Personal Finance

Younger generations say ‘I don’t’ to high-cost engagement rings

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When it comes to putting a ring on it, younger generations are saying yes, but for less money.

Two-thirds of younger Americans — Generation Z and young millennials — think an engagement ring should cost less than $2,500, according to a new survey from TD Ameritrade.

That is about half of the national average. The average engagement ring in the U.S. costs $5,680, according to The Knot’s 2018 Real Wedding Study.

Women across all age groups said they think an engagement ring should cost less, according to TD Ameritrade’s study.

Millennials are more likely to foot the bill for their own weddings, the survey found. Four in 10 members of that generation said they plan to pay their own way.

That may be good news for parents, 93% of whom said they expect to contribute to the big day.

It’s important for all couples reaching such a big financial inflection point in their lives to remember that communication is key, said Chris Bohlsen, director of investor services at TD Ameritrade.

“Have that communication with your parents,” Bohlsen said. “Have that communication with your partner and their parents, to be able to get a healthy understanding of where you’re going to be sitting financially.”

The survey also found reason for parents to root for their children — particularly daughters — to get married.

Half of married young women said they expect to be or were financially independent by age 20 or younger, compared to just 34% of single women.

In response to the same question, the difference between married young men and single young men was less — 44% versus 40%, respectively.

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“One of the big things that we’ve noticed was that the single young Americans just don’t plan at the same rate as married Americans,” Bohlsen said.

For big goals such as saving for retirement or buying a house, single individuals lag behind by two or three years, Bohlsen said. But those individuals shouldn’t let their single status prevent them from having a financial plan, he said.

A majority of both Gen Z and young millennials said they either plan to get married someday or are already married, according to the survey. One in four said they plan not to get married at all.

TD Ameritrade’s survey was conducted online by the Harris Poll between February and March. It included 3,054 U.S. residents ages 15 and up and defined Gen Z as ages 15 to 21 and young millennials as ages 22 to 28.

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