Asking your partner to marry you is a major step in any relationship. And while popping the question might seem simple, there are a lot of choices to make: how and when you want to ask, what the ring will look like, and, of course, how you will pay for it. Whether you’ve had the proposal planned for months or are just starting to think about it, a trip to the jeweler may cause some serious sticker shock. Engagement rings can be pricey, but that doesn’t mean you need to break the bank on a diamond. There are several tips you can use to choose an affordable ring and save for this purchase.
Average Cost of Engagement Rings
According to a study by the wedding planning website The Knot, the average engagement ring cost in the United States is $5,500. However, this doesn’t mean that everyone is spending that much on a ring. More than half of the survey respondents said they paid between $1,000 and $4,000, while 1 in 10 spent less than $1,000.
You may have heard that you should spend the equivalent of three months’ pay on an engagement ring, but does that guideline have any merit? Actually, this “rule” for how much to spend on engagement rings stems from the Great Depression, when a diamond retailer was struggling to make sales. Their ad campaign encouraged people to spend a month’s salary on a diamond ring. The suggestion stuck, and over the decades, it increased to three months’ salary. That doesn’t mean that you must follow this advice, though — in fact, jewelers say that most people do not. Several factors can influence how much you might spend on a ring, such as the current market price for diamonds and metals, your income, where you live, and personal preferences.
There is no single answer for how much you should spend on an engagement ring; it is a deeply personal choice. If you are budgeting for an engagement ring, here are a few financial considerations to keep in mind and help you decide how much to spend:
- How much can you afford? Consider the amount you can feasibly save to put toward an engagement ring. If you choose to pay for a ring with a loan or credit card, determine how much you can comfortably pay toward the loan each month and be sure to work that cost into your budget.
- What does your partner want? If your partner hopes that their ring will have a certain carat weight, setting, or cut, do some comparison shopping to determine how much it might cost.
- How long do you want to wait? If you are ready to propose next week, you might have to select a less-pricey ring or use a loan to help pay for it. But if you are planning ahead for an engagement in several months or a year, you can spend more time saving for the purchase and may be able to spend more, if you want.
- What else do you plan to pay for? Remember that the engagement ring is just the first cost on the road to marriage. Depending on what you and your partner want, you might have some big expenses in the coming years, such as a wedding, honeymoon, or a new home. Overspending on a ring might mean making concessions on other purchases down the line.
How to Save Money for an Engagement Ring
Once you have settled on how much you would like to spend on an engagement ring, you can start saving. Take the amount you want to save and divide it by the number of months you plan to save to determine how much you need to put away each month. Then, try these tips to start growing your ring fund:
- Open a high-yield savings account for your ring purchase. These accounts offer significantly higher interest rates than traditional savings accounts, without early withdrawal penalties. Your money will work for you, earning interest until you are ready to purchase a ring.
- Schedule an automatic transfer on payday to a savings account dedicated to this purchase. If you move the money to savings right away, you will be less likely to be tempted to spend the cash.
- Skip dining out for a while — you’ll be surprised how much you save just by prioritizing home-cooked meals. Plus, you can make a date night out of it: Pick a favorite recipe with your partner, put on some music, and try cooking it together.
- Take stock of your belongings and consider selling some things you no longer need to earn extra cash. Resale apps and websites make it easy to sell clothing, furniture, home décor, and more.
- Use an app that rounds up your purchases to the nearest dollar and puts the change in a savings account for you. You might not even notice that those extra few cents are gone, but it will add up fast if you make a lot of purchases.
What Financing Options Are There for Engagement Rings?
When you are ready to buy an engagement ring, it’s time to consider how you will pay for it. If you have saved money for the ring, you can pay cash in part or in full. You can also finance the cost of the ring with credit. Financing options include:
- Credit cards: You can use an existing credit card or apply for a new one. If you opt for a card with a 0% introductory APR offer, be sure to read the fine print — terms and conditions can include penalties for late payments.
- In-store financing: Some jewelers offer no- or low-interest financing or a buy now, pay later program that allows you to pay for the ring in installments over the course of several months or years. Pay attention to terms and conditions, though. In some cases, a low-interest promotional period might be followed by a high-interest rate if you haven’t paid the balance in full.
- Personal loan: A personal loan is a good option if you want to borrow money that you can pay back over a set term, rather than using a credit card. These loans are available in a variety of amounts, terms, and interest rates.
Can You Get Engagement Ring Financing with Bad Credit?
If you have a low credit score, you may still be able to get financing to help you pay for an engagement ring. Many lenders will approve borrowers with poor credit (a score below 579) for a credit card or loan, but the credit will come with a higher interest rate or more fees than borrowers with very good credit. If you have several months or years before you plan to buy a ring, you can take steps to increase your score, such as making payments on time and paying down your existing loan balances. You can also save your money to pay all or part of the cost of the ring out of pocket. However, if you are ready to buy a ring as soon as possible, pay attention to the term, loan fees, and APR and choose the option that works best with your budget.
Additional Cost Saving Considerations
An engagement ring is something you or your partner will wear every day, but it doesn’t have to empty your bank account. Before you visit the jeweler, consider the factors that can influence the cost of a ring so you can get the most for your money.
- Cut: Certain diamond cuts cost more than others, on average. For example, round-cut diamonds cost 10-43% more than fancy cuts, which include cushion, princess, emerald, and more. If you want to get the most bang for your buck, consider choosing an elongated cut, like a pear or marquise, which can appear larger than a round cut of the same weight.
- Color and clarity: It might feel like you need to buy the whitest diamond with the very best clarity, but going down a grade or two will save you a lot of money. A near-colorless diamond with slight inclusions will be significantly more affordable than a flawless one, and the difference is not noticeable to the naked eye.
- Carat weight: Sizing down slightly can be very cost-effective. For example, if you are considering a 2-carat stone, you’ll find that a 1.8-carat stone looks about the same, but costs quite a bit less because diamonds with round-number carat weights are in higher demand.
- Metal: If you are set on a silver band, opt for white gold over platinum. They look very similar, but depending on market prices, platinum can be 40-50% more expensive than white gold. Palladium is another budget-friendly metal that is durable and looks similar to platinum.
- Stone type: Diamonds are considered the norm for engagement rings, but that doesn’t mean this stone is your only option. While most gemstones grow in worth over time, diamonds lose value because of high seller markups. Your diamond will be worth 20 to 60% of the original purchase price if you attempt to resell it down the road. There are several diamond alternatives that look the part but cost significantly less, such as moissanite or white topaz. Synthetic or lab-created diamonds look identical to natural diamonds, but can cost half as much. For a nontraditional look, you can even opt for colored gemstones such as sapphires or rubies, which become more valuable each year.
