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How Much Should You Spend On An Engagement Ring?

How much should an engagement ring cost you Love isn't practical, so we're not going to preach to you about buying an affordable ring. Yes, affordable is better, but feelings get in the way of logic.

There is a great irony about this piece. As the consumer, you are usually tasked with determining the worth of a business’s goods and services. That is to say, an engagement ring should clearly cost you whatever amount you can afford to pay.

Supply. Demand. Market forces. Yada yada.

In any case, we find today’s blog post justifiable since the outdated “two-months-salary-rule is widely accepted by the public” even today. The reliance on this arbitrary number proves that many consumers are a bit clueless about how much they should pay for an engagement ring.

How much, then, should an engagement ring cost consumers these days? If not two months’ salary, then how much?

The answer, as it turns out, isn’t as simple or convenient as you'd like to imagine.

The Practical Approach

Let’s begin with the practical approach to shopping for an engagement ring. We define the “practical approach” as the approach which provides the most utility for the buyer. In other words, the buyer spends what he or she can realistically afford without sacrificing too much quality.

Needless to say, every consumer has a different idea of “affordable.” Perhaps you can afford to spend $9,000 on an engagement ring while your neighbor can only drop half of that amount on a ring.

Maybe the next person can only afford to spend $6,351, the average engagement ring price as of 2017, a “significant rise from the $5,095 recorded in 2011.”

This approach works because you don’t have to go into debt to get your partner an engagement ring. The downside to this approach is that you don’t get to splurge on something that many people consider a once-in-a-lifetime purchase.

The Less Practical Approach

We’ll now move on to a less practical approach to engagement ring shopping. If you go this route, you’ll finance an engagement ring instead of paying for it upfront. We refer to this approach as “less practical” because you end up spending money you don’t have at the moment.

Just as in the case of the practical approach, we urge you to select an affordable engagement ring. Don’t haul off and spend $20,000 on a ring just because you’re buying it on credit and don’t have to pay for it immediately.

Here’s a good rule of thumb to live by if you’re confused about how much money you should borrow to purchase a ring:

If you know you couldn’t eventually save up the amount you’re looking to borrow, don’t do it. Period.

But if you know you’ll be able to pay back what you’ll borrow? Go for it. You might even see an increase in your credit score if you make your payments on time, in which case everybody—you, your partner, and the bank— wins.

The Impractical Approach

And now we arrive at the completely impractical approach. This strategy sees consumers chuck all of their better financial judgment out of the window in favor of lavish spending.

Hence we deem the approach “impractical.”

Is it, though, really so impractical to splurge on an engagement ring? We splurge on products and services all the time despite the fact that many of those items provide little utility. Those purchases don’t help us pay our bills, nor do they keep our refrigerators stocked.

So are we telling you to go out and spend an arm and a leg on a ring? Not really.

We are, however, telling you not to beat yourself up about spending more than you can technically afford on an engagement ring.

From a logical standpoint, you obviously shouldn’t do it. You know it. We know it. Everyone knows it.

Which is why you don’t need somebody talking down to you about your decision on the matter.

But from an emotional standpoint? Yes, you’re entitled to spend as much money as you desire on someone you love so much that you want to spend the rest of your life with that person. Love is special, so if you want to commemorate it with your wallet, do that. Far be it from us to judge you.

Moral of the Story: An Engagement Ring Should Cost You What You Can Afford

...unless, of course, you want to spend more than what’s affordable for you—and know that the purchase isn't affordable for you. Because, at the end of the day, buying an engagement ring is a personal choice. Only you can decide what the purchase means to you and your beloved.

Having said that, we at Gage Diamonds saw an opportunity to provide better financing options for engagement ring shoppers who are on a budget. Not everyone has the luxury to spend 1 to 3 months of their salary on their engagement ring. That’s why at Gage Diamonds we offer 0% APR financing for up to 24 months on your engagement ring purchase.

Unlike other financing companies, we are sister companies with our financing partner. We make our “interest” by sourcing our products at wholesale prices and offering them at competitive retail prices, which means we can offer 0% APR financing to our customers. At Gage, we want to get you into a payment plan that you can pay back without putting a burden on your current finances. So get out there and start shopping for an engagement ring

If you are interested in financing your engagement ring, wedding ring or other fine jewelry, please visit our financing page to learn more and apply.