I gotta great question for y’all today! One of our fellow readers is about to propose to his girlfriend (woohoo!) but he needs our help first in determining the best strategy to pay off the engagement ring. Should he use cash or credit, or some combination of both? How did YOU guys pick up the ring?
Here’s his question in more detail, along w/ my own opinions below. Let’s hook him up!
“I will be making an engagement ring purchase in the near future and expect to spend $10-15k on it (not looking for opinions on “How Much I Should Spend on a Ring,” but the amount spent does play a factor in my question).
I believe the best strategy is to save up the total cost in CASH, but make the purchase on a rewards or cash-back credit card and pay it off immediately. However, another point to consider is that many stores offer a discount (e.g. $500) if the purchase is made in cash.
So what do you think? Should I go with cash, or would I be able to utilize a rewards card to achieve maximum benefit (and if so, which one)? I’d like to get the most out of this giant one-time purchase so your help is greatly appreciated.”
Good one! And funny that you mention that you’re not looking for opinions on the price tag of that ring, haha… I’m sure you’ll get some at that range! ;) But keeping that part out of it, I think you’re smart in researching the options for sure.
I think it’s going to depend on *where* you get the ring, but for me I know that I didn’t want to drop a lot of cash all at once like that. My wife’s ring cost around $7,000 if I recall correctly, and I did something similar to what you mentioned up there. The store I picked it up at (Helzberg Diamonds), had a deal where you could plop it on their card and they’d give you 12 months of 0% interest. And since I knew I wanted to pay it all off within the year anyways, I jumped on it and just paid off the $500+ every month to keep my cash reserves nice and high still.
So my vote is to find a card that can float you for a while (or get the cash back rewards like you said), and use the cash you already have to slowly pay it off. While you make more over the year to keep it topped off :) I’m a big fan of having a lot of money on hand, even if you *could* pay it all off at once. Wherever you pick up the ring too, you’d be able to do this pretty easily.
Or, as you mentioned, you can see if any of theses stores offer a discount if you pay with cash up front. I’ve never heard of that myself, but I’m sure it’s out there. And you know what? You could STILL do the c/c method too, if you sign up for one on the side and then cut yourself a check to pay the diamond store. You’d get your $500 cash discount or whatever, and then have it all on your 0% card to pay off throughout the terms. Best of both worlds!
So that’s my opinion on it all. How about you guys? All my beautiful readers?! What would YOU do if you were in this position? However it works out in the end, my friend, I wish you nothing but happiness! Getting married is all kinds of exciting – be sure to soak it all up :)
***UPDATE*** Our reader friend is now engaged! Woohoo! The picture of his ring is above…. and here’s what he just emailed me:
“Total cost (of ring): $12,679….This comes out to exactly 1.5 months salary (well below the 3 month guideline!!!). AND it was appraised for $14,500. Now, obviously this isn’t an “investment” in the traditional sense but is nice to know I got more than what I paid for. No regrets – I proposed in Napa at an incredible winery and she said yes : D”
Next up is their wedding which he approximates will cost around $23,000 – Good luck!
PS: Here’s a couple other posts we’ve done in the past too, maybe it’ll help:
(Ring pop photo by Alyssa L. Miller)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!