How Much to Spend on an Engagement Ring

Basic Considerations for How Much to Spend on an Engagement Ring

The old adage of spending two months’ salary on an engagement ring is no more than an arbitrary guideline established by the jewelry and diamond industry. When budgeting for a ring, it is important to take different factors into consideration, including:

• Upcoming expenses including living costs and a new household.
• Cost versus quality of the engagement ring.
• Ring maintenance such as cleaning, resizing, shipping fees, and warranties.
• Reputation of the jeweler.
• Cost versus how closely the ring matches the bride-to-be’s preferences.
• Income and earning potential of both individuals.
• Credit histories and what an expensive luxury purchase may mean to other financial commitments.

There is no simple formula for deciding how much to spend on an engagement ring. The key is for a couple to work together to set guidelines they are both comfortable with and that won’t bankrupt them before reaching the altar.

Too Much or Too Little?

Some couples cringe at the idea of an engagement ring that costs less than $1,000, while other couples refuse to consider anything over $1,000. Engagement ring prices vary widely, from simple, small rings with price tags under $100 to hefty designer creations using rare stones that may cost $1 million or more. How much a couple spends depends on what they feel comfortable with. For example, a groom-to-be may want to make a statement about how well he can provide for his future wife, and therefore he’d prefer to purchase a more expensive ring. A woman who works with her hands frequently and knows the ring may become damaged, however, may prefer a more affordable ring that will not be as great a financial blow if it is damaged.

In general, spending either too much or too little on an engagement ring may make either individual feel intimidated, ashamed, or otherwise uncomfortable. The best way to resolve these problems is to discuss budgeting before purchasing the ring. Shopping within that budget rather than first finding gorgeous rings that may be far outside your current financial reach helps avoid disappointment and financial resentment.

What Else Should an Engaged Couple Budget For?

Naturally, an engaged couple must start budgeting for their wedding as soon as the proposal is accepted. What many couples don’t realize, however, is that they need to budget for far more than just a ceremony and if they’ve spend hundreds or thousands of dollars on the engagement ring, they may be restricting their financial freedom in other areas, including:

Couples have many additional expenses to worry about in addition to an engagement ring.

• Wedding details, including location, attire, guest list, decorations, vendors, and the honeymoon.
• Wedding ring styles, particularly for the groom, since he is more likely to wear only one ring and may prefer a more elaborate design.
• Household expenses, including purchasing a new home or moving if applicable.
• Student loans and other debts that will be assumed by both individuals.
• Children, since many newlywed couples start their families just a few years after the wedding.
• Education or professional development expenses such as business travel and graduate classes.

By considering all of these expenses before deciding how much to spend on an engagement ring, the couple demonstrates their commitment to financial solvency and independence along with their commitment to each other.

Payment Methods

Once a couple has decided how much they would like to spend on the engagement ring, the payment method must be determined. Depending on the jeweler, the couple’s credit history, and the overall cost, there are several options:

• Cash. This is the least risky option because the couple can only spend what they physically have and there are no interest fees or other penalties.
• Credit Card. Credit cards can give the couple payment flexibility, but investigate finance charges and interest rates beforehand and pay the balance as quickly as possible to avoid paying two or three times the actual cost of the ring.
• Store Financing. Many jewelry stores offer in-house financing, typically short-term arrangements with better interest rates than credit cards. Couples need to apply for the program and will be accepted based on their potential credit risk, but this is a good option if only a few weeks or months are needed to pay for the ring.
• Bank Loans. This is a risky option but allows a couple to not only purchase an engagement ring, but also to secure financing for other wedding expenses at the same time. Investigate all terms and conditions before agreeing to any loan.

But I Can’t Afford the Ring I Want

Many couples are initially disappointed to learn that they are financially unable to purchase the ring they want. There are many cheaper options, however, such as adjusting the quality or type of gemstones, choosing a less intricate design, or looking for a more affordable jeweler in order to meet their style preferences. The key is to remember that the engagement ring is a symbol of a much more important relationship – whether that symbol costs $1,000 or $10,000, the love and commitment remains the same.

Couples should decide how much to spend on an engagement ring only after careful consideration of their budget, future expenses, and payment options. While a particular price tag may seem cheap or expensive to different couples, the most important consideration is to purchase a ring that expresses the deep connection between the couple, regardless of its final price. That relationship, after all, is priceless.