How Much Should You Spend On An Engagement Ring?

Ah, budget… the least elegant part of the discussion when it comes to engagement rings!

When we meet with engagement clients at Secrète Fine Jewelry, we really get to know each other. We talk about diamonds versus gemstones, yellow and rose gold versus platinum, lots of sparkle versus minimalism, we share how-we-met stories, talk about family traditions, even share religious perspectives on marriage with smiles on our faces, but then comes the awkward question: Have you considered what you think your budget should be?

When the conservation turns to money, all too often we witness these easy-going, optimistic, happy people clam up; they resort to vague language (“healthy, but not unreasonable”), or give ranges so vast they don’t reflect any real planning (“anywhere between four thousand and fifteen thousand”), or simply a shrug and a change of subject.

The reality is that an engagement ring is an important purchase, and the budget is worth thoughtful consideration and frank discussions. While there is no one answer for everyone, there’s a lot of advice, so Secrète decided to evaluate the pros and cons of some of the most popular advice for determining how much you should spend on an engagement ring.

This 2ct cushion cut is set in an 18k yellow gold halo setting with accent stones on the shank. Secrète Fine Jewelry hand-creates each ring, and our engagement specialists can help you choose the perfect center stone for your ring and your budget.

2 OR 3 MONTHS’ SALARY

The Theory: Traditionally, partners have been advised to budget two or three months’ salary toward an engagement ring purchase. This calculation originated with DeBeers advertisements that featured taglines such as, “How do you make 2 months’ salary last forever?” These marketing campaigns have varied based on the era and the location.

Pros: The good thing about this suggestion is that it does come up with a personalized plan. Instead of a dollar figure, the amount you spend is relative to your income. It’s also a fairly simple thing to calculate, so you don’t need spreadsheets, a CPA, and a pie chart to figure it out.

Cons: The calculation is very simplistic, failing to account for so many variables. If you have savings, already own your home, and are not trying to save for another big expense, maybe it’s a good number for you. However, if you’re still paying of student debt, saving for a house, or trying to put a little aside for the future, you may want to put more consideration into it. You can ask two people who make $90,000 a year what a $15,000 purchase would mean to their future, and chances are you’d get two very different answers.

We created this gorgeous cushion-cut engagement ring with a two-tone double halo in white and natural pink diamonds for a Tennessee couple; because of the double-halo, the center stone didn’t have to be too large for a maximum-impact look.

Consider the Averages

The theory: By looking at current national and regional averages for engagement ring costs, you can get an idea of what you ought to spend. According to a 2018 article in Business Insider, Washington, DC, couples spent an average of $8695 on engagement rings, while Maryland couples spent $5972.

Pros: Looking at averages will definitely give you a sense of what’s “normal.” With more detailed reports and statistics, you’ll be able to prepare yourself for what you might expect to spend this year, in your area. Looking at averages helps you get a sense of the engagement spending culture, in a general way.

Cons: The average costs of engagement rings reflect the sum of all sorts of purchases, from teenagers eloping with crystal promise rings to CEOs with flashy diamonds, from young couples budgeting for triplets on the way to Baby Boomers with a career’s worth of savings in the bank. It’s easy to find the average cost, but it’s harder to know where your particular financial situation compares to an idea of “average.” “Average” describes almost nobody, because, of course, about 49% of people will be above the average and 49% below.

AS LONG AS IT’S AS BIG AS HER FRIENDS’ DIAMONDS

The theory: This one isn’t an “official theory” on how to set your engagement budget, but peer-perception is definitely a driving force in the way people actually set their budget. When couples in a friend-group start heading down the aisle, a little comparison can occur– this ranges from friendly advice to hardcore one-ups-manship– so many brides and grooms to be simply want to buy a ring “as good as” their friends’ rings.

Pros: This idea at least gives some relatable social and cultural context for expectations, and speaks to a personal level; it’s not about keeping up with the movie stars or the royal families, it’s about your own friend culture. Even though the engagement ring is all about making that one special person happy, it’s true that the one special person will want to be able to feel proud while showing it off to friends and family.

Cons: First, it’s unlikely you know what your friends actually spent on their rings, unless you’re very close. Second, it’s possible that even within friend groups with similar jobs, career types, or incomes, your financial situations may differ greatly– one friend may have inherited that 3 carat cushion cut and only paid around a thousand dollars to have the setting re-imagined, another friend may have saved for years, and another may be struggling to pay off the line of credit he took out for his big purchase– so before you try to keep up with the Joneses, remember you don’t really know the Joneses’ financial health. Finally, the only thing your engagement ring needs to do is make the one you love happy; it doesn’t have to impress your colleagues or prove anything to anyone else.

Will she compare her ring to her friends’? Probably. No matter what, Secrète believes that each of our rings should be made-well, handcrafted by a master jeweler, no matter the style, size, shape, or budget.

THE BEST PLAN FOR YOU?

The best plan for your engagement ring budget will probably take into account a number of factors.

First and foremost, it has to be based in reality, whether you’re paying up front or charging a credit card or financing: you have to determine the limit of what you can spend without cutting into other important financial needs and plans. If you’re on a tighter income, it may help to make a timeline, putting aside as much as you can from each paycheck for a certain period of time, then deciding your budget is what you’ve been able to save in, say, a year.

Second, it’s probably wise to consider if you actually need to spend as much as you’re able to spend. While you could empty your savings account and still get by, a realistic budget may not be that drastic. This is where it’s helpful to think about the 2 months’ salary rule or national averages, or even norms within your friend group.

At the same time, start to research what your significant other actually wants. Whether you’re shopping together or if it’s a surprise, get a sense of what the expectation is, from your loved one directly or through covert-tactics. Most will be happily surprised to find out that what their intended wants is well within reach. There is so much room for flexibility when it comes to design and budget with custom engagement rings, so even if the first choice is a little bit too pricey, there’s likely a way to bring the price down with a different (but still beautiful) center stone.

Finally, come up with a budget where you’re comfortable. Having an idea of what you want to spend will make you a more confident buyer, less stressed about the price tag and more comfortable talking to a jeweler about what your expectations are.

DISPELLING THE MYTHS

When it comes to engagement rings and budgets, there are a lot of myths that can lead you off track. So as you’re sitting down with your spreadsheets or skimming her Pinterest boards for inspiration, it’s important to know which myths are true:

• A lower price tag is a better deal: Not exactly true. You may see one jeweler offering a 1ct solitaire diamond ring for $3000 and another jeweler offering a 1ct solitaire diamond ring for $6000. In diamonds, quality is everything, so ask for official third-party certificates from reputable labs like GIA, IGI, or AGS, ask where the ring was made (was it made by a professional jeweler on-site or stamped out in a Chinese factory?), ask all the questions you can about quality and value, not just the bottom dollar.
• Invest the bulk of your budget in the diamond, not the setting. True, in most cases. Setting preferences for engagement rings differ wildly from one couple to the next. One way to make a smart investment is to preference the center-stone’s importance over the setting, understanding that you can always re-set a diamond. If your realistic budget doesn’t quite add up to cover the perfect diamond and the glitziest diamond-encrusted setting in the world, going a little simpler with the setting can help you bring the pricetag down. Then, after five or ten years of marriage, when a new, flashier setting is more affordable to you, choose it as a beautiful anniversary gift. There are cases, however, where a thoughtfully designed setting can be a smart way to enhance a more petite center stone on a tighter budget.
• You can optimize your budget by shopping online: Not true. When people talk to jewelry professionals about “do it yourself diamonds,” jewelers react the same way physicians do when people start talking about self-diagnosis on Web-MD; sure, online diamond database sites offer some helpful information just as Web-MD can give you some general health tips, but it’s not the same as a real education. The 4Cs of diamonds are used to categorize diamonds, but they hardly represent everything you need to know to be a professional diamond dealer. In reality, diamond database websites are the place where wholesalers dump the diamonds that jewelers won’t buy, and jewelers won’t buy them for a reason–even within diamonds with the same 4Cs, one may look too small for its weight, another may have inclusions in all the wrong places, another may glow highlighter-green in UV sunlight, and another may have been cut in an angle that creates a bowtie-shaped shadow in the middle of the stone… the list goes on. Finally, most independent jewelers’ diamond prices are very competitive with what you can find online, with better quality diamonds to boot!
• Diamond-alternatives are a great way to find savings: True, depending… Gemstone engagement rings are growing in popularity after a few decades where diamond rings made up the vast majority of the engagement market. Many brides-to-be want colorful gemstones in their engagement rings. If you know that’s what she wants, great! If you’ve never heard her talk about how much she wants a blue and green engagement ring… take that as a hint (she doesn’t). Gemstones are generally more affordable, carat per carat, than diamonds,but obviously it’s an apples to oranges comparison, as large, rare precious gems are as valuable and desirable as diamonds. When it comes to low-cost white-gem diamond alternatives (like Moissanite, cubic zirconia, other imitations, or white sapphires), it’s definitely more of a person-to-person compromise. A few people will value the gesture of any engagement ring, regardless of quality, while most others will expect the commitment and symbolism that is associated with genuine and authentic jewelry. Authenticity is generally considered to be a necessary component of value.
• Big chain stores offer the best deals and sales: Not really. When we hear the words “clearance sale” on a commercial, or see that “up to 70% off” ad banner, we’re tempted! But again, there’s a big difference between savings and value. Big chain jewelers fall into two categories: first, there are the premium brands that up-charge for their label or their famous packaging, and second, there are the mall-brands that mass-produce jewelry. The premium brands don’t do discounts. The mall brands sell cheaply-made jewelry that has little value, no matter how low the cost. All mega-retailers have unthinkable overhead, including shipping fleets, real-estate costs at dozens of retail locations, third-world factories, call centers, and constant advertising. Even online mega-retailers have enormous costs with their marketing, factories, web-designers, and graphic artists. Small, independent jewelers don’t have these costs, and the quality of the work presents real value in that their products are actually valuable and well-made, without a 75% markup for a little blue box.

THE BOTTOM LINE ON ENGAGEMENT RING BUDGETING:

Ask for help coming up with your number. This is a big purchase. It’s likely your first time buying a diamond ring (or maybe you love love, and this is your third go-round– we don’t judge!), so it helps to talk to people with experience. Talk to your significant other about his or her expectations, talk to your financial advisers whether they’re professionals or just your really responsible dad, talk to jewelers about what you can get for your money, and listen. You’ll likely get a few different pieces of advice, but you’re better off navigating the waters with a little help.

Ready to get started with your engagement ring process? Contact Secrète Fine Jewelry today. Stop by our DuPont Circle store in Washington, DC, or our Wildwood Shopping Center store in Bethesda, MD, or, if you’re outside the DC area, we’re happy to start the process online!