If you’re thinking about “popping the question”, then one of the first questions that you likely have to ask yourself is, “How much should I spend on an engagement ring?” This is, of course, a loaded question with no simple answer.
The old standard that many jewellers recommend as a rule of thumb for engagement ring cost is 2-3 months’ salary, but this is overly simplistic. It may be wildly out of proportion with what you can afford, and what your partner may be expecting.
It actually was developed as a marketing term for DeBeers, one of the biggest diamond suppliers in the world, as a way to try to increase people’s spending on engagement jewellry. At the same time, it’s based on a bygone era of stable, well-paying, 40-hour-a-week jobs at the same company for years on end, with pensions and retirement benefits – things that are the exception rather than the rule today.
But don’t despair! Though the answer to that question may be a bit more complicated, we’ll walk you through all the considerations and help you arrive at a conclusion that makes sense for you and your unique circumstances. That way, you can focus your energy on crafting the perfect proposal and making a memory to last a lifetime, as you (hopefully) take the first step towards a new life together.
In this guide, we’ll discuss:
1. The average cost of an engagement ring
2. Understanding your relationship and partner’s expectations
3. Things to consider about purchasing an engagement ring
4. How to budget for and save for an engagement ring
5. Tips on saving money on an engagement ring purchase
Average Cost of an Engagement Ring
First, it’s important to get some basic facts about the typical price of engagement rings, and the average that people spend on buying an engagement ring. The numbers vary considerably based on a variety of factors, including geographic region, socioeconomic status, demographics, and more. The best data sets we have come from the US and Canada, where prices for engagement rings are nominally similar.
Over the past decade, the average cost of an engagement ring has increased slightly, at a bit more than the rate of inflation, but largely fall between $5,000 and $6,000. But remember, that’s the average – there are plenty of rings out there that cost a $1 million or more, and plenty that are well below that average price.
One of the biggest mistakes people make when looking to purchase an engagement ring is feeling compelled to spend more because a certain number is “average” or maybe what friends, family, or others tell you is the right range to spend. We don’t present this information for that purpose, but rather to give you a good sense of the baseline – the true average that people are actually spending – before we dive into a much more nuanced discussion to help you determine how much YOU should spend on an engagement ring.
Understanding Your Relationship and Partner’s Expectations
Some people will tell you that an engagement ring doesn’t really matter – it’s just an item, a materialistic symbol, and that real love doesn’t need such things. While that’s certainly a nice sentiment, it’s not entirely practical for the vast majority of people looking to purchase an engagement ring. It is very likely that your potential fiancée has been dreaming about their ideal engagement ring for a long time.
They are likely to have certain preferences and expectations, and you don’t want to disappoint them. At the same time, expectations should be tempered by reality – after all, if your partner is more concerned about the ring than you going into debt to pay for it, that in and of itself should give you pause about the status of your relationship!
There are no hard and fast engagement ring rules, after all, and every relationship and individual is different. With that said, though, it’s important to remember these things about your relationship and partner’s expectations:
1. An engagement ring is designed to be a symbol of your relationship, your love, and your commitment to each other. The expense and opulence itself is part of a gesture, to show you are giving of yourself – spiritually, emotionally, and materially – towards a shared future together. That shouldn’t be undervalued or overlooked.
2. Some women have a strong preference for the type of stone, setting, shape, band color, and whole manner of other aspects of their ring. Others don’t care nearly as much, and would be happy with almost any choice so long as it comes from love.
Only you can know the type of person your significant other is, and what they might expect, and have to walk that delicate line.
3. Recognize that, for most women, this is going to be the most important piece of jewellry they own, and they’re going to wear it and have it on full display every day for the rest of their lives. While the ring is designed to make them happy, it also does serve as a bit of a status piece, to show off to friends and family.
The degree to which this may matter for your particular significant other is, again, something that only you can determine.
All of this is not to say that you absolutely need to purchase an extravagant, extremely expensive engagement ring. $30,000 engagement rings may be offered by most jewellers, but they’re the exception rather than the rule in terms of what they sell.
Finding that balance between affordability and expectations, and knowing what (and why) aspects matter to your potential fiancée, are the core principles underlying selecting a perfect engagement ring that won’t bankrupt you in the process.
Things to Consider About Purchasing an Engagement Ring
No, we’re not talking about cuts, gem grades, or anything like that here. That’s a separate topic for another guide. Rather, there are several things you should consider before purchasing an engagement ring, specifically with regard to your finances and pricing engagement rings. Specifically:
1. As discussed above, you’ll want to have a good understanding of your relationship and your partner’s expectations, as this will dictate some portion of your decision-making in terms of how much to spend.
2. After engagement comes marriage, which usually includes wedding expenses, honeymoon expenses, possibly moving into a new home together, merging of finances, and a whole host of other things that all add up to costs and strains on your finances. Think about the long-term, and temper your eagerness to impress her with an amazing engagement ring with the long-term financial needs you foresee once she says, “Yes.”
3. Don’t go into significant debt to pay for an engagement ring. It can drag down your credit score, and make it harder to pay for all the other, more necessary expenses (such as housing) that are likely to be part of your near-future when she accepts your proposal.
4. It’s often ideal to look at your current income and expenses, perhaps on a monthly basis, along with your savings and existing debt. Try to determine how much you can set aside each month for a few months to save up to buy a ring.
And, if that’s not enough, determine how much financing or debt you could pay off over the course of a few additional months after the purchase, and use those two figures as a good guide for what you can realistically afford.
5. Be honest and serious in your relationship. If you’re at the point where you are ready to propose, then you should have some sense of a shared expectation on how your finances are handled, what reasonable expenses are for something like this, and, again, what her personal expectations are.
Some women (though in the minority) would be off-put by you spending hard-earned money on something frivolous, whereas we’ve heard of other women who were insulted by a sub-$1,000 ring and cajoled their man into returning it for something more expensive.
6. Remember, spending a lot of money doesn’t equal love. It’s also a two-way street when you seek to determine how much you can budget or save for an engagement ring.
If you spend hundreds of dollars a month on hobbies or luxuries of your own, then it’s clear you can set aside hundreds of dollars a month for a few months to be able to buy her a nice engagement ring.
If you’re already struggling financially, and don’t spend on anything non-essential, then it’s also much more understandable for you to spend less on a ring than the average engagement ring costs mentioned earlier.
How to Budget and Save for an Engagement Ring
Based on the above, you may be wondering how to budget for an engagement ring purchase, and how to put money aside to save up to make that purchase. Once you start to get serious about popping the question, it’s best to have a plan in place to pay for or finance your engagement ring.
Try to set aside some money out of each paycheck or pay period specifically for the engagement ring purchase. If you need to open a separate bank account to do it, then go for it – anything that will keep you from otherwise spending the money.
At the same time, you can’t neglect your regular necessary expenses. But you can dial back luxury or non-essential expenses a bit to help you save up for the ring. Cut coupons, go out to eat less, reconsider purchases of things like electronics or new clothes, and otherwise try to be more frugal in your expenses.
It also doesn’t hurt, if you have the capability of doing so, to work a few extra shifts, get some overtime, ask for a raise, take on a new project, or even get a side job in the gig economy, such as driving for Uber or working for DoorDash or something like that one or two nights a week. It’s a quick and easy way to generate extra cash to afford the cost of an engagement ring.
Tips on Saving Money on an Engagement Ring Purchase
Here are a few more tips that can help you save money on your engagement ring purchase.
1. Shop at a reputable retailer, either in person or online. Comparison shop before making your final purchase. Reputable retailers that have been in business for quite awhile, such as Randor Jewellry, will be able to make suggestions on designs and other elements to work with almost any budget.
2. Don’t shop at peak times for engagements, or you’ll likely encounter higher prices. The laws of supply and demand still apply, even when it comes to engagement rings. The most active time for buying engagement rings is between November and February. Try buying outside those months for the best deal.
3. Fully research engagement rings, engagement ring prices, and the factors that impact them, including the 4 “Cs” – carat, clarity, cut, and color – so you know what you’re talking about, and what to expect, and why two rings that look almost identical maybe thousands of dollars apart.
4. The diamond is the most expensive part of the ring, but if you are looking for a budget engagement ring that still looks lovely, consider spending a bit more on a flashy or opulent setting, as they can make even small diamonds look much more blingtastic.
5. Diamonds are not the only choice, either. While it is traditional, it can be replaced or augmented with other stones, especially if your significant other has certain gemstone preferences. Colors and shapes can also play a big part in the look, and the cost of an engagement ring.
6. Many retailers allow you to customize a ring online in advance and get a sense of the options, what goes into the different prices, and what you’re looking for. Take advantage of these free tools before you shop.
7. A brand new ring doesn’t necessarily mean a brand new diamond or other gem. Sometimes, you can find or repurpose gems from jewelry purchased at estate sales, in closed lots online, or from other sources – even bequeathed heirlooms.
Providing your own stone can radically reduce the price of an engagement ring, and most jewellers are happy to find an appropriate setting for the stone at a reasonable price.