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My understanding on etiquette of things - If a man proposes to a woman, then he gets her a ring. If a woman proposes to a man, she gets him a watch (currently the tradition.) The proposee does not have to get the other anything in return. (The whole concept of giving something ties into the whole concept of this is a legal agreement - one party proposes a "deal" and offers compensation to complete the deal.)
As far as payment of for the items - "traditionally" the proposer pays for the ring/watch with their own/family's funds. However, since we are now in the 21st century, it is whatever everyone is comfortable with - and there is always financing.
And as others have said, at this point in your life, don't break the bank. That is what 25th anniversaries are for.
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Back into hibernation.
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