest rate?
  • How fast can the debt be paid off?
  • What other expenses (wedding, house purchase, honeymoon) will you face going forward, and how will additional debt affect them?
  • How will purchasing an expensive luxury item affect pre-existing financial commitments?

While it’s easy to get caught up in the whirlwind of emotion buying an engagement ring, make sure you put serious thought into these questions and develop an existing price range before you let a smooth salesman turn your head.

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2. What type of ring best represents the woman?

Again, my husband knocked this one out of the park. Not only did he study my jewelry preferences, he went a step further and found a princess-cut setting for a beautiful single diamond. Since the translation of my name means Princess, I found that particularly romantic. He also knew that I wasn’t into flashy jewelry. I liked simple, elegant rings without a lot of extra gems. He found one single, gorgeous stone in a graceful platinum setting. Since I work with my hands a lot, my ring needed to be easy to clean and durable. He accounted for this. His ring choice fit me better than any other ring I ever tried on. Now, after eleven years, it hasn’t needed one repair and looks as new as the day he gave it to me.

Choosing the right ring means fitting it to the woman behind the ring. It means not just knowing her ring size, but knowing her heart. I am a tomboy. Rings equivalent to a mortgage downpayment make me nervous. I’m always afraid I will damage or lose them. I am more comfortable with a more practically-priced offering. Other women love to be frosted with expensive jewelry. The woman’s tastes affect the price.

3. What’s the best way to get the biggest bang for your buck?

My husband drove over two hours from our town to get to a large jewelry supplier. This supplier was able to offer him a ring without the retail markup of regular jewelry stores. Therefore, in cutting out the middle man, my ring was appraised at double the cost he actually spent on it. He stretched his dollar as far as it could go, so when he got on one knee and opened the box (complete with tiny light to make the ring extra sparkly), he knew he was giving me his best representation of his love for me without causing extra debt grief.

Buying the perfect engagement ring can be a difficult decision, but with a bit of planning, it doesn’t have to cause anxiety. Instead, the experience can be enjoyed as the centerpiece of a beautiful memory. I want to stress, a relationship doesn’t rise or fall on the cost of the ring. If it does, it certainly isn’t built on a deep enough foundation to last during the ups and downs of marriage. Whether you spend $1,000 or $10,000, the priceless part of the relationship is the love found as two hearts become one, not in the hardware. The ring is just the symbol—not the sum —of a successful marriage.

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Sarah Hansen

A corporate-sales professional turned entrepreneur

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Last Updated on August 20, 2019

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!

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Featured photo credit: rawpixel via unsplash.com

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