Engagement Ring Budgeting: How Much Should You Really Spend?
Finding the Right Balance for Your Forever Ring
Buying an engagement ring is a once-in-a-lifetime moment, but for many couples, deciding on a budget can feel overwhelming. Should you follow tradition? Spend as much as possible? Or simply go with what feels right?
The truth is, there's no single “correct” amount to spend. Modern engagement ring shopping is influenced by old customs, diamond standards, design choices, and even the type of precious metal you choose. Let’s break it down with this guideline so you can confidently set a budget that works for you.
Old Rules and Changing Traditions
For decades, many believed the “three months' salary rule” determined how much someone should spend on a diamond engagement ring. This idea wasn’t an ancient tradition, rather it was born (right after the great depression) from a De Beers marketing campaign in the 1940s. It was designed to boost De Beers’ diamond sales. While it successfully turned diamond engagement rings into a cultural norm, times have changed.
Today, couples are less concerned with following this formula and more focused on personalizing their purchase. In fact, many people now choose to spend far less than the old standard, with the average engagement ring cost in the U.S. priced between $2,500 and $6,000. The average cost of an engagement ring also varies depending on what state you live in.
Some couples choose colored gemstones, lab-grown diamonds, or even invest in a dream custom design diamond engagement ring. What matters most is creating a ring that feels meaningful and financially comfortable–not what a decades old ad campaign once suggested.
How to Determine Your Engagement Ring Budget
The key to budgeting for an engagement ring is to start by taking stock of your financial situation. Figure out your income, your savings, and any existing debt or large upcoming expenses (student loans, wedding, honeymoon, home, etc.)
This is a major purchase, but it shouldn’t come at the cost of long-term security. Financial advisers generally recommend avoiding credit cards or long-term financing plans for an engagement ring unless absolutely necessary.
Equally important is having an open and honest conversation with your partner. What kind of engagement ring do they actually want? Do they care more about the size of the gemstone and having a larger carat weight diamond, or better quality cut diamonds? Would they like a custom diamond ring?
Are they drawn to diamond rings with vintage settings, or do they prefer clean, modern styles? Shown are two vintage rings: a Burmese Ruby and Euro Diamond Vintage Ring and a European Cut Diamond Vintage Solitaire Ring.
The Role of Diamonds and the 4Cs in Budgeting
Diamonds remain the most popular choice for engagement rings, but their price points can vary dramatically based on the 4Cs: cut, color, clarity, and carat weight.
Diamond Cut
Diamond cut is the most important factor if you desire sparkle and brilliance. A well-cut diamond looks brighter and often appears larger, making it a smart place to invest more of your budget. Poor cuts appear dull, even if the diamond is high in carat or clarity.
Diamond Color
Diamonds are graded from D (colorless) to Z (light yellow/brown) Near-colorless natural diamonds (G-H) often appear just as white as higher grades, but cost less than colorless diamonds that are rated D-F.
Diamond Clarity
Clarity indicates the presence of inclusions (internal) or blemishes (external) in diamonds. Most inclusions are invisible to the naked eye. Clarity grades start with FL (flawless ) and go to I (included). Choosing grades VS2 or SI1 clarity will still give you a beautiful gemstone without paying for perfection.
Diamond Carat
Carat weight measures the diamond’s weight and diameter and significantly affects the price point (remember that diamond clarity, cut, and color still impact diamond prices). Choosing a gemstone that is slightly below a full carat diamond (like 0.90 ct instead of a 1.0 ct) can save thousands while looking nearly identical to the full carat weight. Heavier gemstones may also require sturdier ring settings.
Certified Diamonds
Diamonds that have been certified by GIA or AGS will command a higher price tag than uncertified diamonds. GIA created a grading scale to provide a more reliable standard and to give consumers a more dependable and accurate rating. This certification guarantees the authenticity and quality of your natural diamond. A certified diamond ring is shown below.
Diamond Shape
The diamond shape can affect both the cost of the gemstone and the style of the setting. The round shape is the most popular and brilliant, but is also the most expensive per carat. A round setting remains fairly consistent with both demand and price tag.
Choosing an oval, pear, or marquise shape will make your diamond appear larger per carat. Market style trends can also impact their final cost.
The popularity of cushion and princess cut shapes fluctuates with current trends and styles which impacts their price points.
Diamond Alternatives
Lab-grown diamond prices will cost less than a natural diamond even though they look identical. The resale market of a lab-grown diamond is significantly less due to their abundant availability. Gemstones like moissanite, sapphires, or rubies can be an affordable option as a diamond alternative. Pictured are moissanite, sapphire, and ruby engagement rings.
Choosing a Custom Ring
Custom-designed engagement rings have become increasingly popular. While some assume custom means it will be a more expensive ring, that’s not always true. Working with a jeweler to design your perfect ring lets you control every detail, from the diamond quality to the setting and precious metal choices. This makes it possible to stay within your budget while creating something truly unique.
Custom rings also allow for sentimental touches like the incorporation of heirloom stones or engraving meaningful details which is something that standard rings can’t offer. The timeline for a custom ring is typically longer than buying one at the jewelry store, but many couples find the personalization worth the wait.
How Ring Settings Affect Budget
The type of ring setting also plays a big role in the overall ring price. A simple solitaire setting is typically the most affordable, while elaborate designs like the halos, three-stone, or pave bands with additional diamonds, will add to the price due to the extra materials and craftsmanship. Examples of the solitaire, halo, and three-stone, and pave engagement rings are below.
For couples working within a tighter budget, choosing a minimalist setting and focusing on the center stone diamond’s quality can create a timeless, elegant look. Those wanting maximum sparkle without a large center stone can consider buying halo settings, which make the diamond appear larger without significantly increasing the overall cost.
Precious Metals and Price Differences
14K gold (yellow gold, white gold, or rose gold) typically is durable and the most affordable choice.
18K gold contains more pure gold, making it richer in color and slightly more expensive, but it is also softer.
Platinum is considered a premium precious metal due to its weight and durability. It resists tarnish but comes at a higher price point because of the purity of platinum (while gold contains more alloys varying by the karat). Platinum pricing is also influenced by the commodity price of various precious metals.
Your choice of precious metal should complement the diamond’s color, the type of setting needed, and the wearer's style, while fitting comfortably within your engagement ring budget.
Final Thoughts: Building the Right Budget
Deciding how much to spend on your diamond engagement ring/wedding ring isn’t about following outdated rules. It’s about balancing tradition, personal style, and financial comfort. By understanding the impact of the 4Cs, exploring custom designs, considering setting styles, and choosing the right precious metal, you can create a stunning ring without unnecessary financial stress.
In the end, the perfect engagement ring is one that reflects your love story–not just a national average or a number on a price tag. When you are ready to begin your wedding planning, come see us at E.D. Marshall & Jewelers for thoughtful guidance from our trusted jewelers to help you choose your engagement ring. Let us help you find your diamond engagement ring and wedding band that are as meaningful and enduring as your commitment to each other.