How Much Should You Spend on an Engagement Ring? [The New Rules]

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engagement ring

According to the American Gem Society, anthropologists found evidence of engagement rings dating back to the ancient Roman Empire. However, diamond engagements rings as people know them today date back to 1477 when Austria’s Archduke Maximillian had one designed for his soon-to-be wife. This started a trend that would continue for centuries. De Beers launched the “a diamond is forever” slogan in the 1940s. Since a circle symbolizes eternity, a diamond ring is the perfect sentiment for eternal love. When you are shopping for an engagement ring and deciding how much to spend, there are several important considerations.

Why Are Engagement Rings so Expensive?

If you visited a jewelry store in a mall before, this was probably the first question that popped into your mind. You may have been puzzled to see that some small diamonds had higher prices than some of the bigger diamonds. Between the price differences, bright lights and dazzling sparkle of the diamonds, it is easy to feel overwhelmed when you shop. These are some of the reasons why diamond engagement rings are so pricey.

Market Manipulation

The myth of diamonds being rare came from the De Beers Mining Company a long time ago. A Business Insider story detailed how the mining company had a monopoly on the diamond production market for most of the 20th century. Once other diamond mining companies found plentiful supplies of them throughout the world, De Beers started limiting its supply. It relied on annual predictions for marriages and limited its batches to fit those numbers, which created a perception of scarcity. The tightly controlled market still inflates prices on diamonds, which experts say are not worth what people pay for them today.

Brand Names

As it is with clothing, you are typically paying for the name more than the actual value of the materials of the product. For example, a one-carat diamond ring that is set in platinum may cost $75,000 from a designer. However, a similar design from an online retailer with the same quality of diamond may cost $10,000.

Retailer Location

Believe it or not, this is one of the biggest factors in pricing. While many retailers in malls and other shopping areas may sell designer brands at their suggested prices, they tend to have designs of their own as well. You may notice that they are priced almost or just as high. If you go to a warehouse or factory outlet store in an area where there are not as many businesses, you may notice that the prices for similar rings are much lower. For example, if you visit a store on 5th Avenue in New York City’s trendy Manhattan borough, you would pay more for the same ring that you might find upstate at an outlet store. Retailers have overhead costs to cover, and their markups for each product factor in those costs. Malls typically have high rent, which is part of why you will see rings priced so high in popular malls. Online retailers that do not have physical stores often have better prices because they only use warehouses and do not have the same volume of operational costs.

The Four Cs

Clarity, cut, color and carat are called the four Cs of diamond shopping. They will be discussed later in more detail. However, these diamond attributes affect the price tags. A diamond with higher quality ratings in each category will be priced higher. This is true whether you shop at a discount store online or visit a full-price jewelry store.

diamond engagement ring

Average Cost and Size of an Engagement Ring

The average cost and size of an engagement ring varies depending on the shape of the main diamond. Rounds are the most popular choice. Contrary to popular belief, round stones are normally priced higher than fancy cuts such as princess or heart shapes. According to the International Gem Society, fancy cuts are usually priced between 10 and 43 percent lower than round diamonds. One carat is the most common choice for a center stone or a solitaire. The average cost of a round diamond that is one carat is $7,291. According to recent data from the International Gem Society, these are the other average prices of one-carat diamonds in other shapes:

  • Asscher – $4,137
  • Cushion – $4,229
  • Radiant – $4,443
  • Emerald – $4,476
  • Princess – $4,799
  • Oval – $5,362
  • Heart – $5,536
  • Marquise – $5,596
  • Pear – $5,802

Keep in mind that these are only the average prices, which means that calculations include a wide variety of tags. As mentioned before, prices can vary drastically based on designer, quality attributes and other factors.

Know What Your Girlfriend Expects

One of the most important parts of picking an engagement ring is choosing something that she will approve of and will be happy with for a long time. It may be hard to know what she expects without asking her outright. You should try to find out if she has specific preferences in terms of designer, quality, size, shape and the type of metal for the setting. If you are planning a surprise proposal, these are some tips to help you figure out what she wants without sacrificing your surprise.

Ask Her Friends

Many women talk with each other about their favorite styles for everything from clothes to jewelry. Ask a few of her friends to see if they suggest the same ring styles or stone sizes for her. If she already told her friends exactly what she wants, they will probably be happy to tell you and help you keep it a surprise.

Study Her Style

If her friends or family members are not sure what she wants in an engagement ring, carefully observe her clothing and jewelry choices for a while. For example, if she wears a lot of big accessories, she will probably want a stylish ring with gems or diamonds around a center stone. If she wears simple clothes and rarely wears jewelry, she may prefer something simpler and more traditional such as a smaller solitaire. 

Check Her Social Media Accounts

If she uses Pinterest, Instagram or another platform, she may have shared pictures of engagement rings or other styles of jewelry that can give you some clues. If you save those pictures, you can try to find those ones or styles that are similar. 

Browse Jewelry Stores

You can ask her to help you pick out a present for another family member such as your mother, sister or aunt. Visit a jewelry store, and ask her what she likes. You can casually point out some rings after you browse other jewelry and ask her what styles she likes. 

If all else fails, you can simply ask her what her dream engagement ring is. She may even want to help you pick it out. If she is very independent or does not like surprises, asking her outright may be the best course of action. You could propose with an empty ring box and tell her that since you respect her dislike of surprises or admire her independence, you want her to help you find the right ring.

Know Your Finances

Plan your budget before you shop. Also, decide if you want to buy a ring outright or pay for it over time. If you think about financing, make sure that you can afford the monthly payments. If your finances are tight now and you cannot afford a ring that she loves, talk to her about choosing a different one for now and upgrading later. For example, if you are in college now but anticipate having a good job in five years, she may be willing to wait for her dream ring until then. Tell her that honesty is important to you, and you want to be upfront with her about your finances or what you can afford for a ring right now. She will likely appreciate your honesty and accept your words. If you think that she may be slightly disappointed even though you cannot change your financial situation right now, be sure to include these important points in your conversation:

  • You want to save money for starting your life together since the future is most important to you.
  • If you could afford it, you would buy her the world’s most expensive diamond because she deserves it.
  • She deserves all the happiness in the world, and you plan to find other small and big ways to show her that now and in the future.
ring shopping

Things You Should Consider Before Purchasing

From reading the previous sections, you already know that it is important to make a financial plan. Also, you must consider the quality attributes of the diamond as well as the shape. These are a few other considerations. 

The Four Cs

Once you have the metal setting and main stone shape figured out, think about the four Cs in terms of what she expects.

The color refers to the color tint or whiteness. A colorless diamond will appear bright and brilliant. Diamonds that do not have as good of color ratings have more of a yellowish hue. However, they are not as vibrant as yellow diamonds that are marketed as colored diamonds. The Gemological Institute of America uses a scale that ranges from D to Z for white diamonds. Diamonds that are closer to the end of the alphabet have a more visible color tint. For engagement rings, many people choose diamonds that are about at F on the scale.

Clarity refers to the presence of inclusions. An inclusion is an imperfection. It may look like a tiny speck under a magnifier. However, most are not visible when looking at a diamond ring. Natural diamonds usually have one or more inclusions. GIA uses six clarity divisions, and some of the grades are further divided for a total of 11 grades. If purity is important to your girlfriend, look for a diamond that is higher on the clarity scale such as VVS1 or VVS2. SI1 and SI2 have more imperfections.

Carat refers to the weight. Although one-carat or two-carat sizes are popular, there are plenty of rings with weights that are not as even. For example, a ring with a carat weight of 1.85 may look almost as large as a diamond that is two carats.

Cut refers to the facets. Contrary to common belief, the cut is not the shape. The way any shape of diamond is cut beyond its outline will determine its sparkle. Each diamond is cut to have many facets or surfaces. For example, one round diamond that is the same carat weight as another may look significantly more shimmery or sparkly under a light. This is because of how it is cut. If one diamond has 58 facets and another has under 40, the diamond with more facets will likely have a fiercer sparkle. However, the symmetry and proportion must be optimal for the diamond to sparkle as it should. If your girlfriend wants a diamond that truly glitters or has a fiery sparkle, ask the seller about the symmetry of the facets in terms of fire, brightness and scintillation. 

Natural Versus Lab-created Diamonds

Natural diamonds have been traditional for engagement rings for a long time simply because they are unique. A natural diamond reflects the idea that the recipient is also unique and naturally beautiful. However, there are a few reasons why people choose lab-created diamonds, and these are some top issues:

  • Lab diamonds are less controversial.
  • Lab diamonds are less expensive.
  • Lab diamonds often have high grades.

According to Reuters, diamond mining giant De Beers decided to drop the price of lab-created diamonds significantly to create a superior value among natural diamonds. This goes along with their long-promoted idea that diamonds are rare. If they are created in a lab, they are not as rare and valuable. If your girlfriend is highly conscious about social responsibility, she may actually prefer a lab-created diamond or a natural one that does not come from a mining zone in a controversial area.

Fine Metal Settings

As a rule, you should never buy gold-plated base metal as a ring setting. You want something that will last and will not tarnish. For this reason, you should also leave sterling silver and bronze out of your considerations. Both metals oxidize and tarnish quickly, which means that your future wife would have to polish her ring frequently. Gold is a popular choice. It is measured in its purity, which is karats. This is not the same as a carat weight for a diamond. According to GIA, these are issues about gold settings to consider:

  • Although a purity of 24 karats is the purest form available, it is softer and easier to bend.
  • Gold purity stamps of 10 karats or 14 karats are typically more durable.
  • White gold is less expensive than platinum but looks similar.
  • Rose gold includes copper to yield a muted pink tint.

Think about the center stone for the diamond. If you want to accentuate its beauty, GIA recommends white gold or platinum for grades D through J. Yellow gold pairs well with grades D through M, and rose gold looks better with grades D through L. However, for a softer appearance, grades M through Z will have that effect with a rose gold setting. GIA also recommends choosing white gold for blue diamonds, yellow gold for dark pink diamonds and rose gold for orange diamonds. If your budget allows for platinum, your bride-to-be will probably be impressed. Platinum is one of the strongest, heaviest and most luxurious fine metals in the world. If you already know her preference specifications, the final choice should be what she wants if possible.

The Rules on How Much to Spend

Now that you have a better idea of what to look for or how to figure out what your girlfriend wants, you must start budgeting. You have probably heard that there are rules about how much you should spend.

The Old Salary Rule

There used to be a common saying that a groom-to-be should buy a ring that was equal in price to the amount he made in three months. With that logic, you would pay $15,000 for an engagement ring if you make $60,000 each year. If you have a mortgage, a car payment and many other living costs, that probably sounds ridiculous. Also, variations of a one-month and two-month rule were circulated in the past. The three-month rule is a rule with no merit that dates back to the 1950s. Today, most people cannot afford to spend one-fourth of their annual salary on a ring. Weddings are also more expensive on average today, and many people also carry student loan debt when they get married.

The Spending Rule for 2019

You are not expected to pay so much by modern standards. In a society that now recognizes individual needs and differences, your bride-to-be is certainly more likely to understand that you can only buy her a ring that you can afford. If you have a limited budget, a recent study that was published by the New York Times may make you feel better. People who made $40,000 to $90,000 annually reported spending less than two weeks of pay on a ring. People who made between $23,000 and $40,000 spent about what they made in two weeks. However, people who made under $23,000 unnecessarily spent about as much as they made in two months on engagement rings. There is no specific rule about how much you should spend. You should instead stick to your goal of buying your bride a ring that she will be happy with and one that you can afford whether you finance or buy upfront. It is always better to enter your marriage as financially stable as possible than it is to start with multiple debts. This is especially true if you will also help with the wedding or honeymoon costs.

How to Save Money on an Engagement Ring

US News published a guide with tips on how to save money when you shop for an engagement ring. According to the article, December is the most common time for couples to get engaged. Some retailers mark up the prices during holidays and other popular shopping times. These are some other tips that the article suggested for any time of the year.

Choose a smaller carat weight. If your girlfriend wants a full carat or a full two carats, you can buy a ring that is slightly under the desired carat weight to save a little money. 

Aim for visible qualities. Since you, your future wife and others will not be inspecting her diamond under a microscope, visible clarity and color are more important than microscopic specifications. For example, a VVS1 and a VS2 or even a lower SI rating may not look that different to the naked eye. If your girlfriend is not adamant about these specifications, opt for a lower grade.

Buy a ring online. You and your girlfriend can certainly visit a jewelry store to try on rings and to make sure that you find the right size. However, you can often find similar rings online for much less. As you compare companies, be sure to buy from one that is reputable. Also, make sure that the company is not selling fake gems.

Consider alternative gemstones. If your bride is not a traditional person, she may like a ring that includes other gems in addition to a diamond or instead of a diamond. Also, she may prefer a lab-created diamond if you both want to save money or if she is concerned about environmental issues.

Opt for a custom design. Your bride-to-be may have her eye set on a fancy designer ring that you cannot afford. If this is the case, ask an independent jeweler to design one that looks like it. This can save you thousands of dollars if your bride is more in love with the ring’s style than with the designer’s stamp. 

Above all else, set a budget and stick to it. Aim for a ring that is under your budget amount since you may have to pay for shipping, tax or insurance. Also, be sure to compare prices between multiple sellers.

purchasing a ring

Best Places to Buy Engagement Rings

When it comes to shopping for engagement rings, these are the most common choices:

  • Pawn shops and consignment shops
  • Discount stores
  • Factory outlets
  • Mall stores
  • Online retailers
  • Private jewelers
  • Designer stores

The best place to buy an engagement ring depends on what you want and what your girlfriend wants. If you have a limited budget and want something affordable, an online retailer is your best bet. However, if you are leery of shopping online and prefer to buy from an established business, you should choose a factory outlet or a discount store. You will find limited quality and selection at discount stores since they sell many other types of low-cost merchandise. At a factory outlet, there is a wider selection but lower prices. Look for companies that offer GIA-certified diamonds, good warranties or a satisfaction guarantee whether you buy them from a store or online. With online retailers, it is better to work with one that has been in business for more than a year and has good reviews on independent sites.

If your girlfriend insists on a designer label, you should visit a mall store or a designer store. However, compare online retailers to see if anyone offers an authentic ring for a lower price. Again, you can have a private jeweler design something for her if she does not care about the designer stamp. Many people have superstitions about previously owned rings. If your future wife is like this, skip the pawn shops or consignment shops. If she does not care, you can usually find low-cost engagement rings that are nearly new at pawn shops. Consignment shops often sell second-hand engagement rings for less. Also, there are luxury consignment shops that sell vintage designer rings for reasonable prices if your bride prefers an older style of designer ring.

Is It Smart to Finance the Ring?

There is no simple answer to this. As a rule, it is not smart to finance the ring if you will pay a significant interest rate for more than a year or two. For example, imagine that you buy a ring for $10,000 and finance it at eight percent over five years. Your monthly payments will be a little over $200, and you will wind up paying nearly $12,500 in the end. You may need that $200 each month for other expenses. There are free online loan calculators that can help you see what you would pay monthly and the total amount. If you plan to have children right away, think carefully before you finance a ring.

On the other hand, it can be smart to finance the ring if you do not have to pay interest and if you have extra money each month. Imagine that you find a ring at a factory outlet store for $5,000. You also want to build credit in hopes of buying a house in the future. If you have a good salary, a short credit history and a decent credit score, you may qualify for a zero-interest introductory period on a loan or on a credit card. If this is the case and if you are certain that you can pay it off in that promotional period, you will not pay beyond the price tag. Also, you can actually improve your credit after you complete the loan and make the payments on time.

The Bottom Line

Today, there is no specific salary ratio that you should plan to follow. Try to pick a ring that reflects her personality or some special sentiment between you instead. Thoughtfulness is more important than how much you spend. You should shop within your means, communicate with your girlfriend and choose a ring based on your current and long-term financial abilities. If she is the one, she will understand this, will respect your honesty and will also appreciate that you care more about the marriage than an expensive ring. After all, you can always upgrade to a lavish ring to surprise her with in the future for an anniversary.