Valentine’s Day is just around the corner, and many lovestruck Brits are gearing up to propose on the most romantic day of the year. As much as this can be exciting, it’s easy to get stressed by the financial implications of the whole process.
Popping the question can be a big financial commitment, so it is important to know how much you can afford to spend, before you splash out on your dream engagement ring. To help Brits decide, experts at money.co.uk have put together some handy tips on how to make the right decisions when buying your engagement ring.
James Andrews, Senior Personal Finance Expert at money.co.uk, said: “Before you make any major purchase you need to know how much you can reasonably afford. Engagement rings can easily reach prices of more than £10,000, so it’s essential you have a plan in place to manage this cost.
“There’s a popular saying that an engagement ring should cost three month’s salary, but you should never feel pressured to spend more than you can afford. For anyone planning on proposing, the most useful thing you can do is make a financial plan to see what you can save each month in order to cover the cost of the ring.
“It’s worth adding that if you’ve bought your ring in person at a jewellery store, you have no automatic right to return it in the event your proposal is turned down or your other half doesn’t agree with your choice of ring. You’re left at the mercy of the shop in question’s returns policy.
“You have more rights if you’ve bought it online, with rules allowing you to return it within 14 days, but if you’ve asked for a custom or personalised ring the shop might, yet again, be within its rights to say no.
“If you’re worried about the answer or your choice of stone and style, it might be wise to make your proposal first - possibly with a placeholder ring featuring a cubic zirconia stone or similar - and then go shopping for a ‘real’ ring later.
“Some people may be tempted to spread the cost of an engagement ring using a credit card with a 0% deal. However, you should only sign up for one if you are absolutely sure you can afford the repayments within the zero interest period.
“If you’re still paying off the card when the introductory period ends you will begin to accumulate interest which could add to your existing financial pressures, so make sure you’re not overextending yourself on your purchase.
“If you’re planning to, or have already purchased your ring, it’s important you consider taking out insurance on it. Engagement rings are often our most prized possession, so if they end up lost, stolen or damaged it can be a major heartbreak, as well as a huge financial loss.
“If you already have home contents insurance this may be able to cover your ring, however it’s worth remembering that there is typically a limit of around £1,500 for single items on most policies, so make sure to check the fine print to see if you’re covered.
“Most contents insurance policies do not cover items you regularly take out of the home, but you may be able to take our personal protection insurance as an add-on. This covers items you regularly take out of the home like your mobile phone or jewellery, so it’s worth checking to see if it’s available.
“Although some policies will also include cover abroad, there’s typically a number of countries that are exempt from cover. If you are planning on taking a honeymoon or proposing on holiday then you should double check your policy to make sure you’re covered.
“It’s also important that your insurance company has an up-to-date valuation of your ring. If it’s under-insured and your ring is lost or stolen, then your insurance payout may be a lot less than your ring is worth, meaning you’ll have to pay out of your own pocket for a replacement.
“If you want guidance on what you should be spending, you can try our engagement ring cost calculator. It will take into account your monthly salary, age range, relationship status and projected outgoings to help you decide a budget that works for you.”
“If you’re considering signing up for 0% interest free credit card, you can visit money.co.uk’s handy guide here: https://www.money.co.uk/credit-cards/0-purchases-credit-cards.htm”
James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments - picking up a series of awards for his journalism along the way.