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How much should you spend on an engagement ring?

28 January 2021

How much should you spend on an engagement ring?

In the lead-up to Valentine’s Day, many young lovers start to ponder if the time is right to pop the big question. Along with plucking up the courage to ask their partner, they’ll also be looking closely at their finances to see if they have enough to buy their beloved the perfect engagement ring – one that may even help a proposal get the right response. If you’re one of the many contemplating whether to take your relationship to the next level, you may have asked yourself, ‘how much should I spend on an engagement ring?’

Let’s make it clear from the start that there is no right or wrong amount to spend on an engagement ring. Things like personal taste and staying within your budget set for yourself (and hopefully with your partner-to-be) should be the primary drivers. After all, there’s no point putting your relationship under intense financial stress early on in your marriage.

Any engagement ring carries a certain weight of expectancy. What will your partner think? Will it help seal the deal? It will also be the most obvious sign of your announcement that gets proudly shown off to friends and relatives, and most likely shared on socials.

An engagement ring is right up there on the list of life’s big purchases. Apart from the significant financial investment, there’s the emotional investment – the ring is a symbol of your relationship and future together. The ring you choose should mean something to you both – be it the story behind the ring, the design, the stone, the setting, etc – but it really doesn’t need to cost a fortune.

Like most big purchases, it’s best to review the state of your finances before you buy an engagement ring. With the average engagement lasting around 22 months before the happy couple walk down the aisle, you should also weigh up what expenses will be on the horizon. Will you be moving in or buying a home together, planning a big wedding, etc.? If there’ll be more demands on your money in the short-term future, it might be worth being realistic about what you can afford to spend on an engagement ring.

There are no defined rules when it comes to setting a budget to buy an engagement ring. You can purchase a ring with your surplus savings, a personal loan or via lay-by, but how much should you spend? One method that’s widely known and has been shared over the years is the three months’ salary rule. The basics of this rule is that you calculate how much you’d earn over three months and put that towards an engagement ring. Using this method along with Australian Bureau of Statistics data could mean the average Aussie ends up having around $12,000 as a budget.

Knowing what others pay for an engagement ring may also help act as a bit of a guide, although everyone has their own unique financial circumstances. Just don’t use celebrities as your yardstick – Kim Kardashian scored a ring close to $10m! Of the wedding industry surveys we found, research indicated the average Australian couple spent around $5,000 – $6,000 on an engagement ring over the last few years.1, 2

Since buying an engagement ring can be such a significant cost and a very personal choice, it’s not surprising that many couples decide on the ring together. It certainly takes the heat off those who know very little about rings and diamonds. One survey indicated that 20 per cent of couples actually bought the ring together. They were also more likely to share the cost of the ring, or at least discuss the budget with each other prior to buying.

3 simple rules to buying an engagement ring

Rule 1: Do your research and work out what’s most important to you and your partner. For diamonds, think about the four Cs: cut, colour, clarity and carat (referring to the overall quality characteristics and size of the diamond).

Rule 2: Buy through a reputable jeweller – especially diamonds! You want the quality you’re paying for. Just make sure you protect your investment with adequate insurance.

Rule 3: Don’t stress! There are so many different options that cater to all kinds of tastes and budgets that there’ll be a ring that’s going to be perfect for both of you.

There is no hard and fast rule guiding how much you should spend on an engagement ring. It’s best to spend time researching and discussing with your partner what best suits your situation and what will symbolise your love for each other for years to come.

Sources:

https://www.easyweddings.com.au/articles/engagement-ring-cost/ viewed on 20/1/21.

https://www.qreport.com.au/blog/what-are-australians-spending-on-engagement-rings viewed on 20/1/21.

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