The average engagement ring costs $5,500.
That makes it a big enough purchase to start planning for. The following are over a dozen tried-and-true tips to save for your engagement ring.
Start At The End
Create a deadline to come up with all of the money for the ring. This is tricky because who knows when they’re going to meet the love of their life and propose. But let’s say you have some time before you pop the big question. Set a deadline and save towards it.
Ballpark The Cost For An Engagement Ring
Now until you visit a jewelry store, you can estimate what you might spend on a good ring. This is always tricky, but you can learn more about ring pricing, materials, gems, and how to save money on the purchase.
For now, let’s just call it $5,000. If you plan on proposing in twelve months, you have to sock away $416 a month. And that’s if you start from scratch. Some people start off with a little savings or they can sell something, so they might only be budgeting to come up with half that ($208 a month isn’t bad). More on this later.
List Out Big Expenses
Before you start figuring out a savings strategy, you have to list out some big expenses to include in a budget. What expenses do you foresee in the future? You have the ring, the wedding, the honeymoon . . . and then you have life. Maybe you are saving for a downpayment on a new home, a car, and/or education. All of these things cost a lot of money and you have to plan for them. List out all of these things so you can include them in the next tip.
Create A Budget
Once you have your big expenses mapped out, it’s time to combine them with fixed and variable expenses in your existing budget. Now most of you probably have a budget, but this new budget might be more intense. If you’re good with budgets, you can skim the next steps. Just add a new budget for an engagement ring and carry on as usual.
If you haven't already, set aside money (and continually budget for) life’s financial surprises. A big dental bill, hospital bill, or fender bender repairs can really set you back. Stashing a grand or two away will really help you stay on track. And if it’s not there, add the rainy day weather fund to your budget. It all adds up over time.
Use An App
The good news is that there are so many apps and software programs that make budgeting simple that it’s almost fun. Check out budgeting tools from Mint, Digit, and Acorns to get started. It’s wonderful how every transaction gets categorized, tagged, and color-coded. You need to connect this app to your credits and bank cards so it can track all your progress and spending habits. Are you spending too much on dining out or buying clothes? The app will tell you!
Stick To The Plan
Creating a budget is the easy part. About 87% of millennials “always or sometimes” make unplanned purchases. Be part of the elite 13%. Your daily task is to stick to your budget. You must be relentless at following your budget and making strategic cuts if possible. Evaluate your “needs” versus “nice to haves”. You’re planning for your future here, not short-term impulse purchases.
This is perhaps the most difficult step for many, but you must remain strong-willed. One unplanned weekend trip could make a huge dent in your engagement ring fund. Be strong.
Save With Others For Motivation
One powerful tip is to save socially. Maybe you have a friend who is saving for a down payment on a new car or something. The two of you can share your goals with one another to help each other stay accountable. In one study, on average 66% of participants saved more per month at the end of the experiment than they had prior to the experiment. And if you don't want to share your plans with friends or family (just yet), you can do it anonymously on sites like Stickk. Sites like these make you put something at stake to motivate habitual saving.
Fool Yourself Into Saving
Once you connect your apps to your bank, you can have part of your paycheck automatically routed to certain accounts. You might create a special savings account for your wedding. Set it up so a certain dollar amount goes to this account from every paycheck. This is great because if you don’t see that money in your main account balance, you won’t spend it.
Stick To Your Regular Shopping Routine
Don’t randomly shop unless it’s really important. Make grocery shopping a routine, and of course, stick to your scheduled budget. It might make sense to join a members only store where you pay a small yearly fee for big discounts on bulk items. Okay, so maybe you don’t need to stock up on five cases of merlot. However, if you shave a lot buying razor blade cartridges in bulk will save you hundreds of dollars over time. (Or better yet, start using a safety razor.)
The hardest part here is ignoring all the commercials and ads promoting huge sales. Everyone loves getting a deal, but people often buy things they don’t need just because it was on sale.
Enjoy your life, and spend money on things that make you happy, but temper that spending with your long-term budgetary obligations. Try to avoid sales, shopping centers, or tagging along with friends when they go shopping.
Practice Smart Debt
Credit gets a bad rap because people often abuse it. However, if used wisely you can save a lot of money while actually improving your credit. In fact, some credit cards can help you earn more money—all of which you can add to your engagement ring savings.
The play here is to strategically use your credit without incurring long-term debt. There are many credit cards that give you cash back for all your purchases. Maybe they give you 4% cash back for shopping at their store and 2% for everything else. One tactic is to treat the credit card like a charge card.
With charge cards, you have to pay off the entire balance every month. So do that with a credit card with a good cash-back program. Don’t carry a balance month to month. When you get paid from work, pay your balance off. In the interim, you’re paying for everything with a card that’s earning you money back. Of course, to not affect your credit score you’ll need good credit and a large credit line that you keep under 25% each month.
Dine In More
Cooking at home can save you a lot of money, of course. But you’ll also be improving or perfecting a skill set that is going to add to your relationship. Let’s face it, everyone likes to be served great food when they go out. But at what cost? You’ll be hooked once you create dishes that taste almost as good or better than many restaurants—at a fraction of the total expense. And it’s exciting to learn what your partner likes. Now about dish duty: that’s something you’ll have to work out on your own.
Skip One Vacation
This is a hard one if you’re used to it. However, you can think of it as trading one yearly vacation for a nicer honeymoon vacation. And by doing so, you can save thousands. That puts you much closer to saving enough for the ring.
Make More Money
To hit your ring budget, you might consider asking for a raise. Have a discussion with your boss about your next targets so you can work towards them. Though this is likely already part of your work plans, it's more important now than ever.
Rent Your Mind
Of course, for some, asking for another raise might not be an option. In that case, consider a side hustle. What can you do that others would pay you for? This might include hobbies like photography or common repairs. Depending on your experience, you might have the background to become a part-time consultant or coach. If you've achieved a big result that others want, consider this option.
Do you have things that have just been collecting dust? It's time to get rid of them! Post your items on Poshmark, Ebay, or Etsy to get rid of old stuff for instant cash.
Lots of stuff you own can be rented. From tools to rooms, there is usually something that you can loan out to others for a hefty fee. Check out services that give you a platform to do this and get to work.
Though technically the last few tips are not savings tactics, they are incredibly useful. The more money you start out with the less you'll have to tuck away for your engagement ring. That means putting more money toward other savings goals like your wedding, home, or anything else. So pick a few tips and start saving for your ring.
In the interim, check out high-quality lab grown diamond engagement rings so you can set a good budget to aim for.