How much to spend on an engagement ring is a delicate topic, but one that I want to try to provide advice.
I’ll never forget the time I drove with my best girlfriend and her new fiancé. He turned to me and asked my opinion on what was more important to spend money:
- The engagement ring
- The wedding ceremony/reception
- The honeymoon
I am more than positive that I yelled “THE RING!” and that would still be my answer today.
The wedding day brings on much stress – you plan for months and in a blink of an eye it is all over. Only lovely memories remain along with photos for you to flip through.
The honeymoon, on the other hand, is simply a long needed vacation where you can both catch up on much needed sleep. No wonder all the advertisements for honeymoon destinations include couples relaxing on a tropical beach. After all that planing, you really don’t have any energy to do anything else.
An engagement ring is a symbol of love that you will wear everyday. You can look down at the ring as many times as you want in a day and reminisce about the adventures you have been through as a couple. It is the one tangible item that is on display, which everyone can see that you are happily engaged or married.
In the past, it was also a valued family heirloom that would be passed down through generations, although that doesn’t seem to be as common anymore.
Now on to the big question:
“How much do I spend on an engagement ring?”— Every spouse needing to buy one!
We have all heard about the gold rule of spending three months salary on a ring. Upon doing my research I found that there were a couple other rules you could follow: a two month salary rule as well as a one month salary rule.
If all else fails, you could just spend the average amount on an engagement ring in 2020, which is $5000 according to wedding stats research from last year. Great help!
I think there are more important factors that should influence your decision as opposed to some silly salary ratio that was created as a marketing ploy to entice you to spend more of your hard earned money.
Engagement Ring Cost Factors
Below are four factors to consider when deciding how much to spend on an engagement ring.
1) Know your Gal
By now, the person who is purchasing an engagement ring should know his partner fairly well and should be able to answer the following questions with ease:
- What is her sense of style?
- Is she a tom boy or girly girl?
- Does she works with her hands a lot and will she need a durable ring?
- Is she flashy and prefers to be frosted in jewels?
- Alternatively, is she demure and practical with jewelry prices?
- Does she own a jewelry box that is used to collect dust?
- Is she a name brand queen or a bargain basement hunter?
- Is she traditional or does she like to be unique?
The answer to these questions will give you a better idea of how much to spend on an engagement ring. Once you have a ballpark dollar figure, you will be able to eliminate certain types and sizes of diamonds (or whatever stone you choose).
Let’s say you have a girlfriend that is a bargain basement hunter, likes the odd name brand, takes pride in her appearance, modest, and can appreciate the finer things in life. She is the type whose language of love is words of affirmation. She would likely embrace a larger diamond with open arms and would be overjoyed to receive compliments on her ring.
Perhaps you have a money conscious tom boy, who is not a flashy at all, works with her hands and spends her spare time in some sort of sports league. This girl would likely be fine with a more clean and simple ring.
Do your homework and figure her out. Talk to her and get a gist of what styles of rings she likes. If you can’t ask her yourself for fear you will spoil the surprise, then ask a family member or friend who should be able to give you a better idea of what she wants.
2) Minimum and Maximum Ring Budget
I found a good article that kicks the “3 months salary” rule to the curb. The author considers a minimum budget for a good quality ring to be $550 regardless of your salary. The author’s maximum budget band is based on the logic of how much you could cope with your everyday budget if you lost your really expensive diamond ring. Check out the graph at the bottom of the article as I think it makes a lot of sense.
You certainly don’t want to appear cheap, but also shouldn’t start your married life together with a pile of debt. It is important to look at your individual situation and ask yourself the following questions:
- What is the total earning potential as a couple?
- Do you have the money in the bank or will you have to finance your purchase?
- If financing is the only option, what credit is available and at what interest rate?
- How fast are you able to pay down your debt?
- After popping the question, what other expenses will arise shortly thereafter? (wedding, honeymoon, house, baby)
- How will the purchase of an engagement ring affect your existing financial commitments?
- Could the big ring purchase wait until you have saved more?
Spending money on an engagement ring is a monumental time in your life, and likely one of the bigger luxury purchases you will make. It is overwhelming and you can easily get caught up in the emotion of it all.
Make sure you do your homework and answer the above questions before you go shopping for a ring. Trust me, you will come into contact with the schmoozing diamond salesman who only wants to sell you a bigger diamond.
3) Diamond Quality
The price of a diamond increases drastically depending on the 4 C’s. For those of you who need a basic primer on the 4 C’s (Color, cut, clarity, and carat) head on over to Blue Nile’s education center. They do a good job of explaining the 4 C’s along with a lot of other diamond, gemstone, and ring education.
Once you have narrowed down what kind of ring your girlfriend wants and set your budget, you can play around with price levels and diamond sizes. Your future fiancée may want a simple 1 carat solitaire diamond ring. Be warned that the bigger, shinier, brilliant diamonds come with a heftier price tag.
Price Examples of Two Diamonds
Both taken from Blue Nile as of June 2020.
- 1 Carat Diamond with Poor Quality: Round 1.00 carat diamond with a good cut, J color, and clarity of S12 will cost you about $3000
- 1 Carat Diamond with the Best Quality: Round 1.02 carat diamond with a signature ideal cut, D color, and internally flawless clarity will cost you about $12,294
The same size of diamond (1 carat) has a whopping $9294 price difference due to the cut, color, and clarity of the diamond.
Knowing the 4 C’s enable you to comparison shop with confidence. The two price examples above indicate that you can buy your girlfriend the big 1 carat rock. In reality, if she just wants the big rock for the sake of saying she has a big ring then go for it. You would be spending three grand, but you are not paying for quality.
Take another example ring – a round 0.76 carat diamond from Blue Nile with a very good cut, H color, and clarity of VS2. It will cost you about $2483 (accurate as of June 2020). With its very good cut, clarity and color this ring will be brilliant and shine like a diamond should! Ultimately, you should aim to pay for top notch quality no matter the size of the diamond.
Perhaps you don’t have the budget for a $12,000 1 carat ideal diamond ring; someone has to pay for the wedding, after all. Choose a lesser size diamond with better cut, so that it will give off just as much punch as a bigger diamond.
4) Get More Bang for Your Buck
My husband and I bought my ring from a family run jewelry shop that has been in business for 30 years. Both the daughter and mother are CGA approved gemologists. My own mom and dad have been going to this particular jeweler for years.
Buying my ring at a family run jeweler meant the jeweler was able to offer us a ring without a big retailer markup. We cut out the middle man and my ring was appraised at double the value my husband actually bought it for.
Tip: Add a halo to a diamond solitaire to add weight to the ring. It also makes the ring appear larger
Alternative to Family Jeweler
If you don’t have a longtime family jeweler to draw on, then I would suggest looking at Blue Nile. My brother-in-law bought an engagement ring for his wife on Blue Nile and he has nothing but good things to say. Also, my husband used their site to research and educate himself on all things diamonds as they have a great diamond education and resource page.
My husband said if it wasn’t for my family jeweler, he would have bought my engagement ring from Blue Nile.
In conclusion, the ring budget should not be based on the pricing scheme some marketers came up with in the 1930’s. And if the relationship is based on the size of the ring, then it probably isn’t a solid relationship to begin with and doesn’t have a good chance of withstanding the up and downs of marriage.
Whether you spend $500 or $16,000, the ring is just a symbol of the bigger picture of two people coming together and becoming one.