Current (and out-dated) Ring Budget Theories
Here are the popular existing budgeting theories:
See below for a rundown of each system and the pros and cons.
2 Months Salary
This system also includes the 1 and 3 months salary systems.
This is probably the most popular system for calculating how much to spend for an engagement ring. We, at Estate Diamond Jewelry, strongly discourage the “2 month salary” system, but here is how it works.
If you are making $60,000 a year, for example, then your engagement ring budget is $5,000 according to the 1 month system, $10,000 according to the 2 month system, and $15,000 according to the 3 month system.
This system, started by De Beers, has become particularly unpopular after people realized that they owned most of the diamonds.
Pros: Extremely simple to calculate. After so many years of people following this system, the 2 month’s salary has become almost a tradition.
Cons: This budgeting system is too simple for the modern era. The couple’s debt and expenses don’t figure into the budgeting plan, and neither do their lifestyle choices.
What is the average cost for an engagement ring?
Based on www.theknot.com poll, the average spend for an engagement ring in 2015 was approximately $5,800. The price has probably gone up in 2017 and we estimate that the average is about $6,800.
Your financial means should determine your budget rather than a worldwide average. No one should go into debt in order to pay off their engagement ring.
Pros: Extremely simple system. You both feel that you paid a “fair” or “average” amount.
Cons: Most people fall far below or far above the average. There are couples who can’t afford to spend $4,000, and there are couples who want to spend $100,000’s. Limiting the budget to a national average is a really bad idea.
For a better understanding of the 4c’s and how they effect the price, click here.
We strongly recommend picking a budget that is tailored to your personal requirements. Using a number generated based on the entire country is not suggested.
Average size of diamond in an engagement ring
1.10 carat diamond engagement ring
There are those who want to calculate their budget based on the size of the center diamond.
We’ve done a lot of research on this question and all of the statistics seem to have flaws, biases or a lot of guess work. Based on the research we’ve seen, we estimate that the average diamond size in the USA is 1.10 carats.
The average in the Commonwealth countries (UK, Australia, NZ and Canada) seems to be approximately 0.70 carats.
Pros: It’s a lot easier to control the budget while remaining within the couple’s budget bracket.
For example, a 1.10 carat, round, D color, flawless diamond will cost approximately $19,000 and a 1.10, round J color, SI2 clarity diamond will cost approximately $4,200. They are both 1.10 carats, but the price varies dramatically.
Cons: This system will leave a lot of people dissatisfied with their diamond. Consumers also care about clarity, cut and color. This budgeting method will greatly hamper the control on all the other details of the diamond.
What if I can’t afford to buy a ring?
The answer is really simple. If you can’t afford to buy a ring, don’t buy it. It’s that simple. The engagement ring may be a monumental item, but it’s not a good reason to go into debt.
If you can’t afford it, wait.
The rule of thumb: Buy a more affordable ring, if you can’t afford an expensive ring.
Engagement ring price brackets
Once you determine how much to spend on an engagement ring, you will need to understand the pricing brackets. Although there are many formats, below is the price bracket that we’ve categorized.
Click here for engagement rings between $1,000 and $8,000.
For engagement rings between $8,000 and $11,000, click here.
Click here for engagement rings between $11,000 and $15,000.
For engagement rings between $15,000 and $20,000, click here.
Click here for engagement rings above $20,000.
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There are already a few payment systems that people use that determine the “traditional amount” that couples should spend on their engagement ring. These systems have been made public by the big bloggers and websites that talk about budgeting for your engagement ring.