How to Budget for Your Engagement Ring
The engagement ring is, without a doubt, a big purchase. According to The Knot 2019 Jewelry and Engagement Study, the average cost of an engagement ring is $5,900. With such a hefty price tag, many couples are left with the dilemma of how to purchase an engagement ring on a budget.
There is a method to the madness, at least according to financial experts. While purchasing an engagement ring is an exciting step, a recent study by Blue Nile revealed that nearly 60 percent of respondents said it's something that keeps them up at night. In fact, almost 70 percent of buyers reported feeling more stressed about financing the ring than actually proposing to their partner. You can diminish the anxiety around saving for the ring with these practical tips from Douglas Boneparth, president of Bona Fide Wealth, and Katie Zimmerman, chief merchandising officer for Blue Nile. See the best tips for purchasing an engagement ring on a budget, below.
1. Determine Your Budget
When it comes to any major purchase, deciding on a budget is the most important step. Boneparth says it's important to consider all of your other expenses such as rent, groceries and bills—and then decide what you can afford to set aside for the ring. Once you've figured out a reasonable engagement ring budget, commit to putting money towards it. His pro tip? Establish a separate savings account where a set dollar amount is automatically swept into that account.
2. Think Longterm
Buying an engagement ring is a huge step, but it's also the first step leading up to other big financial commitments. After the engagement, you'll probably have a wedding, honeymoon, house and other purchases to make together. "You don't want to be uncomfortable after buying the ring," Boneparth tells The Knot. "You have so much more to do."
He says that it's important to see beyond the engagement ring and leave as much of a safety cushion as possible for later on. "It certainly doesn't make saving easier, but what you receive on the backend—the comfort of knowing that you can still cover an emergency expense—it's one of the best things that anyone can really afford to do for themselves."
3. Make a Timeline
Once you've come up with a number, the next step is setting a timeline for yourself. While the full budget may feel overwhelming, Boneparth says the best way to get a handle on your stress is by creating a plan. "The first thing we do with anyone who sets a financial goal for themselves—in this case, buying a ring—is to get control over their financial life," he says. "One of the tips we suggest is to quantify what the purchase is by time and cost. When would you like to propose and how much are you going to spend?"
For example, it you're getting a $6,000 ring (like the U.S. national average) and you give yourself six months to do it, you know you'll need $1,000 a month to make it happen.
4. Save, Don't Borrow
Before committing to any major purchase, Boneparth says buyers should follow through on the financial demands and understand what they're signing up for. While there are many ways to finance a ring, many require borrowing. "You have to know that you have the discipline to consistently make your payments," he says. "If you don't have that discipline and you clearly don't understand the language or what the fees are or the basic concepts of borrowing, my rule would be not to borrow."
5. Do Your Research
Once you have a handle on the financial picture, you can move onto the ring search. The first thing you need to do is figure out your partner's style. According to the study from Blue Nile, 33 percent of all buyers said friends and family were their number one resource when looking for an engagement ring. Knowing what your partner prefers will also help you hone in on the cost. Find out if they prefer a gemstone or a diamond, or a gold band or a platinum band. All of this information will help inform your purchase.
While some people make the ring a surprise, most couples work together to find the ring. The Knot 2019 Jewelry and Engagement Study found that 39 percent of those who were proposed to this year were somewhat involved in ring shopping by hinting at what they wanted. Twenty-three percent said they shopped and looked around with their partner, and eight percent said they were there when the ring was purchased. If you're making the purchase together or your partner wants to have a say in their ring, be sure to have an open and honest conversation about what they're envisioning.
6. Be Informed
So you have your budget, a financial plan, and your partner's preferences—now what? The best way to get the most out of your budget is to consult a professional. It's imperative to make sure any financial decision is an informed one, Boneparth says. "I often talk about there being three criteria for a decision: It needs to make sense, it needs to be affordable, and you need to feel good about doing it. You have to get a yes to all of those to actually have an informed decision in front of you," he says.
There are so many engagement ring options out there, which is why doing your research can help you make sure you're getting the best deal. Whether you check out Blue Nile's cheat sheet or Forevermark's "4Cs" guide or GIA's website, use all of the resources available to make sure you understand the ins and outs of engagement rings. "The difference between making an informed decision versus an uninformed or partially-informed decision is you don't get buyers remorse," Boneparth adds. "The question of do you feel good about doing it is a solid yes—and that's the piece that speaks to being able to live with that decision."
Of course, the best way to purchase an engagement ring that's on-budget is to prioritize—both the design of the ring itself and your financial goals. By prioritizing aspects of the ring, Zimmerman says jewelry experts can help you get the most bang for your buck. "Is size more important? Or is it the shape or the cut? We're able to help guide buyers to maximize what they have decided what that budget is going to be for what is most important to them."
It also helps to prioritize your finances as well, Boneparth adds. "Do you want to increase the price of the ring because of a certain characteristic you're looking for in exchange for maybe altering the timeline of another financial goal? Maybe it's worth spending another $1,000 on a ring because everyone is going to be happier and maybe you save $1,000 on your wedding expenses. Or maybe it's the other way around."
Whatever you decide, it all comes down to being informed and deciding what matters the most to you. Ready to go shopping? Check out our engagement ring buying guide or take a look at our online gallery of rings for some inspiration.