Buy A Bargain Ring
Justin is saving for an engagement ring and a wedding. He wants to know if he should pay off the student loan debt first or go ahead and put money toward his engagement ring.
QUESTION: Justin in Los Angeles is saving for an engagement ring and a wedding. He wants to know if he should pay off the student loan debt first or go ahead and put money toward his engagement ring. He has $80,000 in student loan debt but doesn’t know where the money went. Dave recommends saving to buy a ring while making minimum payments.
ANSWER: You have the right to question where this $80,000 went before you pay it back. That’s a side issue, but I’m going to want to know a lot more about this than you know if you’re planning on paying it.
I would pay minimum payments on my student loans while I saved up some cash to buy a reasonable engagement ring. The maximum engagement ring is one month’s pay. You can’t afford that. You’re going to be buying less ring than that. Keep in mind that rings and diamonds are one of the highest markup items at the retail level. You need to look for a high quality, high-end pawn shop or a diamond broker of some kind. You need to start learning about diamonds and maybe take someone with you who does know about diamonds. You’re looking for a bargain. You’re going to save up and pay cash for it. Keep in mind there are a lot of people listening to this show who’ve been married 30, 40 or 50 years who did so with a ring out of a bubblegum machine. There is no correlation between the size of the diamond and the success of the marriage.