When two finance professionals fall in love, something strange happens. Like with most new couples, there is the unshakeable feeling of optimism — the dreamy, anything-is-possible, idyllic state of a budding romance. Then, there’s, well, the money. Often the cause of stress and turmoil in many a relationship, this topic can be a touchy one. But for two lovers immersed in the world of finance by day, the topic of money — and all of its complex aspects — can be downright riveting.

Happy young couple

My husband and I first met a few years ago while working for a company that makes stock recommendations. It was love at first bull market. We instantly clicked, cashed in our dating cards, and became a unit dedicated in our pursuit of love and dividends. Flash forward a few years, and our finances have strengthened alongside our relationship.

As a couple, we take a very intentional approach to our money. We spend a lot of time thinking about and discussing it. We have a giant spreadsheet (spreadsheets can be sexy) that lists our accounts, spending, and wealth projections for the next 50 years. We legitimately enjoy referencing it as we systematically decompose the pros and cons of buying real estate in the San Francisco Bay Area.

I’ve worked with over 500 households on their finances. So I know that most people don’t instinctively intuit the true cost of our spending. When we place things into our shopping carts, we don’t think about what we won’t buy or do later because of our purchases today. We rarely ask, “Is there a better way to spend this money?” Especially when we’re talking about a tradition like a diamond engagement ring.

Treating Every Dollar as an Investment

A ringless finger is not necessarily a statement about love or monogamy or the diamond industry. For my husband and me, investing in our dream life resulted in a lack of jewelry. We agreed to divert the would-be ring money to create more wonderful memories together. Our martial bliss involves traveling around the world together for decades to come. We also channeled money that could have been spent on a lavish wedding into our 401(k) accounts. Because what says long-term commitment more than maximizing retirement contributions?

For some, rings are a great symbol of the eternal love you share. If you take daily joy in such a symbol, by all means, get one that fits your budget. Personally, I find them to be uncomfortable, a bit of a nuisance, and a risk — with the average lifespan of my jewelry measured in days, I’d constantly worry about losing a pricey ring. In financial-speak, rings have negative value to me. The only reason we’d contemplate getting one is to fulfill a social norm.

I encourage you to consider every use of your cash — a fancy ring, additional education, a car, or a stock index fund — through the same lens. We all value things differently, and there is no universal right answer to how you should spend money as a couple. If tangible items such as rings would add meaning to your life, you should own (and wear) them.

Buying and Protecting Your Ring

If you’ve decided a ring does meet those criteria for you, two factors should dictate how much you spend. The first, in true investment fashion, is how much you are willing to spend to achieve the added meaning and joy a ring will bring into your life. A ring is not an investment in your wealth. Like a car, a diamond is a depreciating asset since it loses a large portion of its value the second you buy it. You should invest no more than commensurate with a ring’s value to you. Let your partner know if a ring would represent a sound investment in your happiness and where it falls in your priority list.

The second is your financial reality. To determine your ring budget, look at your income, expenses, and current savings. Disregard the commonly cited, yet unfounded, rule of thumb that you should spend three months’ salary on an engagement ring. You want to be a financially secure couple. This means, at a minimum, not going into debt for a ring. If you or your partner cannot afford to buy a particular ring with the funds you’ve saved, you most certainly cannot afford to buy it when you factor in interest on the debt. Studies have actually shown the length of your marriage is inversely correlated with spending on the engagement ring. The more expensive the ring, the shorter the marriage.

And importantly, if you own an expensive ring (or other jewelry), consider getting it insured. It’s surprisingly cost-effective and will provide peace of mind in the event of a loss. One of the easiest ways to do so is by purchasing an extension, also called a rider, that covers your rings specifically on your homeowners’ or renters’ insurance policy.

Making Your Own Tradition

Start out your future together with an intentional approach. Without infinite resources, we have to deploy our capital on the things that matter most. Spend the money you can comfortably afford today knowing can always buy a more expensive ring in the future when you are financially independent. By doing so, you are spending not based on tradition, but on the outcome you want to achieve.

Share your best money tips as a couple with us @BritandCo.

(Photo via Getty)