How Much Should You Spend on an Engagement Ring

POST by The Great Heights Team

When it comes to shopping for an engagement ring, there are a lot of myths floating around about how much you should spend. Luckily, deciding the right amount is pretty easy once you learn some basic facts about this important piece of jewelry.

Why Engagement Rings Cost So Much

According to howmuchisit.org, today’s average price for a diamond engagement ring is $3,000-$5,000. What this stat doesn’t tell you, is that the price can actually vary substantially once you start looking at a few different factors. The quality of the diamond itself, and the metal it is set in (the mount), greatly impact the price. For example, white or yellow 14 karat gold (which is the most popular choice) is more affordable than its stronger and more durable counterpart, platinum.

Other factors behind the scene influence ring price too. Some engagement rings cost more if they are sourced from a special dealer or location (such as a company that promotes ethical mining practices). You might also see a jump in price if the diamonds or other center stones are graded for their value through a reputable association like the American Gem Society. Rings, no matter their quality, will be more expensive if they are part of a name brand collection (think Tiffany & Co) or are made from a custom design.

Once purchased, engagement rings come with many additional hidden costs. Lifetime warranties, gem setting (if your stone and the mount are bought separately), and ring sizing or repair all have their own independent fees. Rings with many small stones or intricate details will be more expensive to size and will typically need more repairs over time.

The Engagement Ring Myth

2-3 Months’ Salary

You have probably heard that the ideal price to spend on an engagement ring is 2-3 months of your salary. This popular myth was launched as early as the 1930’s by the diamond mega-giant De Beers. Today, the average salary in the United States is $47,060. According to this outdated advice, today’s shopper should spend between $7,000-$11,000 on their partners engagement ring! If this number is sending alarm bells to your wallet, don’t worry. Almost no one takes this advice seriously anymore.  

Real Factors to Consider When Buying an Engagement Ring

The truth is that the cost for an engagement ring is going to vary somewhat from person to person. The most important factor to think about is what is realistic for your individual situation.

Your Budget

It is key to come up with a solid budget before you start shopping. Once inside the store, it is too tempting to choose something bigger and more dazzling than you should realistically buy. To avoid this, go to the jewelry store with the set amount you have decided to spend and be ready to pay in full. This way, you aren’t obligated to monthly payments through financing (with interest attached). If you choose to finance the ring, it is important to stick with a monthly payment that makes sense for your situation today, and in the future.

Your Wedding

When creating your budget, don’t forget to think about the money you will need to spend for the wedding that follows your proposal. Weddings become expensive quickly and if you spend too much on the ring, there might not be enough left over for the wedding of your dreams.

Don’t forget, the engagement ring is just one of three rings you will need to purchase in the near future. Traditionally, most couples exchange wedding bands at the ceremony too. Think even farther ahead to your honeymoon or your first home if these costs need to be factored in your long term spending plan.

The Quality vs. Quantity

The easiest way to decide how much you want to spend on the ring, is to learn more about what you are buying. Most couples opt for the diamond engagement ring. If this is the case for you, understanding where the value of a diamond comes from can help you choose what qualities warrant your well earned dollar.

  • Size - Diamonds are sized in carats. Typically, the smallest diamonds in engagement rings are 0.25 carats (though it is possible to find smaller). Generally, as the diamond increases in carats, so does it’s price. However, bigger isn’t always necessarily better in quality.  
  • Cut - The cut of the diamond describes its shape. Round brilliants are the most popular choice for engagement rings. They are traditional and tend to reflect the most light. Other common styles include princess, square, emerald, pear and marquise cut. Fancy or custom cuts often cost more.
  • Color - Diamonds are graded on a color scale. “D” is considered “colorless” meaning you cannot see any yellow hues in the stone. As you move through the alphabet to “Z” the more yellow the diamond becomes. On average, the closer a diamond is to  “D” the more expensive it is. In the store, you will easily find diamonds in the range H-J. Although not technically colorless, it would take a trained eye to detect any hint of yellow. When it comes to affordability, don’t be afraid to choose a stone that ranks lower on the color scale, since this quality isn’t easily noticed.
  • Clarity - Clarity highly impacts the value of a diamond. Diamonds that are graded as “flawless” have zero microscopic inclusions (imperfections). They are extremely rare and expensive. Most stones in the jewelry store will have some natural inclusions. As long as they don’t take away from the beauty of the diamond, they should not be a major concern.

When it comes to diamond engagement rings the general rule is that you will save money if you can compromise in one or more of the areas above. For example, if your partner desires a large diamond, you can choose one that ranks lower in color or clarity. If a flawless diamond is more to their taste, selecting a smaller size will be helpful to your budget.  

How to Spend Less on an Engagement Ring

If you start crunching numbers or have your heart set on a ring that is not in your budget, you have some clever options. One alternative to diamond is called cubic zirconia.  This man-made stone looks like diamond but is much more affordable. Like a rare diamond, it is colorless and hard and has no inclusions. Many people opt to use a cubic zirconia in their engagement ring to show off a larger or more dazzling stone.

Only an expert will be able to tell the difference between a diamond and cubic zirconia, but a cubic zirconia is not meant to last forever. Cubic zirconia can scratch, and most reputable jewelers will not want to work with the stone for repairs.  If you choose to seek out an alternative stone, it is important to know your fiancée. Are they the type to be thrilled at your frugality or are they more likely to get their feelings hurt by a diamond look-a-like?

Another option to lower cost includes opting for gems as center stones. Like diamond, the price of gemstones depends on their size, cut, color and in many cases, clarity. Any type of gemstone is acceptable in an engagement ring as long as it’s to your partner’s taste. Keep in mind that some stones like opals, quartz, and pearls are not meant for everyday wear. Ask your jeweler for more information.

As you can see, engagement ring price takes more thought than 2-3 months’ of salary. Your budget, wedding expenses, and the quality and type of ring you desire matter too. Even on the strictest of budgets, diamonds are not affordable. Luckily, there are alternatives on the market if you need to be creative. With the right frame of mind, you will buy the perfect ring in no time.  

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