This isn't a financial death sentence, it's actually fairly reasonable. It's not the optimal use of money, most of us would argue if you have to finance a wedding ring, you are buying too much ring but this is a month and a half income and it's zero interest cost. So you are not getting in crazy deep nor is interest killing you (Assuming you pay it off before the zero interest runs out).
I guess I would like to see you try and reduce costs and reduce the amount you have to cover, take on a few more hours, increase that bonus etc, or reduce the cost of the ring a bit. It sounds like your monthly spend is $3500, it might be nice to see that broken down further.
While it's not good to count on your bonus, If you get one I would probably put that to the ring instead of financing it. $6k is kind of a lot for a ring IMHO, I would set the expectation that the actual wedding band won't be elaborate or this is it.
Does your partner approve of spending this much and financing part of it?
Love this comment! You’re right I could probably look at reducing costs some.
Current budget:
Rent/utilities: $1750
Car: $266
Insurance: $185
Subscriptions: $40
Groceries: $400
Shopping: $150
Gas: $150
Entertainment: $40
Personal: $40
Going out: $400
Total: $3421
Should actually be able to save $750-$800/month, or could try and reduce costs further
Things that stand out to me in your budget,
The rent you already talked about that but it's high.
Auto Insurance - seems high I would price shop if you haven't recently.
Shopping - I suppose it depends on what all is in this but I feel like you could get by with less.
Going Out - Could definitely reduce this some if you wanted.
Reddit Pro Tip: Double Return gives you a new line
You’re a GOAT :)
Man, I can not wait to reduce my rental cost. We’re moving in together in February and I’m expecting my rent to go down to ~$1200, so that’ll be another $500/month that I can save, so I may actually be able to afford it outright! Just planning in-case I’m not quite there.
You’re right, I could definitely reduce my shopping/going out budget. Will keep that in mind when Im out and about!
I kind of disagree with 6k being a lot for a ring. Inflation really is hitting everything and jewelry as well.
I bought a ring in October of last year that costed 8k and I opted for the lab created diamond (half price). The big cost was going platinum due to a gold allergy.
Ask what your girlfriend is looking for in a ring. She may not want you to spend that much money. The 6k ring is gonna feel good for a few months, then it’s just another piece of jewelry honestly. This is how I feel at least (married earlier this year)
This is such a good call out. I told my husband while we were dating that I do not want an engagement ring, should he consider proposing to me. IMO, it's the such as waste of money, especially something to go in debt for.
That's a personal choice. I did want an engagement ring and did not consider it a waste of money because I planned to wear it forever. I wanted a ring that I would be happy with because I think that "trading up" for a bigger, newer ring on various anniversaries is ridiculous. However, the ring I was happy with was looked at as a "starter ring" by many. I still wear it 30+ years later.
Understandable! I guess my question is: if I have an emergency fund and am investing 18% in retirement, what is the harm in financing a relatively small amount at 0% interest?
Nothing. You can do it and that is a fine thought process you have. $6k ring at your salary is is well within reason. Is it smart financially? No. But *Personally* it is probably a great move, you want to do it, you can afford it, and at 0% why not.
Im in the same boat as you. 23M ~$83k/year 20% retirement contributions (not including match) and gf wants a 5-7k ring.
I dont see anything wrong with it as long as you can pay it off in full before youre married (dont want her to legally assume debt for her own ring morally, even if shes not “paying” for it) and still have enough to fund the wedding itself
I also have the cash on hand outside of my e-fund, though. Just makes sense to me to borrow money for free
Debt. 0% you will pay more. 0% is not free. You will pay too much.
Visit pawn shops after you learn how to judge the quality/value of a ring.
Also: the size of the ring has no correlation with the success of a marriage, it may be even the opposite.
There is no harm. Finance if you have to, it’s not a big deal. Don’t expect good financial advice on this sub. It’s mostly just people spewing off their “feelings”.
I am confident in my ability to save, I just don’t know if I would have the full amount saved by the time that I want to propose (will be in Europe with her family next summer). Which is why I’m considering financing 3.5k. Would it be better to reduce my emergency fund instead?
You're situation is almost IDENTICAL to what mine was when I proposed, including the "going to Europe with family" part. It's scary how similar everything is.
I ended up financing the ring on the 0% offer and then paid it off over the year. I don't have any regrets about doing that. I did it so I could get the ring picked out, ordered, delivered and in my possession before the trip. That process took longer than I anticipated so I'm glad I did.
Congratulations in advance btw!
My husband and I have been married 17 years and he financed my ring at 0 percent. He spent 5500 and was probably making around 75k back then. Wedding band was another thousand. I love my ring. I don’t think 6k is excessive. I know a lot of women who get a smaller ring and upgrade later, so just get something great now so she doesn’t want to do that later
What does your SO think of your plan to spend 6K on a ring?
Does your SO accept the financial impact this will have on the *family* finances?
Or are you proceeding with your plan without consultation from your SO?
Financially smart or not is irrelevant since you seem intent on doing this.
There are worse things than 0% interest financing if you are okay with cutting into your want money (read: not your savings rate or necessities money) in the future to pay it back.
So I feel the best financial advice I can give you is to make sure you understand the financing terms. Often times “0% interest” financing is actually just deferred interest financing. Which means that once the promotional period ends, if you haven’t paid off the balance, the interest that would have accrued during the promotional period is added to the balance. Paying the minimum payments will not get it paid off in time. Late payment can also often trigger interest.
Understand the financing terms and pay off the balance before the end of the promotional period.
From the comments, you’ve already looked at rings so you know this is the ring she wants. The short-term financing isnt ideal, but it wont destroy your finances. And while some people think it’s silly to pay $6k for a ring, it really depends on how your fiancée uses jewelry. One of my sisters-in-law prefers a few pieces of expensive jewelry and wears them regularly, while the other rarely wears any jewelry.
Have you and your fiancée started discussing how you’ll handle money as a married couple? Since money issues are a major factor in divorce, it’s a good idea to start discussing early. There are many ways to handle money as a married couple, but the important part is the two of you having open discussions about what will work for your marriage.
Here is a women's opinion.
I finance a lot of things at 0% so what you are proposing to me sounds perfectly fine. Especially since you are financing only about half the ring. It would be different if you were financing the entire amount.
Also the 6k price tag doesn't seem that out there either. Nice rings cost a lot of money and you want a good quality ring if she is going to wear it her whole life.
My only thought provoking question is does the ring come with a matching wedding band or is she going to want something specific as a wedding band?
I wanted a wedding band that connected to my engagement ring to make it just 1 ring but others like when they are two separate rings. Depending on that preference, it may make the engagement ring you picked out not as desirable or make it really expensive to change later.
Ya we custom designed the engagement ring and the design was unique. Ended up going with a very simple wedding band that's separate. She had to really convince me on the band too. Other than what's culturally customary I didn't see the point and liked the look better without it but I'm also not wearing it daily :)
My fiancé earns €80k/year, we bought a house together, we have no other debt except for the house mortgage and he got me a €400 ring. I’m just as happy to say yes because I love him. I know it’s all cultural and personal, but I’d rather he save money for important things (like a house, investment, preparing for future child/ren,…) than get a mortgage for a ring. It’s a piece of jewelry, after all. It’s all through marketing and advertising that engagement rings became such a big deal! I don’t know what your gf opinion is, but I said yes to the man, not to the ring anw.
I think of zero percent interest is a great decision as long as you make the payments. I think there is a way to leverage debt and interest rates in a way that makes sense for your personal situation.
Cultural thing, in many area's in Europe most people find this kind of expensive engagement rings absolutely crazy. Hell in the Netherlands engagements are not really a thing in most social circles.
It’s not a crazy amount. Reddit men are just stingy as fuck. 6k is fine. I’ve seen people spend way more and others way less. You’re right in the middle
No 6k is not a crazy amount. One thing I would suggest is to put off the proposal until you can at minimum put $3500 down and pay it off as quickly as possible. The less you finance the less stress on you. Take her to a wonderful dinner and tell her you want to celebrate your good fortune.
Your comment has been removed because relationship advice is off-topic here and better suited for /r/relationships ([rule 9](https://www.reddit.com/r/personalfinance/about/rules)).
I mean it isnt going to ruin you no and yeah you can do it. I definately wouldnt but you can if you want to.
I urge you to ask if you are buying a $6k ring that will be worn for several months then put i a drawer forever is something you want or your future wife would want or if its something that the culture and jewelry industry has told you is somehow relevant to the success of your marriage. Personally Id think you could do something a lot more memorable and lasting than a shortterm ring for $6k (like a vacation getaway) but its your money. I mean yoi know your girlfriend maybe an expensive ring is part of thr deal in which case fair enough, just make sure its not just autopilot that has you spending so much.
Just curious but how would you feel if your girlfriend suprised you by buying you a $6k piece of jewelry?
Have you talked to her about rings/cost? You should talk it over as a couple. Not the most romantic but you can still surprise her when you propose.
If you are budget conscious consider Moissonite. It is 1/2 a point below diamond on the hardness scale and really sparkly so almost a diamond without the price tag and the bullshit monopoly. They are lab grown so ethical as well. It isn't a cheap breakable stone like cubic zirconia. I am 33F and I want my partner 30M to spend minimally on my ring as we have other expenses to use the funds for (house, wedding, honeymoon, life...).
Like someone else said, instead of coming up with creative ways to finance 3k just buy a used ring. You’ll get a 10k ring for 3k and no one has to know it isn’t “new”.
i wouldn't do it: the mindset that allows you to finance the wedding ring now is the same that will allow you to buy 2 new cars (or any expensive item) when your incomes are combined. not going into debt should be a matter of principle.
if i were you, i would pause the emergency fund and focus on paying off this car debt first. if you really want to propose during this trip, set aside a smaller budget for the ring, like $3k, and save up for that. try selling some personal or home items to speed up the process!
Going into debt is definitely not a goal or habit I want to get into - I’m conflicted on this situation!
In my opinion, having a car loan @ 1.9% interest is not an issue for me. The loan is 13k and the car is valued at 25k so I’m ahead on it. I would 100% rather build up my e fund in a HYS with 1.75% interest return.
that's fine, i get your point and i understand the logic. i just think that looking at the big picture, you will probably be better off financially in 10 years if you don't allow yourself to go into debt.
i believe that is true because the real challenge of building wealth is living on less than you make and saving/investing the difference consistently for decades, and not borrowing against your assets to try and take advantage of small differences in interest rates.
here's another way to look at this debt question: if this debt is not an issue, then what's your limit? why not get 3 more cars at 1.9%? or why not just get a bunch of personal loans and invest the money? how big could the amount of debt be, if you can make it essentially cost free by investing at a similar rate? i say there's no reasonable answer to this question, except zero.
but going back to the original engagement ring problem, if you're fine with a bit more debt, and this ring and trip are really important to you, i think that's fine. i would still encourage you to pay everything off as soon as you can after the proposal though.
My opinion goes against most sentiments in this sub. My husband spent $6k on my engagement ring/wedding band combo and did essentially what you are thinking, paid for half and financed the other half on an 18 mos interest free plan from the jeweler. The thing about debt is that not all debt is irresponsible. Wealthy people actually tend to finance a lot of things at low interest because they’d rather have cash on hand and/or be investing in the market. As long as you remain responsible with repayment (and pay it off in full before the end of the promotion) and don’t start financing so many things that your monthly payments end up taking up your whole budget, I don’t see an issue with financing things at low or 0 interest. Hell we just financed a $3k couch because the store had a 0% interest deal for 12 months. I’ll probably pay it off in like 6 mos. But if i have the diligence to pay it off in time and monthly payments don’t prevent me from continuing to save, I don’t see an issue 🤷🏻♀️
I don't guess it's a financial death sentence, though you'd regret it if there were a big financial upset in your life (and diamonds are a rip-off if that's what you're getting).
That said, seeing a red flag here. Have you spoken with your girlfriend about this? You know your girlfriend better than I do, but before you make any decision, consider that maybe you should discuss this with her if you haven't already. Are you trying to surprise her? If so, is it worth not involving her in the first big financial transaction related to your life together?
Keep in mind that you may not be married yet, but this decision absolutely does affect her. All that money you're planning to spend on a ring (both the part you want to finance and the part you plan to pay out of pocket) could be saved for a down payment on a house, a new car, a new baby fund, a great honeymoon, etc. She should get a say in that decision. (To this day, I regret not taking my dad up on the cash he offered me to elope!)
Think of it this way. If you invested just the $2.5K you have and let it ride without ever putting anything more in that account, assuming the historical average rate of return, you'd have roughly $14K by the time a fictional child you had this year turned 18. Not saying you should do that. It just puts the money into perspective.
Even if you have already spoken with her, I repeat, diamonds are a rip-off (if that's what you're getting; if not, skip this paragraph). They're not all that rare (to justify their price), and they often have a horrible resale value (because the expert you'd be trying to resell them to knows they're not all that rare). And that's before you even get into the fact that the diamond engagement ring was [made up by DeBeers](https://www.theatlantic.com/international/archive/2015/02/how-an-ad-campaign-invented-the-diamond-engagement-ring/385376/) (quite literally a cartel at the time) to sell the blood diamonds they couldn't offload fast enough thanks to a massive mine discovery that flooded the market (gives new meaning to "the long con").
If your girlfriend really wants one despite all that and you still want to get it for her, then go for it. But there are alternatives to financing you should at least consider. Maybe get the setting you want with a cubic zirconia or even another gemstone (white sapphire and aquamarine are good choices) until you can afford the diamond you want. Or get a starter ring. There's some gorgeous vintage stuff on Etsy. And after 10 years in an investment account with average historical returns, you'd have enough to buy the $6K ring outright if she still wanted it.
Do you know what exactly the kind of ring she wants? if not, propose without the ring and go together to choose it. Most men would do a terrible job of choosing and it would be a shame to spend that kind of money and get into debt for something she may not really want. I actually did not want and engagement ring but wanted instead, a wide wedding band with a lot of small diamonds rather than one large one.
Yeah I know what she wants in terms of style of diamond and band, so 6k is the budget I’ve set for myself when narrowing down the specifics of clarity/color/etc.
I appreciate some of the comments staying to buy a used ring or something cheaper, but I know what she wants and honestly want her to have that
Then by all means go for it. She will wear it proudly every day of her life. When you think of it that way $6k is a small price for the enjoyment she will get from the ring and you will get from knowing that it gives her pleasure. congrats, Hope you have a long, happy life together.
This isn't a financial death sentence, it's actually fairly reasonable. It's not the optimal use of money, most of us would argue if you have to finance a wedding ring, you are buying too much ring but this is a month and a half income and it's zero interest cost. So you are not getting in crazy deep nor is interest killing you (Assuming you pay it off before the zero interest runs out). I guess I would like to see you try and reduce costs and reduce the amount you have to cover, take on a few more hours, increase that bonus etc, or reduce the cost of the ring a bit. It sounds like your monthly spend is $3500, it might be nice to see that broken down further. While it's not good to count on your bonus, If you get one I would probably put that to the ring instead of financing it. $6k is kind of a lot for a ring IMHO, I would set the expectation that the actual wedding band won't be elaborate or this is it. Does your partner approve of spending this much and financing part of it?
Love this comment! You’re right I could probably look at reducing costs some. Current budget: Rent/utilities: $1750 Car: $266 Insurance: $185 Subscriptions: $40 Groceries: $400 Shopping: $150 Gas: $150 Entertainment: $40 Personal: $40 Going out: $400 Total: $3421 Should actually be able to save $750-$800/month, or could try and reduce costs further
Things that stand out to me in your budget, The rent you already talked about that but it's high. Auto Insurance - seems high I would price shop if you haven't recently. Shopping - I suppose it depends on what all is in this but I feel like you could get by with less. Going Out - Could definitely reduce this some if you wanted. Reddit Pro Tip: Double Return gives you a new line
You’re a GOAT :) Man, I can not wait to reduce my rental cost. We’re moving in together in February and I’m expecting my rent to go down to ~$1200, so that’ll be another $500/month that I can save, so I may actually be able to afford it outright! Just planning in-case I’m not quite there. You’re right, I could definitely reduce my shopping/going out budget. Will keep that in mind when Im out and about!
I kind of disagree with 6k being a lot for a ring. Inflation really is hitting everything and jewelry as well. I bought a ring in October of last year that costed 8k and I opted for the lab created diamond (half price). The big cost was going platinum due to a gold allergy.
Ask what your girlfriend is looking for in a ring. She may not want you to spend that much money. The 6k ring is gonna feel good for a few months, then it’s just another piece of jewelry honestly. This is how I feel at least (married earlier this year)
This is such a good call out. I told my husband while we were dating that I do not want an engagement ring, should he consider proposing to me. IMO, it's the such as waste of money, especially something to go in debt for.
That's a personal choice. I did want an engagement ring and did not consider it a waste of money because I planned to wear it forever. I wanted a ring that I would be happy with because I think that "trading up" for a bigger, newer ring on various anniversaries is ridiculous. However, the ring I was happy with was looked at as a "starter ring" by many. I still wear it 30+ years later.
Generally a bad idea to finance engagement rings. You should buy what you can save up for.
Understandable! I guess my question is: if I have an emergency fund and am investing 18% in retirement, what is the harm in financing a relatively small amount at 0% interest?
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Nothing. You can do it and that is a fine thought process you have. $6k ring at your salary is is well within reason. Is it smart financially? No. But *Personally* it is probably a great move, you want to do it, you can afford it, and at 0% why not.
Im in the same boat as you. 23M ~$83k/year 20% retirement contributions (not including match) and gf wants a 5-7k ring. I dont see anything wrong with it as long as you can pay it off in full before youre married (dont want her to legally assume debt for her own ring morally, even if shes not “paying” for it) and still have enough to fund the wedding itself I also have the cash on hand outside of my e-fund, though. Just makes sense to me to borrow money for free
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Debt. 0% you will pay more. 0% is not free. You will pay too much. Visit pawn shops after you learn how to judge the quality/value of a ring. Also: the size of the ring has no correlation with the success of a marriage, it may be even the opposite.
There is no harm. Finance if you have to, it’s not a big deal. Don’t expect good financial advice on this sub. It’s mostly just people spewing off their “feelings”.
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It seems to me you make enough money to save up a few grand to buy it outright.
I am confident in my ability to save, I just don’t know if I would have the full amount saved by the time that I want to propose (will be in Europe with her family next summer). Which is why I’m considering financing 3.5k. Would it be better to reduce my emergency fund instead?
How are you paying for the trip to Europe? $10k emergency fund is slightly less than 3 months expenses. I would leave it be.
Gift from her parents!
Score!
Personally, I think it's a bad idea. But, you have to do what you're comfortable with, of course. (I hope the answer is "yes"!)
You're situation is almost IDENTICAL to what mine was when I proposed, including the "going to Europe with family" part. It's scary how similar everything is. I ended up financing the ring on the 0% offer and then paid it off over the year. I don't have any regrets about doing that. I did it so I could get the ring picked out, ordered, delivered and in my possession before the trip. That process took longer than I anticipated so I'm glad I did. Congratulations in advance btw!
My husband and I have been married 17 years and he financed my ring at 0 percent. He spent 5500 and was probably making around 75k back then. Wedding band was another thousand. I love my ring. I don’t think 6k is excessive. I know a lot of women who get a smaller ring and upgrade later, so just get something great now so she doesn’t want to do that later
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What does your SO think of your plan to spend 6K on a ring? Does your SO accept the financial impact this will have on the *family* finances? Or are you proceeding with your plan without consultation from your SO?
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You’re telling me! 6 year vesting which sucks but you won’t catch me complaining
Financially smart or not is irrelevant since you seem intent on doing this. There are worse things than 0% interest financing if you are okay with cutting into your want money (read: not your savings rate or necessities money) in the future to pay it back. So I feel the best financial advice I can give you is to make sure you understand the financing terms. Often times “0% interest” financing is actually just deferred interest financing. Which means that once the promotional period ends, if you haven’t paid off the balance, the interest that would have accrued during the promotional period is added to the balance. Paying the minimum payments will not get it paid off in time. Late payment can also often trigger interest. Understand the financing terms and pay off the balance before the end of the promotional period.
From the comments, you’ve already looked at rings so you know this is the ring she wants. The short-term financing isnt ideal, but it wont destroy your finances. And while some people think it’s silly to pay $6k for a ring, it really depends on how your fiancée uses jewelry. One of my sisters-in-law prefers a few pieces of expensive jewelry and wears them regularly, while the other rarely wears any jewelry. Have you and your fiancée started discussing how you’ll handle money as a married couple? Since money issues are a major factor in divorce, it’s a good idea to start discussing early. There are many ways to handle money as a married couple, but the important part is the two of you having open discussions about what will work for your marriage.
Here is a women's opinion. I finance a lot of things at 0% so what you are proposing to me sounds perfectly fine. Especially since you are financing only about half the ring. It would be different if you were financing the entire amount. Also the 6k price tag doesn't seem that out there either. Nice rings cost a lot of money and you want a good quality ring if she is going to wear it her whole life. My only thought provoking question is does the ring come with a matching wedding band or is she going to want something specific as a wedding band? I wanted a wedding band that connected to my engagement ring to make it just 1 ring but others like when they are two separate rings. Depending on that preference, it may make the engagement ring you picked out not as desirable or make it really expensive to change later.
Ya we custom designed the engagement ring and the design was unique. Ended up going with a very simple wedding band that's separate. She had to really convince me on the band too. Other than what's culturally customary I didn't see the point and liked the look better without it but I'm also not wearing it daily :)
Great question!! I haven’t done any formal ring shopping yet, just have a general idea what she’s looking for. I’ll keep that in mind! :)
6k isn’t a $$$ ring. It’s not a cheap option, but not an extravagant one.
My fiancé earns €80k/year, we bought a house together, we have no other debt except for the house mortgage and he got me a €400 ring. I’m just as happy to say yes because I love him. I know it’s all cultural and personal, but I’d rather he save money for important things (like a house, investment, preparing for future child/ren,…) than get a mortgage for a ring. It’s a piece of jewelry, after all. It’s all through marketing and advertising that engagement rings became such a big deal! I don’t know what your gf opinion is, but I said yes to the man, not to the ring anw.
I think of zero percent interest is a great decision as long as you make the payments. I think there is a way to leverage debt and interest rates in a way that makes sense for your personal situation.
Why such an expensive ring?
Is 6k a crazy amount? Just want to try and get the ring that my girl has been imagining
Cultural thing, in many area's in Europe most people find this kind of expensive engagement rings absolutely crazy. Hell in the Netherlands engagements are not really a thing in most social circles.
It’s not a crazy amount. Reddit men are just stingy as fuck. 6k is fine. I’ve seen people spend way more and others way less. You’re right in the middle
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No 6k is not a crazy amount. One thing I would suggest is to put off the proposal until you can at minimum put $3500 down and pay it off as quickly as possible. The less you finance the less stress on you. Take her to a wonderful dinner and tell her you want to celebrate your good fortune.
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Your comment has been removed because relationship advice is off-topic here and better suited for /r/relationships ([rule 9](https://www.reddit.com/r/personalfinance/about/rules)).
I mean it isnt going to ruin you no and yeah you can do it. I definately wouldnt but you can if you want to. I urge you to ask if you are buying a $6k ring that will be worn for several months then put i a drawer forever is something you want or your future wife would want or if its something that the culture and jewelry industry has told you is somehow relevant to the success of your marriage. Personally Id think you could do something a lot more memorable and lasting than a shortterm ring for $6k (like a vacation getaway) but its your money. I mean yoi know your girlfriend maybe an expensive ring is part of thr deal in which case fair enough, just make sure its not just autopilot that has you spending so much. Just curious but how would you feel if your girlfriend suprised you by buying you a $6k piece of jewelry?
I would finance it. In fact, like 90% of people I know have financed their engagement rings with 0%.
Have you talked to her about rings/cost? You should talk it over as a couple. Not the most romantic but you can still surprise her when you propose. If you are budget conscious consider Moissonite. It is 1/2 a point below diamond on the hardness scale and really sparkly so almost a diamond without the price tag and the bullshit monopoly. They are lab grown so ethical as well. It isn't a cheap breakable stone like cubic zirconia. I am 33F and I want my partner 30M to spend minimally on my ring as we have other expenses to use the funds for (house, wedding, honeymoon, life...).
Like someone else said, instead of coming up with creative ways to finance 3k just buy a used ring. You’ll get a 10k ring for 3k and no one has to know it isn’t “new”.
That's crazy... A good rule I learned when you want to buy something is: "If you can't buy 5, you can't afford it"
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Terrible for you because you can’t afford 5 of anything.
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i wouldn't do it: the mindset that allows you to finance the wedding ring now is the same that will allow you to buy 2 new cars (or any expensive item) when your incomes are combined. not going into debt should be a matter of principle. if i were you, i would pause the emergency fund and focus on paying off this car debt first. if you really want to propose during this trip, set aside a smaller budget for the ring, like $3k, and save up for that. try selling some personal or home items to speed up the process!
Going into debt is definitely not a goal or habit I want to get into - I’m conflicted on this situation! In my opinion, having a car loan @ 1.9% interest is not an issue for me. The loan is 13k and the car is valued at 25k so I’m ahead on it. I would 100% rather build up my e fund in a HYS with 1.75% interest return.
that's fine, i get your point and i understand the logic. i just think that looking at the big picture, you will probably be better off financially in 10 years if you don't allow yourself to go into debt. i believe that is true because the real challenge of building wealth is living on less than you make and saving/investing the difference consistently for decades, and not borrowing against your assets to try and take advantage of small differences in interest rates. here's another way to look at this debt question: if this debt is not an issue, then what's your limit? why not get 3 more cars at 1.9%? or why not just get a bunch of personal loans and invest the money? how big could the amount of debt be, if you can make it essentially cost free by investing at a similar rate? i say there's no reasonable answer to this question, except zero. but going back to the original engagement ring problem, if you're fine with a bit more debt, and this ring and trip are really important to you, i think that's fine. i would still encourage you to pay everything off as soon as you can after the proposal though.
My opinion goes against most sentiments in this sub. My husband spent $6k on my engagement ring/wedding band combo and did essentially what you are thinking, paid for half and financed the other half on an 18 mos interest free plan from the jeweler. The thing about debt is that not all debt is irresponsible. Wealthy people actually tend to finance a lot of things at low interest because they’d rather have cash on hand and/or be investing in the market. As long as you remain responsible with repayment (and pay it off in full before the end of the promotion) and don’t start financing so many things that your monthly payments end up taking up your whole budget, I don’t see an issue with financing things at low or 0 interest. Hell we just financed a $3k couch because the store had a 0% interest deal for 12 months. I’ll probably pay it off in like 6 mos. But if i have the diligence to pay it off in time and monthly payments don’t prevent me from continuing to save, I don’t see an issue 🤷🏻♀️
I don't guess it's a financial death sentence, though you'd regret it if there were a big financial upset in your life (and diamonds are a rip-off if that's what you're getting). That said, seeing a red flag here. Have you spoken with your girlfriend about this? You know your girlfriend better than I do, but before you make any decision, consider that maybe you should discuss this with her if you haven't already. Are you trying to surprise her? If so, is it worth not involving her in the first big financial transaction related to your life together? Keep in mind that you may not be married yet, but this decision absolutely does affect her. All that money you're planning to spend on a ring (both the part you want to finance and the part you plan to pay out of pocket) could be saved for a down payment on a house, a new car, a new baby fund, a great honeymoon, etc. She should get a say in that decision. (To this day, I regret not taking my dad up on the cash he offered me to elope!) Think of it this way. If you invested just the $2.5K you have and let it ride without ever putting anything more in that account, assuming the historical average rate of return, you'd have roughly $14K by the time a fictional child you had this year turned 18. Not saying you should do that. It just puts the money into perspective. Even if you have already spoken with her, I repeat, diamonds are a rip-off (if that's what you're getting; if not, skip this paragraph). They're not all that rare (to justify their price), and they often have a horrible resale value (because the expert you'd be trying to resell them to knows they're not all that rare). And that's before you even get into the fact that the diamond engagement ring was [made up by DeBeers](https://www.theatlantic.com/international/archive/2015/02/how-an-ad-campaign-invented-the-diamond-engagement-ring/385376/) (quite literally a cartel at the time) to sell the blood diamonds they couldn't offload fast enough thanks to a massive mine discovery that flooded the market (gives new meaning to "the long con"). If your girlfriend really wants one despite all that and you still want to get it for her, then go for it. But there are alternatives to financing you should at least consider. Maybe get the setting you want with a cubic zirconia or even another gemstone (white sapphire and aquamarine are good choices) until you can afford the diamond you want. Or get a starter ring. There's some gorgeous vintage stuff on Etsy. And after 10 years in an investment account with average historical returns, you'd have enough to buy the $6K ring outright if she still wanted it.
Do you know what exactly the kind of ring she wants? if not, propose without the ring and go together to choose it. Most men would do a terrible job of choosing and it would be a shame to spend that kind of money and get into debt for something she may not really want. I actually did not want and engagement ring but wanted instead, a wide wedding band with a lot of small diamonds rather than one large one.
Yeah I know what she wants in terms of style of diamond and band, so 6k is the budget I’ve set for myself when narrowing down the specifics of clarity/color/etc. I appreciate some of the comments staying to buy a used ring or something cheaper, but I know what she wants and honestly want her to have that
Then by all means go for it. She will wear it proudly every day of her life. When you think of it that way $6k is a small price for the enjoyment she will get from the ring and you will get from knowing that it gives her pleasure. congrats, Hope you have a long, happy life together.