Smart engagement ring shopping and budgeting tips

Engagement rings have been around since the dawn of civilization and they continue to evolve. Today, they often represent a couple's promise to get married and form a lifelong commitment to one another. Whether both you and your partner will wear one, plus what the ring(s) will look like and symbolize will be decisions you and your partner make together - hopefully over many exciting conversations.

The funny thing is even before the actual engagement takes place, the partner doing the proposing already has to make quite a commitment - a financial one - just to purchase the ring. Not only can an engagement ring cost a lot of money, but since it’s something you or your partner may wear for the rest of their life, it's best to choose wisely. 

If you’ll be doing the proposing and are stressing about how to save for and choose an engagement ring, we've got you covered. We’ll discuss:

• How much does an engagement ring cost? 

• What should you know when you start shopping? 

• How do you find the right ring for your partner, and your budget? 

• How can Plenty help? 

  
  

How much does an engagement ring cost these days? 

FIrst of all, you may have heard of the "three months' salary'' rule for engagement ring shopping. How did that come about? Turns out this “guidance” evolved from a clever marketing tactic created by the de Beers diamond cartel as a way to sell more diamonds.

They originally promoted spending one month’s salary back in the 1930s, then increased it to two months’ in the 80s, and later upped it again to three months’ (Source: CNBC, 2023). Now that you know the underlying truth behind that spending guidance, take it with a grain of salt.

How much you’ll end up spending is going to be a personal decision based on your income, decision to pay by cash or a loan, your location, and the type of precious metal and gemstone that you choose.

Ultimately, there’s no right or wrong amount. But if you’re curious, most people compare about 10 rings before making a final decision and spend around $6,000 on average in the US (Source: The Knot, 2023).

Interestingly enough, the average engagement ring cost is trending downwards. For example, the average was $7,750 in 2019, that’s $1,750 higher than today. And a survey of over 1,000 people by CreditDonkey reported that over 80% of Americans feel a ring budget should be under $5,000. Lab-grown diamonds have also become increasingly popular.

Regardless of these stats, though, we recommend budgeting an amount that fits your financial situation, goals, and your partner's priorities. Talk about ring expectations with your partner, and what kind of budget makes sense based on your other large plans – like paying for a wedding, or putting a down payment on a house. 

Engagement ring shopping tips

Now let's talk about some of the factors that impact the price of your ring so you can decide on an engagement ring budget that you’re both comfortable with.

Do you really need a diamond engagement ring? 

Diamonds are a popular choice for proposals, but they’re certainly not the only choice, especially for younger couples. According to a recent survey by Minted, 74% of Gen-Z and millennials don't even expect a diamond on their engagement rings.

If your partner isn’t interested in a diamond, you’ll save a lot of money right off that bat. And with so much demand for unique rings these days, here are some ideas to consider. 

• Vintage: Is there a special piece of jewelry you or your partner inherited from a relative? It could make a stellar and eco-friendly engagement ring, either in its current form, or as a stone that can be re-set into a custom ring. If you don’t have a family heirloom you can use, see what’s for sale at a local antique store. You never know what stunning surprise you could find. And keep in mind, most rings can be resized by a jeweler for a perfect fit.

   

• Other gemstones: Colored gems are making a comeback too. But take durability into consideration, since your partner will likely be wearing that ring every day for a long time. Moissanite, aquamarine, morganite, ruby, sapphire and emerald are all beautiful and lasting choices. 

  
  

• Lab-grown diamonds: Interested in a non-mined diamond? Lab grown rings doubled in popularity between 2020 and 2022, when they made up 36% of engagement ring stones. Even celebs are jumping on the trend, and with good reason. Lab grown diamonds have the same chemical compound and appearance as mined diamonds, but at a much lower price point (as much as 50% less expensive than mined diamonds). They're also free from some of the ethical concerns around mined diamonds. 

  
  

What if you do want to buy a diamond ring? 

If you're one of the 36% of modern couples who do want a diamond engagement ring, here are the main factors that contribute to price. 

You may have heard people talk about "the four Cs." They're referring to cut, color, clarity and carat weight.

• Cut: This refers to the quality of how the diamond is cut. In other words, the more precise the cuts are, the sparklier the diamond looks. Most engagement rings should have a stone that is rated Excellent or Very Good in order to get that dazzling look. 

• Color: The less color, the better – at least in terms of the value of the stone. Diamonds are graded on their colorlessness. Faint yellow or brown tones decrease their value. 

• Clarity: This refers to the number of imperfections, or blemishes, that exist within the stone. Most diamonds have at least a few flaws, but ideally they won't be visible to the untrained eye. 

• Carat weight: This refers to the size of the diamond. While carat weight is the most obvious component of the 4Cs, it's just one factor in determining price. If a larger diamond is important to you, compromising on quality can help make it fit into your engagement ring budget. 

  
  

Have fun with your engagement ring

Engagement rings can be as traditional or unique as your imagination. If you easily get overwhelmed with too many choices, you may have an easier time sticking with pre-set rings. Jewelers are great at selecting a small number of rings within your budget that you can compare and choose from.

If creativity is more your thing, try an online custom ring builder that lets you choose the stone, style, settings, and band you think your partner will like best.

And it goes without saying, you don't have to do all the shopping by yourself. Chances are your partner will eagerly join you for some window shopping and drop lots of hints.

How Plenty can help 

Once you’ve talked to your partner about your budget and the type of ring you’d like to buy, Plenty can help you save for it. We’ll ask you a few questions about the kind of ring you’re looking for, and will estimate a price that you can then adjust to what’s comfortable. 

From there, we’ll help you save more money faster so that you can buy the ring of your (or your partner’s) dreams. 

At Plenty, we help couples build wealth, together. We go beyond budgeting, making it simple to invest, save and grow towards your future goals by unlocking access to the financial strategies of the wealthy. Ready to get started? Sign up for your free trial today.

  – Team Plenty