“Happy Wife, Happy Life”, we’ve all heard this famously antiquated marriage advice before. It’s been around for years and whoever said it first definitely knows what he or she is talking about. But a new staggering study by GoBankingRates claims that “happy life” all starts for under $1,000 on an engagement ring. One-third of Americans think you should spend less that $1,000 on an engagement ring and 55% say under $3,000 is okay. What?! How can that be? What ever happened to two months pay? Well, apparently that standard is long gone.
The study by GoBankingRates surveyed 5,000 American adults, men and women, who were asked what was an appropriate amount to spend on an engagement ring. What’s even more surprising was that men and women were practically on the same page...that’s a first :)
The older, the wiser
The results of the study also show that the older the respondent, the more likely they will spend less on an engagement ring. 49% of 18-24-year-olds said spending up to $3,000 is fine compared to $69% of seniors. On the flip side, 27% of 18-24-year-olds said spending two months salary or money is no object compared to only 17% of seniors. These results among age groups aren’t very surprising honestly. People in their 40s, 50s, and 60s put residual income towards retirement or their kids college tuition, not the material item.
Explaining spending on engagement rings in 2016
The following are common reasons why people say that spending under $1,000 or $3,000 is just fine. Do you agree?
The Great Recession
The economic disaster of 2008-2009 caused millions of American’s to think before they spend, reallocate budgets to more important items, save where they can, and even downsize their lifestyles. The effects of the Great Recession still are present today in every corner of the country and even though things have gotten much better, we still are long ways away from a fully stable and self-sufficient economy. What budgets get trimmed first? Material items which engagement rings fall into.
Young adults have a ton of student loan debt these days due to rising costs in a college education and survey of former college students reported that 23% are unable to make payments on their loans, 43% entered deferment, and just 8% refinanced their loans. This same group also reported that they likely won't be able to pay off their student loans until they are about 41 years old. Other groups of current students reported they will pay off their loans around the age of 33. Couple that with the average age for getting engaged, 29 for men and 26 for women, we can see that spending two months pay on an engagement ring really isn’t practical anymore.
$700 on an iPhone and $100 per month in service fees...sign us up! $10 per month on Dropbox to save all your music and movies...it goes on and on. The truth is that every generation before millennials didn’t have these absurd technology costs that are needed to live a modern life in the age of the internet, apps, Instagram, email, mobile payments, etc. They basically had a household TV and a landline bill outside of the normal monthly bills like heating and A/C. Young adults also spend more than ever on nice clothes and fancy cars and rack up some serious credit card bills doing do. There’s something about just handing over a piece of plastic instead of cash-money that makes it seem cheaper when in fact, it makes it much more expensive because of interest rates and late penalties not to mention ruined credit scores. Millennials are also drawn to fun and exciting cities right after college. After all, who wants to live back at home after 4 years on the party circuit? These cities are money pits with sky-high rents and expensive dining options.
How much is two months pay anyway?
Based on recent data from the Bureau of Labor Statistics, two months’ earnings would equal about $6,400, on average. That means one months salary is equivalent to just $3,200 or $38,400 annually before taxes. But this is where it gets even more interesting and alarming. For most U.S. workers, real wages — that is, after inflation is taken into account — have been flat or even falling for decades, regardless of whether the economy has been adding or subtracting jobs. The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.
Let’s blow it all on the wedding or honeymoon instead!
Yep, people are electing to spend less on engagement rings and more on the wedding or a sweet honeymoon. After all, you only get married once (to that person) but you can always upgrade to a bigger ring down the road.
So what should you do?
Spending too much on a ring can really create problems down the road. And don’t forget, you both have the same problems now as a married couple or if you live together as an engaged couple. Do you really want to ask your fiance for some cash to pay your phone bill because you overspent on her ring? Do you want to tell her that you missed your car or school loan payments? If you have to completely rework your entire annual budget and already have debt, you should think twice about your price point. People often equate “happy wife, happy life” to big one-time purchases such as an engagement ring or staging the perfect way to propose. In reality, happiness is a lifelong commitment, complete with many memories of all shapes, sizes, and prices. If under $1,000 is right for you at the moment, that’s more important than overspending and hampering both of your lives. She’ll respect you more as being a good decision maker, instead of being impulsive or blindly optimistic. Do you still want to get her that huge and beautiful ring? The Diamond Alternatives’ popularity continue to grow every. Still need a little help paying for her dream ring? FuturePay is a payment option that lets people buy now and pay later – without a credit card. By putting purchases on a FuturePay tab, your customers can check out in one easy, secure step.