Today, we will explore the question that plagues us all — how much should you spend on the engagement ring?
This is an essential question for anyone who is looking to get engaged. Today we’re going to dive into some of the common myths out there. We want to unpackage these ideas and help you understand why they’re outdated and where these ideas came from. More importantly, we want to outline three ways to figure out what you should budget.
So, you’re thinking about getting engaged, and you start asking your friends or you do a little googling about how much money you should spend on the engagement ring. The most common answer you may find is you should spend 2-3 months’ salary on the ring. You may be wondering, is that true? Or is that just a guide?
Here’s the thing, the 2-3 month salary rule is marketing. It was created by De Beers, post World War II. The mining company made up this idea which serves one party–the business–but not necessarily yourself. Beyond the marketing, you may have heard this from your parents or friends, but let’s break this down.
How can 2-3 months’ salary be relevant across the board? We don’t all make the same amount of money. Also, the cost of living is drastically diverse depending on the city in which you live. A diamond is going to cost the same in Toronto or Kansas, but you have totally different lifestyles or expenditures in each place.
The next most common thing we hear is when someone comes in looking for an engagement ring, and they say they need a one or two-carat ring. It’s not necessarily that they’re thinking about how much to spend, but they’re concerned about getting at least a certain carat size, not really understanding what it is.
First, carat is the most meaningless concept out there. We did a whole video about what is carat size? So you can get into this idea in more detail. For now, take a look at these three stones. They’re different sizes, but they’re all one carat. They don’t appear the same because a carat is a measure of weight; it is not a measure of size.
It’s very common when you start looking at advertisements for stones, you will see the carat being posted with the image. A one carat is on sale for X amount, a two carat for XX amount. Because of that prevalence, it seems like a rule that you should get a certain weight.
We want to encourage our clients not to get fixated on the carat number or the carat threshold because it is a marketing trap. If you’re going to fixate so much on the carat weight, you’re going to lose out on the opportunity to discover the diamond that’s right for you.
Now that we’ve dispelled two of the most common myths, we want to talk about three valuable and helpful methods we’ve employed and continue to use with our existing clients.
For this method to work, we’re going to assume you’ve already got a rough idea of what you’re looking for from a style perspective. The range method is simply this: come up with a broad budget range you’re comfortable with spending. The key is broad. Think of something like, “I’m comfortable with anything from $4,000 to $8,000. $8,000 is not where I really want to go, but if I liquidated some stock, I could do it.”
Essentially, what we do is show you all your options side by side in increments. This way, you can see what different prices we can get you. The range method is a cost benefit analysis technique. The reason why we like this method so much is because it’s hard to see how far your dollar goes unless you’re looking at the diamonds themselves.
When you have an itemized price breakdown and you can see them side by side, it’ll allow you to tell whether or not you can see a sizable jump that warrants the spend.
Not everybody is going to end up extending to the top end of their price range. You may be very happy with what would be considered mid-range or low-range, but it’s a discovery that’s both highly personal and highly subjective.
In the range method, we’re assuming you already know what style you like. This is a little different. Using this method, you start with the style, but you don’t worry about the price at all. With a lot of our clients, we begin with an exploration and she picks out different styles. The starting point is broad as we figure out what she likes. Consider the look of the stone, or the size–whatever it is. From there, we can show all the different ranges.
If we made the ring with a mined diamond, it would put you in the X to Y price range. You could also do a lab-grown diamond or moissanite. There are so many different options to choose from. Intrinsically, when you see all the various budget ranges, it’ll help you narrow down where you want to land.
What’s great about the style approach is that if you are able to ascertain her dream design, there are so many different ways we can achieve that look. We’re not like our parents’ generation where it was diamond or bust. You could do lab grown, natural diamond, sapphire, topaz, moissanite–there are a variety of ways we can achieve a desired look with different price points because all these stones have very different price tags attached to them.
This last method is one of our favorites. For this one to work, you have to have a good sense of what you want from a style perspective. It’s a variation of the range finder. You’ll come up with a budget, but we’ll show you all the options within a given price range side by side, completely random. We will not mention what the stones are, we won’t mention what the prices are, we just let the client look at them. We want you to experience them. We want you to choose with your heart.
The whole idea is that all of them will work in your budget. You’re not going to feel uncomfortable or that you’re going to break the bank. What’s interesting is, we find the stone you like the best doesn’t necessarily mean it’s the most expensive. It often is not.
We’re so subjective in our color sensitivity or inclusion sensitivity. Sometimes a stone feels too big for one person but not big enough for another. What’s nice about the blind test is when you go into it completely open hearted, you don’t know exactly what everything costs. You’re just able to enjoy the rings for what they are, and then you leave it to your eyes to pick out what’s beautiful to you. Of course, we’re still going to make sure the wedding ring is in the budget range in which you want to spend, so it becomes a win-win.
What’s also great is, when you aren’t sure about which stone type to pick, we’ll throw a selection in there and we won’t tell you which one is which. You may just really like the look of something, and the budget is only a practical thing, so you’ll be able to blindly pick the center stone that best suits you.
So many will look at the engagement ring as a one and done, but that doesn’t have to be the case. With diamonds that are mined and grown, we give our clients the option to trade in their stone. We give them 100% back for whatever they paid for it, and they pay the difference with their upgrade. The whole benefit is that you get what you can afford or what you’re comfortable with now, but down the road, when you’re in a different financial situation, when you reach a milestone or a celebration, you can upgrade.
We love the idea of looking at your ring as something you can grow into as you grow in your relationship. We have many clients who love the trade in policy.
Perhaps there’s a style she loves, the ring itself is quite expensive, and it does require a certain size stone to pull it off. Sometimes we’ll build the engagement ring exactly as it’s designed, but we’ll put a placeholder stone as the centerpiece to be replaced later. It looks great, but it’s a temporary work in progress.
If you like the idea of the one and only ring, consider how she’ll be wearing this for the rest of her life. You really want to amortize that over her lifetime. If it means you’ll need to stretch your budget to get her exactly what she wants, go for it. You want to be somewhat comfortable, but when you amortize the cost of the ring over thirty, forty, or fifty years, the cost becomes more reasonable. Most of us will end up spending more money on a car or maybe a house, but those things will change, and the ring is something she’ll wear for many, many years to come.
It’s up to you to figure out where within that tension you’re comfortable. Take your time to consider all the options available to you. You can watch our videos. We’ve done one about how to get a bigger stone with no extra cost, comparing lab vs natural diamonds and diamond alternatives. We want you to understand there are way more options than you realize.
We hope this is a great starting point for you in figuring out how much you should spend on your engagement ring.