How Much Should I Spend on an Engagement Ring?
Detroit, MI
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November 02, 2022 01:03 PM Eastern Daylight Time
Buying an engagement ring signifies a lifelong emotional investment in your future with your partner. An engagement ring purchase is also a significant financial investment. According to a 2021 BriteCo™ survey, 38% of respondents said that buying their engagement ring was the biggest purchase outside of buying a home or vehicle.
Making such a significant financial decision requires considering how much to spend on an engagement ring. Find out how much you should spend on this sentimental piece of jewelry by exploring the average engagement ring cost and how to budget for a ring you and your partner love.
What’s the Average Cost of an Engagement Ring in 2022?
Engagement ring shopping can be stressful and confusing, so to help you determine how much an engagement ring should cost, it’s helpful to know the average price of an engagement ring to use as a baseline.
The average engagement ring price in 2021 was approximately $7,011, an increase of 6.1% over 2020. Respondents of the BriteCo™ survey reported a slightly lower median price of $3,250, with 61% spending between $2,500 and $10,000 or more.
BriteCo research showed the average spend on earth-mined diamonds increasing 11.9%, from $7,197 to $8,053 in 2021. The average spend for engagement rings with lab-grown diamonds, by comparison, was $4,383, up 8.6% over 2020 prices. BriteCo data also showed that lab-grown diamonds increased their market penetration in the past year from 18.7% of engagement ring sales in 2020 to 28.4% of sales in 2021.
The average cost of an engagement ring also varies based on the buyer’s location. In the Mid-Atlantic region, including New York, rings cost an average of $9,343. States in the Pacific region, including California, saw an average spend of $8,626, and people in the central parts of the U.S. spend about $5,530 on average.
Deciding on Your Engagement Ring Budget
Deciding how much you should spend on an engagement ring involves understanding your budget for the purchase. Your income level, ring preferences and ring-related expenses like jewelry insurance all factor into how much you can and want to spend on your partner’s engagement ring. You can also use an engagement ring calculator tool to find out how much it will really cost to buy a stunning ring for your partner.
What Can You Afford?
The No. 1 consideration for buying an engagement ring is how much you can afford. In the past, many people determined how much to spend on an engagement ring based on salary. A 1930s De Beers Group marketing campaign suggested that a man had to spend at least three months’ salary on a diamond engagement ring or wedding ring to prove his devotion.
While this rule may have worked in past decades, many modern ring buyers choose to spend much more conservatively. Most buyers forgo the salary-based budgeting method altogether. But if you are wondering, “How much should an engagement ring cost according to salary?” CNBC recommends only 5% of your income go toward the purchase. If you make close to the median household income of $70,784, that would mean a reasonable ring budget of about $3,539.
What Materials Do You Prefer?
Ring materials such as metals and diamonds affect the amount you’ll spend on your engagement ring. When deciding how much to spend, you’ll need to consider what ring materials you and your partner prefer, how much they cost and how to choose an option that matches your aesthetic desires with a price you can afford.
Metals
In general, platinum and palladium rings are the most expensive metals, with gold, including yellow, rose and white, coming in second. Cobalt and tantalum are less costly metals, and stainless steel and titanium rings are the most affordable, which can help cut engagement ring costs and save money.
Diamond
The most crucial consideration in most engagement rings is the diamond — the most expensive element. Diamonds are typically priced according to the 4Cs: cut, clarity, color and carat. Cut refers to the way a jeweler cuts a diamond to reflect light. More intricate cuts, rated 10 on the American Gem Society (AGS) scale, will be more expensive than lower-rated cuts.
Diamonds with better clarity ratings or unique colorings may cost more than those with lower ratings. For example, a vivid yellow diamond ring may cost upward of $16,000 per carat, while a regular white diamond might sell for $1,000 per carat.
Generally, the more a diamond weighs in carats, the more it will cost. Diamond prices typically move between weight groupings. For example, a diamond weighing between 0.01 to 0.90 carats will cost the same, but the price jumps for diamonds weighing between 0.98 to 1.5 carats.
Where Will You Buy Your Engagement Ring?
Where you buy your engagement will factor into how much you plan to spend. A ring from a high-end jeweler like Harry Winston Inc. or Tiffany & Co. may cost tens of thousands more than one from a brand-name retail store or local jeweler.
Additionally, buying in-store versus online may offer different pricing options for engagement rings. The BriteCo™ survey showed that 81% of ring buyers prefer in-person sales, with 9% opting for online-only retailers and 11% purchasing from a known jeweler’s website.
Because of distribution costs, an engagement ring online may be 30% to 40% cheaper, but buying from a trusted brand or local jeweler offers more security.
Should You Insure Your Engagement Ring Purchase?
Your insurance premiums should also factor into your budget for an engagement ring. High-value pieces require higher monthly premiums. But compared to other types of insurance, getting specialty jewelry coverage is very affordable, ranging from 0.5% to 1.5% of your ring’s appraised value.
Many people believe that their homeowners or renters insurance will fully cover their engagement ring if something happens to it. But the average coverage provided by homeowners or renters insurance for fine jewelry is approximately $1,500. This falls significantly short of the average cost of an engagement ring, leaving you with substantial out-of-pocket costs if your ring is damaged, lost or stolen.
Dedicated or specialty jewelry insurance ensures that you are covered for the full replacement cost of the piece. Look for a policy with no deductible that also covers preventative maintenance and repairs.
It’s easy to get affordable engagement ring insurance online. Before applying for jewelry insurance, you must have your engagement ring appraised. You can get an appraisal online, at the jewelry store where you purchased the ring or through a professional certified appraiser. You will pay a small fee for the appraisal, typically between $50 and $150.
Buy a Ring Your Partner Will Love
Your engagement ring represents your commitment and connection to your partner. So, while there are archaic ideas about how much you should spend on an engagement ring, the ideal ring price ultimately depends on your budget and your partner’s style preferences.
Regardless of how much you spend on a ring, ensure that you get comprehensive jewelry insurance to protect your investment.
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