I am so blessed to have someone in my life that is willing to put up with random obsessions, constant rants about money, and my constant need to be alone. After some time (6+ years), I’ve come to the conclusion that this is probably the person that I want to spend the rest of my life with.
After coming to that conclusion, I sit down at my computer and start shopping for the one thing that is “supposed” to show that love to someone. The one thing that is “supposed” to be a symbol of how much I care.
What do I discover instead?
A f****** (excuse my language) industry that is taking advantage of peoples’ emotions by over-charging them for an item that is ‘supposed’ to make them happy.
The prices of engagement rings are ridiculous!
This post is going to cover a brief history of the engagement ring, how much they cost, and what people actually spend on them.
A Brief History of the Engagement Ring
Why buy engagement rings in the first place?
I did some research and discovered a post that clearly states that engagement rings were first used by newly-wed Egyptians. They would exchange rings that depict their love for each other; “the more expensive the ring, the more love that was being shown”.
I think the keyword here is “exchange”. How did we get so lopsided?
The ring was also a clear representation of the giver’s net worth…
So… uh… what does that mean in my case? As of September 2019, I have a negative -$2,947.00 net worth. Does that mean that I’m exempt from purchasing a ring?
Like most people around the world I’m expected to provide my beautiful girlfriend with a ring that she has been brainwashed to want since Cinderella lost her slipper. I don’t blame her, I blame some genius marketers that have encouraged us to spend more than we can afford on some sparkly little pebbles.
In fact before this campaign, many women, thunderstruck from scarcity in the great depression, would much rather have had their future husband spend money on ANYTHING other than a diamond ring.
My point is that like many things we have let the environment around us dictate what we want. In this case its getting a little ridiculous. We are just programmed to think that if we love someone we they should have a huge and expensive engagement ring.
How much do engagement rings cost?
The good thing about engagement rings is that you can spend as much, or as little as you want on them. There is a wide range of prices and quality, shapes, and sizes.
In fact, ‘financial genius’ Kanye West spent an estimated $2 million on this 20 karat wedding ring. To be honest, he probably didn’t even spend that much. The designers probably gave her the damn thing for free, hoping that I (or the average consumer) would try and ‘keep up with the Kardashians’ (Pun Intended).
Even with rings like this skewing the data, in 2017, the average cost of a wedding ring was approximately $6,000 dollars.
But what do people actually spend?
What people actually spend on engagement rings
Before even thinking about purchasing a wedding ring I heard that the traditional ‘rule of thumb’ for engagement rings was ‘ to pay three months’ salary’.
Therefore, if you make $3000 a month then you should by a $9000 ring. If you make $1000 a month then you should spend about $3000. Some argue that this ‘rule of thumb’ is also a scheme that was created by marketers to encourage ‘us’ to spend more on diamonds.
Imagine, you are a 25 year-old millennial making $50,000 per year (gross). Your net pay is about $38,250.00. Following the traditional ‘rule of thumb’, you should spend approximately $9,500.00 on an engagement ring.
Fortunately, most Americans actually spend WAY less than that. After some research, I found that the median American spends anywhere from 3.7 percent to 5 percent of their annual income. Maybe this is why the divorce rate is increasing.
So someone making $50,000 per year spends about $1000 – $2000 of their annual pay on their engagement ring. This is a lot less than I expected. I’m a little shocked. With banks and jewelry stores offering all types of financing traps, I thought people would actually be spending more.
It seems like I’m not the only one that is thinking clearly about this purchase. Average American is thinking clearly also.
To be clear, I am not whining because I have to purchase something for my girlfriend. I just think, outside of my investment account, this one item has the potential to be the most expensive thing I own. That just sounds ridiculous. Especially with my negative NetWorth.
I spend all of my time obsessing on how to save money and cut cost to reach financial independence. I’m not going to stop now because ‘society’ thinks I should.
Fortunately for me (and most people) our partners are understanding. If you explain your financial position and they generally understand what ‘you can afford’ then they know what to expect. Its all about managing expectations folks.
I’m not in the dream selling business… I’m in the reality business. The reality is that we both have dreams that are completely independent of the size, quality, or shape of an engagement ring, but dependent on the amount of money in our bank accounts. The more expensive a ring the longer it will take to accomplish other dreams that can truly make us happy.