Source
r/personalfinance•
AMAathon

OK, another engagement ring question. Am I being stupid?

Other

I’ll get right to it. I’ve been with my gf for a long, long time now and we’re way overdue to get engaged.

We’ve talked a lot about it and she introduced me to a jeweler she really likes. So i went to her, and I’m getting a custom ring that looks exactly like the kind my gf has wanted for a while.

Now, it’s $7000. Which is a lot. I know.

However, I’m in my thirties and make fairly decent money. Problem is I’m freelance, so while it’s been mostly consistent there is always the chance for a dry spell.

I have some student debt but I’ve been chipping away at it and i should be done with it in 1-2 years. Maybe even less.

I have no credit card debt and a decent credit score.

So, all of that makes me feel mostly OK. Except for one thing:

Being freelance, i don’t have any retirement benefits through work. I’m working on opening up some kind of retirement account by the end of next week (either a 401k individual or a SEP IRA), but as of now most of my money is just a regular savings account and a business savings account. Granted, i have more than $150,000 in the bank. But still, i haven’t been exactly smart with putting it in the right accounts.

So that last point is what’s making me nervous. It’s like i can afford the ring (i have the money and can pay for it in full right away), so my initial thinking was, “It’s a lot but i can handle it.” Now, I’m getting all worried about not being set up for after i pay for it.

This is all a long way of asking, can i actually afford what i thought i could afford? I know this sub in general recommends going the cheapest route possible, but I don’t exactly want to go that far. However, i want to make sure im not totally financially screwing myself here.

Posted Nov 22, 2017, 9:58 PM UTC

141
wijwijwij•

You have 150K in the bank, and you're talking about a 7K expense. It sounds like this is not changing the picture very much.

16
AMAathonOP•

It’s still the biggest purchase I’ve ever made. And like i said, i started to worry when i really thought about how i haven’t been smart about the way I’ve been saving. That money is just sitting there and not exactly working for me. So i guess a sub question to my question was “is it smart to spend this much without setting all that up first?”

I plan to have it set up, and very soon, but i don’t know. It’s weighing on me. Again, probably because it is such a big purchase.

1
wijwijwij•

I'm not sure the timing matters. Buy the ring and also make adjustments to how you're handling your savings. It sounds like the most important step you've already taken: figuring out what kind of ring she will treasure forever.

If you want to get your savings into investments, you can do that by increasing your contributions to retirement plan at work and pulling some spending from your stash to offset the lower take-home in paychecks.

You can also move money from bank savings account into CDs, or into mutual funds at a brokerage taxable account. Figuring out an allocation where you can "set it and forget it" (except for perhaps once a year review) should not take much effort.

3
prettyplum32•

The nice thing here is that this purchase isn’t going to kill you. You have a LOT saved, I mean this represents about 4.5% of your savings? So yea, it’s a lot of money, absolutely, but you can calm down a little in that you can buy this and not be in the poor house next month or even next year, at least not directly relating to this purchase.

I think the bigger and much more important question here - is it the right purchase to make? Would the money serve you (both) better somewhere else? This brings up a lot of general questions that you and your soon to be wife need to tackle together. Personally I’d be horrified at a 7k engagement ring. My ring is beautiful, was still quite expensive, custom made, no diamonds, and I wear it once a month AT MOST. I think it was a ridiculous purchase, I didn’t want a ring at all, but my husband wanted to do the ring thing. I think that the money could have been better served in other ways, but he didn’t, so I compromised for him. These big questions you need to tackle together, that will probably soothe a lot of your anxiety. Also, getting a plan together for your financial life. Getting married is a perfect time to do that. Having a plan soothes my money anxieties a lot.

2
uh_no_•

can you buy a cheaper stone and get it replaced later if and when you feel more comfortable?

Can you get a nice stone in a cheaper setting and consider the same?

can you afford it? sure. calculate the retirement-time value of that 7k and figure out how much longer you'd have to work. Whether you make that tradeoff is up to you, and if you don't, i'd hope your soon to be fiancee understands your thinking.

1
AMAathonOP•

Well, this is always an uncomfortable thing to talk about but with my freelance rate i can make that much back in less than a month. It’s just, as noted, there can be dry spells. And I’m not set up for retirement quite yet.

1
Devilsteeth•

Just because you can doesn't mean you should. That is a LOT to spend on an a engagement ring! Personally, I'd think spending it on your honeymoon or setting you guys up for a good life would be better spent. I can't imagine what she wants to spend on the wedding if her ring is that much. Everyone has their own preference. I wouldn't spend this much on a ring. Sure, you can.

1
AMAathonOP•

The wedding will most likely be free since we have a family location already.

She certainly isn’t telling me to spend that much. But it just kind of happened that way.

3
PaxilonHydrochlorate•

However, i want to make sure im not totally financially screwing myself here.

I mean you said

It’s like i can afford the ring. (i have the money and can pay for it in full right away)

I'm going to take your word for it: you can afford it. I don't understand why you want a ring that costs more than a decent used car, but you haven't talked about your income or expenses.

1
AMAathonOP•

My income is roughly 100k, but of course that’s if i work most of the year (which usually i do). With freelance it’s difficult to say though. (If it means anything my gf also has a good job and our combined income is 220 or so. Of course, this isn’t coming out of her pocket...)

Expenses: I rent, don’t own or need a car but pay for city transportation, have the typical smartphone/cable/internet bills. And i have student loans but as i said those are dwindling. We’re also adopting a dog, which as you can imagine is also a difficult expense to predict but fingers crossed he or she remains healthy...

1
PaxilonHydrochlorate•

You can afford it. I think you're silly to buy it, but it's not the wrong choice. Make sure you're putting 15% into retirement and 5% of your income into short-term savings.

https://www.fidelity.com/mymoney/50155-guide-simple-approach-budgeting

2
AMAathonOP•

Wait, one thing. Another part of being freelance is I’m 1099ing everything tax wise. I normally do my quarterly payments and have a good accountant so haven’t been too screwed in that sense but that is another expense if it means anything.

1
PaxilonHydrochlorate•

Suppose you have the worst next year of your life and no freelance work came in. Would you still be able to get by, or find a job to get by?

does buying this ring affect that answer?

1
Pantone877•

I would not feel comfortable leaving the house wearing a $7,000 piece of jewelry. Just thinking about it gives me slight anxiety. Have you discussed this at all with your girlfriend?

It it were me, with my boyfriend, I'd sit down and have a financials talk. Is that the best use of our money? Because it's "our money" now. Could we be using that kind of cash to buy a home together? Go on a dream honeymoon together? Make our retirement plans a reality instead of a scramble?

Would I be just as happy with a ring 1/4 the price if it meant buying our first home together? Would it mean taking a two-week honeymoon to the south of France instead of Florida?

1
vettewiz•

Most people insure their rings, granted that comes at a cost.

2
AMAathonOP•

It will be insured, yes.

1
vettewiz•

From my perspective, do it. Don’t regret my wife’s $15k ring, not that she really knows what it costs.

2
Pantone877•

It's not about the loss of money and more the idea of someone trying to mug me for it.

0
[deleted]•

[deleted]

1
vettewiz•

Unless you’re in broad daylight, looking very closely, you can barely tell the difference between a $2000 ring and a $20000 ring. I don’t think the average mugger will care.

1
Pantone877•

A $7000 engagement ring is pretty flashy. I would not feel comfortable with that at all. I have a two carat gemstone ring that's $2,000 and I barely wear it out of the house because of that.

1
AMAathonOP•

All good points. We’ve talked about this to some extent, but so as to not ruin any surprises i haven’t mentioned any specific dollar amount.

My worry then would be having to start over looking, and i kinda wanted to get this going ASAP. I mentioned in another comment that the venue should be free, but unfortunately it’s time sensitive (an old family vacation home that my family is trying to sell).

1
Pantone877•

I would talk with your jeweler about re-designing the ring so it's the same style as the one she had in mind but half the cost. Or third. Tell them you love the original design but you can't afford that right now. If it's two carats, bring it down to one. If there's smaller diamonds around it, make those white sapphires. Or eliminate them. Look into lab-created diamonds as opposed to natural ones. White gold instead of platinum.

1
AMAathonOP•

Yeah. Something to consider. Again, i wanted to get this done ASAP but maybe.

1
Alterageous•

If you make $150k a year and the ring she wants is $7k you're doing just fine and you really don't need to downgrade because some people on the internet are horrified by the "waste of money."

3
gyaradostwister•

At 30, you should have a 6 month emergency fund and your salary saved in retirement. Especially as a freelancer, you know how important savings is for a dry spell. This post is hard to follow and I’m not clear if you are there yet. Sounds like you are still working on student loans.

1
AMAathonOP•

Apologies. It’s no excuse, but I’m in a creative field and finances and all this have never been my strong suit. So i might not be explaining things well.

Maybe this will clear things up:

I essentially do have a six month emergency fund. I’ve always been good about that because i dread that dry spell.

I also have the equivalent of my one year salary in the bank. However, none of it is in a proper retirement account. I would like to open a 401k individual or SEP IRA next week. I won’t be able to put all my money in there, but i need to start somewhere.

I’m working on student loans, but they are in the sub $200 a month range, and I’m getting close to paying them off.

Hopefully that is a little clearer picture?

1
[deleted]•

[deleted]

1
AMAathonOP•

The hesitation?

Well, for one, as confident as i felt picking it out, this sudden dread she won’t like it has its grip on me now. As we all know, there’s kind of no going back with these things.

For two, i kind of did things backwards and found the ring first and then came here and searched around. Seeing people scoff at others for spending half what I’m spending also made me very anxious. I live in a big city and have heard of people spending $12-25000 on rings. I thought i was going cheap. Poked around in other threads and turns out i was wrong...

Three, i mentioned this elsewhere but i feel utterly stupid about personal finance. I come here and read the advice and feel like “ok cool i sort of have the savings part right, but i never think about the future/retirement etc” and that also sends me into a tailspin.

TL;DR: I’m kind of an anxious person who constantly assumes the worst about the future.

2
ComingFromABaldMan•

With my wife we talked about what she wanted in a ring, she showed me examples, and we talked about how much money she would be comfortable spending on it together. I mean afterall once we got married my money would also be her money. So anything I splurged on for a ring would be coming out of a house, vacation, etc. budget. So even though I could afford a $4000 ring, she was happy getting one for $1500. And we can always upgrade the center diamond if we are comfortable doing so in the future. TLDR If you are both comfortable spending that amount (and it doesn't screw up your other financial plans) then don't feel bad.

1
joeyskoko12345•

I have the same thought; considering paying $12k for one at the moment. I can afford it but it still seems like a great deal of money.

1
yes_its_him•

If you have to ask...

It's your money. Is this what you want to do with the necessary $7000?

I spent about that on a similar purchase for the world's best wife, but that was my decision, not yours. I could easily afford it, of course.

1
AMAathonOP•

Haha. Just wrote in another comment that when i first heard price i thought, “Well that’s a lot but not too crazy.”

Then i come to this sub and saw quite a few threads of people shocked that someone would pay even half what I’m paying. It got into my head and i started freaking out.

I want her to have this ring and i want her to be happy with it, yes. In some ideal world where rings and ceremonies didn’t matter? Sure, in that case i would rather spend it on something else.

1
Alterageous•

You've got $150k in cash. She has to wear it forever.

If it's what she wants, then just buy it and leave the transaction with $143k and a ring she likes. You won't be destitute.

The advice of "don't spend $3000!!" Is usually given to someone with a $40k a year job and a $22,000 car loan.

You're fine and it's not that much money in the grand scheme.

3
ol3chka•

Remember, there isn’t one way to live life and one way to spend money. For some people, a once in a lifetime piece of jewelry means you should spend more than you would on a nice vacation, since the ring is a forever thing. For others, tangible objects just aren’t very important. A key question here is what would make your future fiancée happy to see on her hand every day? Once you have that in mind, can you comfortably afford it? Sounds like the answer to both of these questions for you is yes with this ring you’ve picked out. Don’t worry too much about what random people on the internet prioritize.

1
ComradeGibbon•

Now, it’s $7000. Which is a lot. I know.

Shifty eyes.... buying that is the equivalent of taking $5,000 in cash and setting it on fire.

Buy a nice ring for a few hundred and use the rest to take your girl somewhere nice and warm this time of year.

1
AndyWarhola1984•

If I had the choice of a one time holiday, or a ring that i would look at for the next 50 odd years every day, I know what id choose.

I mean, if you stated married for 50 years that ring will cost $140 a per year of marriage.

2