Current (and out-dated) Systems
Here are the popular existing budgeting systems:
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 was started by De Beers (who used to own all the diamond mines), and it is for that reason that many people are not comfortable with it.
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 system doesn’t include current debt, expenses that aren’t included in salary, the importance that the couple place on the engagement ring and their lifestyle.
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.
We believe however, that your budget should not be determined by an average, but rather based on your ability and needs. 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 $6,800 on a ring and there are couples who want to spend $100,000’s on their engagement ring. Limiting the budget to a national average is a really bad idea. For a better understanding of the 4c’s and how it works, click here.
Also, we strongly recommend picking a budget that is designed tailored to your personal requirements and not a number generated based on the entire country.
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 our 30 years of experience in the industry and the research that we’ve come across, 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: Being that their are many variables (in addition to the diamond’s size) that are built into the ring’s cost, it is 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: Most people will not only be concerned with size (carat weight), but will also care about a particular clarity, cut and color, and this system will greatly hamper the control on all the other details of the diamond.
What if I can’t afford to buy a ring?
This is a really important question that we are asked about all the time.
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 important and a monumental event, but it’s not a good reason to put your self in debt.
If you can’t afford it, wait. If you have excessive debt, wait.
If you can’t afford an expensive ring and only have a limited budget, buy a more affordable ring.
Engagement ring price brackets
Once you have determined your budget, you also need to understand which price bracket your ring falls within. 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.
Click here for engagement rings between $8,000 and $11,000.
Click here for engagement rings between $11,000 and $15,000.
Click here for engagement rings between $15,000 and $20,000.
Click here for engagement rings above $20,000.
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