Getting engaged and buying your first home are two of life’s biggest moments. Each milestone embodies the love and commitment you share, as well as the excitement of building a future together. But what happens when your savings don’t seem to stretch far enough to cover both? Which one should you prioritize?
While an engagement ring may one day be an heirloom passed down to future generations, making a down payment to purchase a house is a pragmatic step toward your shared goals. Each purchase carries significant emotional and financial weight. Let’s explore some factors that go into each choice, so you can make a decision that aligns with both your financial reality and dreams for the future.
The money behind the milestones
Before diving into the sentimental side, you may find it helpful to learn more about the financial aspects of these decisions. By exploring your options, including engagement ring financing and down payment assistance, you can make choices that support your goals.
Down payment
Buying a home is a long-term investment. Your down payment and monthly mortgage payments go toward building equity in your home. (Equity is the difference between the value of your home and how much you owe on your mortgage.) A higher down payment may help you build equity faster. The less you owe on your mortgage, the more money you may be able to keep if you decide to sell your home. Building equity may also allow you to borrow more against your home in the future with a home equity loan or home equity line of credit.
According to Freddie Mac, down payments typically range from 5 to 20% of a home’s purchase price. For a $300,000 home, that’s $15,000 to $60,000. Some mortgage programs may allow down payments as low as 3%.
Many state and local housing agencies offer down payment assistance programs that can make home ownership more accessible. To find these programs, you can ask your lender or visit the U.S. Department of Housing and Urban Development’s directory of state programs.
It’s important to note that putting down less than 20% comes with additional considerations, such as the need to pay for private mortgage insurance, which is a monthly fee rolled into your mortgage payment. Making a lower down payment could also mean that your monthly mortgage payments are higher.
Engagement ring
The average engagement ring costs around $5,200, according to The Knot’s 2024 Jewelry and Engagement Study. Factors like your budget, the size of the stone, the materials used and the design could all affect how much you spend. You might also choose to insure the ring, in case your partner loses or damages it. In this case, you’ll also need to plan for the monthly insurance premium.
The ring you choose doesn’t necessarily need to follow the “three-month salary” rule, but it should reflect your relationship, your partner’s style and your story together.
If the price tag feels daunting, consider alternatives. Choosing lab-grown diamonds, simpler designs or even a more affordable placeholder ring that you intend to upgrade later can offer meaningful alternatives without stretching your budget too thin.
To help with the cost, you could consider engagement ring financing, which might take the form of a personal loan, in-store financing or buying the ring with a credit card.
Unlike a house, a ring doesn’t grow in financial value over time. With that in mind, you’ll want to make sure that the type of financing you choose is affordable, with an interest rate the doesn’t add too much to the ring’s cost over time.
Thinking beyond the numbers
Once you’ve considered the costs, it’s important to think about how these choices affect your life in the long run.
Homeownership and the bigger picture
Owning a home is an ongoing responsibility. There are monthly mortgage payments, property taxes, insurance premiums and inevitable maintenance costs involved. Homeownership is as much a lifestyle choice as it is a financial investment — one that you and your partner may or may not feel interested in or prepared for.
But for many, a home represents stability and roots. A down payment could help you secure a place to make memories and reach more major life milestones together. As the years go by, owning a home could also contribute to your financial security if property values grow.
The sentimental value of a ring
For some couples, an engagement ring is a deeply meaningful symbol and worth a major investment. While it likely won’t rise in value the way a house might, a ring will be worn and cherished every day. If you or your partner feels strongly about the meaning of an expensive engagement ring, the return-on-investment will be emotional rather than financial, and that’s okay.
Finding the middle ground
There’s no blueprint for these types of decisions. The approach you take will depend on your priorities, your timeline and what feels right to you and your partner. Whether you prioritize the perfect ring, the perfect home or find a way to make both work, what matters is stepping into this next chapter in a way that aligns with your shared values and supports long-term financial stability. The milestones are important, but the partnership behind them is what carries you forward for years to come.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service.
The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
