It can be an exciting but overwhelming time when you’re considering proposing to your significant other. While it’s one of the biggest decisions of your life, other important decisions must follow too.
Before you determine when and where you’ll propose, as well as what type of ring you’ll buy, the first question to ask yourself is “how much should I spend on an engagement ring?”.
For decades, the answer has always been to spend two months’ salary on your beloved’s ring. However, with our current way of life, many are now questioning if this reasoning is still relevant in our modern world.
Keep reading to find out how much you should spend on an engagement ring, as well as the average cost of an engagement ring in Australia. Plus, you’ll learn insider tips for a more cost-effective ring investment.
The Two-Month Rule
If you ask a friend or family member for their advice regarding how much you should spend on an engagement ring, they may say the same thing: two months of your salary. While many think this is an ingrained tradition, the truth might surprise you.
The salary-related idea was actually embedded in popular culture in the 1930’s, during the Great Depression, by an advertisement from diamond cartel De Beers. The company controlled a large percentage of rough diamond output in the West, but declining sales spelled disaster for their business.
At the launch of the De Beers campaign in the 1930s, the recommended ring cost was one month's income. As incomes were on the rise in the United States in the 1980’s, however, the company’s advertisements started recommending two months’ salary instead.
In one advertisement, the slogan “Two months' income showed the future Mrs Smith what the future will be like” was featured. Another advertisement presented a single diamond ring on a dark background with the question, “How can you make two months' wages last forever?”
Not only did the De Beers advertisements establish the income-related amount to pay, but they also inextricably linked the diamond to the idea of an engagement ring.
Prior to the advertisements, diamonds were only used in 10% of engagement rings. Towards the end of the 20th Century, however, an impressive 80% of engagement rings contained diamonds.
The Average Cost of an Engagement Ring in Australia
According to a recent Australian wedding industry report, the average amount spent on an engagement ring in Australia is $5,367.
With Australians earning an average annual salary of $67,902, this figure is almost equal to one months’ salary.
If you wish to follow suit and take the one-month salary guideline into consideration, included below is a helpful list of what that figure may look like, depending on your annual income.
- $30,000: $2,500
- $45,000: $3750
- $60,000: $5,000
- $75,000: $6,250
- $90,000: $7,500
- $105,000: $8,750
- $120,000: $10,000
- $135,000: $11,250
- $150,000+: $12,500+
The Bottom Line
So, how much should you spend on an engagement ring?
When it comes to how much money you should invest in this important piece of jewellery, there isn’t a one-size-fits-all solution.
At the end of the day, you should only spend what you are willing and able to. For some, this may mean less than one month’s income, while for others, this may mean significantly more.
Age-old rules or traditions are becoming less commonplace, especially as couples are getting married later in life, house prices are continually rising, and other financial commitments (such as travel) have risen in priority.
How much you should spend on an engagement ring is very much a personal decision, and there is no shame in spending less – or more – than the average Australian.
Factors that Determine Engagement Ring Cost
When you’re shopping around for an engagement ring, you may notice that similar styles can vary considerably in price. This is because several subtle factors determine how much a ring will cost.
These factors are known as “the four C’s”: cut, colour, clarity, and carat.
The GIA (Gemological Institute of America) developed a diamond grading system to assist consumers in understanding what makes one diamond more valuable than another. The grades a diamond possesses in these four categories provide a clear indication of the diamond's quality, and therefore, how much it will cost.
Knowing the essentials of these gradings can help you compare two similar diamonds, but what matters most is how the diamond appears to the naked eye, as well as how beautiful the diamond is overall. As a buyer, having a basic grasp of the 4 C's is critical in this regard, so that you don't overspend on a feature that will go unnoticed.
Let’s explain each of these four C’s below.
The cut of a diamond is possibly the most essential feature of its quality that influences its beauty.
Diamond cut refers to the angles, proportionality, symmetrical facets, brilliance, fire, scintillation, and finishing characteristics of a diamond. These elements have a direct influence on a diamond's capacity to sparkle, as well as its overall visual attractiveness.
The cut of a diamond spans from Excellent to Poor. The better the cut, the more attractive it will look to the naked eye, and therefore the more expensive it will be. Alternatively, the poorer the cut, the duller a diamond will seem, and it will be priced accordingly.
The colour of a diamond is the second most essential of the four C’s. The hue of the diamond ranges from ice white colourless through to light yellow.
Unless you examine diamonds side by side, it's quite difficult to tell the difference between colour grades. Colourless is the rarest and hence the costliest. Yellow, on the other hand, is the least costly diamond colour since it is the most common.
Clarity is another key aspect of the 4 C’s and it relates to a diamond’s fine markings. Clarity has an impact on the rarity of a diamond, and hence the cost.
Flawless is the most expensive category of diamond, since it is the rarest. Included 3 is the least rare and hence the least expensive. Most inclusions are invisible unless magnified, however. Therefore, you do not need a Flawless category diamond in order to have a stunning engagement ring.
Metric Carats are used to weigh diamonds. Two Carats are roughly the same weight as the average paper clip, for example. Because a Carat is divided into 100 points, a diamond weighing 50 points weighs 0.50 Carats (also referred to as half a Carat).
Many wish to purchase the biggest diamond they can afford. Rather than limiting yourself to a specific diamond Carat weight, however, a diamond's overall appearance and brilliance should be prioritised.
This is because, regardless of its weight, a Poor-rated 1.5 Carat diamond will not sparkle as brightly or attract as much attention as an Excellent-rated 1.0 Carat diamond.
3 Insider Tips for a Cost-Effective Engagement Ring
A reputable and high-quality jeweller will have a wide variety of beautifully crafted engagement rings available at a range of price points. When shopping for an engagement ring, you shouldn’t feel pressured to purchase a ring that costs more than what you can afford.
Here are three insider tips to help you find the most stunning engagement ring without going over your budget.
- Less is More
Intricate ring designs are more expensive to make, so if you're on a tight budget, opt for something simple, yet elegant, like a solitaire design. Solitaire rings are attractive, timeless, and sophisticated – like this Round Brilliant Cut Yellow Gold Solitaire Engagement Ring. Because of their simple design, however, they are generally less expensive to purchase.
- Consider a Different Stone
Although engagement rings commonly feature a diamond, that doesn’t mean you can’t think outside of the box and seek a ring featuring a different gemstone. Aquamarine, Emerald, Morganite, Ruby, Sapphire, Tanzanite, and Topaz are just some of the other beautiful gemstones you can find in engagement rings.
- Choose a Different Metal
The metal used within an engagement ring also plays a significant role in its cost. Platinum, for example, is the most sought-after metal for engagement rings due to its hardness and naturally white hue. It is also one of the most expensive metals, however.
Gold, on the other hand, is quite traditional, elegant, and resilient – while it remains a less costly metal than Platinum. Therefore, consider an engagement ring in Yellow Gold, Rose Gold, or White Gold to potentially save some additional cost.
If you'd like to learn more about purchasing the perfect engagement ring for your budget, you can book a consultation with the team at your local Dracakis boutique here. Alternatively, you can start browsing our collection of stunning engagement rings today.