How Much To Spend On Diamond Engagement Rings

I get this question all the time – how much do diamond engagement rings actually cost? It’s usually followed by someone else in the crowd chiming in that it’s always supposed to be two month’s salary to pay for the ring. I don’t blame them for thinking this; De Beers did a great job advertising this practice of paying two month's salary as a "tradition" that everyone should follow.

The reality is, however, that on average Americans spend less than two months of their salary on the engagement ring, despite what many seem to think (Source: BBC).

Purchasing diamond engagement rings should really be a personal decision by the buyer that is calculated based on a number of different factors. To assume that two month's salary has to be spent is an outdated concept and one that was manufactured by De Beers years ago.

There is no magic number that will be a one-size-fits-all answer to how much any one person should pay. Beautiful, quality diamond rings can range in price dramatically. You can spend under $1,500 for a 1/2 carat, classic solitaire ring or spend over six figures for a 5 carat stunner that would fit right in on the red carpet.

Before you decide on a budget that falls within that range, here are a few factors you should consider first:

How much is do you plan on spending on your wedding?

The engagement ring is really the first purchase that'll kick start a whole chain of future purchases associated with a wedding. There's the venue, cake, food, dress, etc. Weddings can add up quickly, especially if you want it to match her expectations.

Even though the proposal hasn't happened yet, the wedding is sure to follow only a year or two afterwards. It's crucial that you keep this in mind, especially if you are not getting any financial support from family or friends.

Keep in mind that on average, weddings cost around $29,000 in the US (Source: The Knot). Make sure the ring is something you can afford along with all of the other expenses you will have to pay soon after the proposal.

What are your future financial goals?

When you get married, you have another person's finances to think about. While you might have paid back most of your student loans, your significant other may have more to pay off plus other debts they may have accrued along the way. It's essential that you figure out what is most important financially to you as a couple. If either of you have major debts to pay off still, it may not be practical or in your best interest to spend too much on the ring.

You also need to think about other things you intend to pay for as a couple together. You'll want to sit down with your significant other and talk through short and long terms goals. For instance, do you plan on having kids and starting a college fund early for them? These questions will help you and your future fiancé stay on the same page and give you a good gauge to see how much wiggle room you have in your budget. If that money needs to be spent elsewhere, it's time to start figuring out ways to buy the ring on a budget.

Avoid overspending on the ring and bringing any unnecessary debt into your marriage.

Some rings look beautiful in the store and will be equally as stunning on the hand of your significant other. But, what if her lifestyle doesn't allow for her to wear such a nice ring?

There are many professions that discourage large diamond rings or even wearing rings at all. For instance, many nurses choose not to wear their engagement rings at work because it can easily be damaged and can be a safety hazard.

The type of metal you choose to buy also should coincide with her lifestyle. If she is working with her hands all day, platinum is really the best option of ring metals to buy. It is the most durable and will last longer. The cost of buying a platinum band in the beginning will be more expensive than other metals, like gold. However, the long term savings with this type of metal are worth it if she is working a more active job.

How important is this ring to her?

It may be worth having a conversation with her or hinting about buying an engagement ring to feel out her opinion and excitement level. Some women would really prefer that the money be spent elsewhere and really wouldn't want you to spend that much on it. She may be thinking more practically about it and would not be as excited to get the biggest stone possible. As a couple, you might want to consider having this conversation so that you are both on the same page about what you are planning on spending.

Is she willing to wait for the ring of her dreams?

Sometimes it's hard to afford the ring she wants when you are still so young. You may not even be close to the peak of your career yet, and there is more money to be made further down the line along with additional savings you collect over the years. It's not uncommon for a couple to upgrade or reset an engagement ring later on in life.

Most jewelers offer services that will allow you to upgrade her ring and eventually have the ring she always dreamed of having. If communication around marriage has already started, you may want to run this by her before you go to buy the ring. She might actually encourage you to do this so that you have more money to spend on other things in the short term.