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How to Budget for an Engagement Ring

Table of Contents

  • Bank Account Vs Expectations
  • Total Up Your Income
  • Total Up Your Expenses
  • Income vs Expenses


Engagement rings are a big life step. It’s a symbol of your love for one another and your commitment to someday marry. However, buying the perfect engagement ring can be a financial commitment, which means you want to approach it responsibly and make sure that buying the ring you are considering purchasing truly makes sense for your budget.

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You want your first steps toward marriage to start off on the right foot, so spending money you can afford on a stunning engagement ring that’s far beyond your feasible budget is unwise. Who needs that kind of financial strain, especially before you’re even married? Even though you will soon be combining your finances as a couple, that doesn’t mean you should spend more!

The wisest course of action is to sit down and come up with a budget for an engagement ring together. During this process, it’s also helpful to do research on engagement ring financing. Yes, it does feel a little less than romantic, but you know what feels amazingly romantic? When you have plenty of money left over in the budget for a fantastic honeymoon! All because you did a little homework ahead of time and discovered what you could realistically afford. That’s the kind of romance (and peace of mind) that comes with planning ahead! So, let’s get started.

Bank Account Vs Expectations

First, let’s accept that when buying an engagement ring, you have to weigh what you can reasonably afford to spend and determine an appropriate price range, against emotional expectations and what you know your lady would really love. A rational assessment and choosing not to go into debt over a diamond engagement ring is paramount. There are plenty of beautiful engagement rings out there that will fit both your fiancés tastes and your wallet, if you’re committed to looking.

Ideally, you want to start planning and budgeting well ahead of when you plan to purchase an engagement ring from a jeweler. Though this isn’t always possible, it’s definitely the best scenario because it gives you more time to save up for the perfect ring you really want, instead of settling for one because you can’t yet afford it.

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Total Up Your Income

If you’re trying to buy an engagement ring as a surprise, this might mean only tallying up your income. However, if you and your special someone are opting to look for a ring and purchase it together, then you would want to tally up the income for you both. Consider all sources of income, such as your regular take-home pay, interest or dividends, and any other income you might receive from somewhere, when calculating engagement ring cost as a deduction from your budget.

Then you can total them all up and see what is coming in on a regular basis. When you know the money you have coming in regularly, it makes it much easier to allocate a small portion of that toward a purchase. Keep in mind that there is an engagement ring budget rule floating around about allocating two month’s worth of take-home pay on a flawless diamond. However, as nice as that rule of thumb sounds in your head, and as nice a ring as that might buy you, on paper it may not be realistic. You should never spend what you can’t afford on any purchase, including an engagement ring. It’s also important to think about engagement ring insurance and whether or not you should include that in your budget as well. The financial strain simply isn’t worthwhile or necessary, no matter the brilliance, clarity, color, or carat, or cut.

Total Up Your Expenses

Again, if you and your lady love are purchasing together, then total up both of your expenses. You’ll want to get as accurate a picture as possible of what you’re paying out from month-to-month, so you know realistically what you have left over to spend without life getting financially uncomfortable over a gemstone.


Tally regular expenses like:


  • Your rent or mortgage payment
  • Your power, trash, and water payment
  • Your phone or cell phone payment
  • Your cable or internet payment
  • Your vehicle payment(s)
  • Your student loan payments if you have any
  • Your credit card payments
  • Your lawn care payments

    If you have any other expenses you pay on a regular basis, make sure you include those as well, even if they are quarterly or annually. All expenses affect how much wiggle room you have for making another big purchase involving a jeweler.

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    Once you’ve tallied up your fixed expenses, you should then tally up the rest of your expenses that vary. This includes things like how much you pay from week to week for gas and tolls, how much you spend on groceries or dining out, how much you spend on maintenance and repairs for your home and vehicle, and other things you spend money on. Maybe you have a coffee habit you can’t let go of. Total that up too! If you have money you contribute regularly to investments and savings, that should be included as well.

    Anything and everything outgoing needs to be totaled for the most accurate picture of how much you can put towards a gemstone. It’s important that you don’t underestimate these variable expenses because it can really hurt you later down the road. You can’t accurately budget for an engagement ring without a true picture of your financial health. It’s much better to estimate your expenses on the higher side and be pleasantly surprised at how much you have left over to spend, than to estimate on the lower side and find yourself struggling to make ends meet over a traditional or simulated lab diamond.

    Once you have all of your expenses totaled, you can divide those by 12 for the year and get a rough picture of what you average in spending from month-to-month.

    Income vs Expenses

    After you have totals for both income and expenses tallied up and averaged out, you can compare them to determine your average engagement ring cost. Obviously, you want your income to be greater than your expenses before considering any new fine jewelry purchase. If your expenses are more than your income, that’s a red flag for you to start making some budget cuts to put yourself in a better financial position for your future.

    If you make those cuts, you might find you have just what you need to start setting aside for your perfect engagement ring. In other cases, you may be pleasantly surprised to find how much extra cash you have coming in each month versus what you’re paying out and find you can begin to set aside a little more than what you expected to fit the price range of the diamond engagement ring you want to buy. That means you can afford to purchase a stunning engagement ring that’s a little pricier if you so choose, or sock away that extra cash to put toward your wedding rings instead.

    Consider Savings, Investments, and Future Job Opportunities

    Some other factors you can consider when creating a budget for an engagement ring is to tally up how much money you have already saved away in savings or investment accounts, that could potentially be used later down the road for bigger expenses that may arise, like planning your honeymoon, or buying your first home. You can also think about possible future job opportunities that may be on the horizon that will offer a pay increase.

    However, be careful using future potential pay increases as a benchmark for budgeting, because situations can change dramatically in a rapid period of time. That job you thought you’d be starting in two months may fall through, you might not get that pay raise you were expecting, and sometimes bonuses you thought were yours wind up out the window for reasons beyond your control. So, it’s very important to do your major budgeting plans based on actual income and expenses, and not future or potential income and expenses when calculating your average engagement ring cost.

    Ultimately, the best scenario when budgeting for the engagement ring and center stone is to buy only as much ring as you can realistically afford. It’s not wise to go into debt right out of the gate, especially when you’re not even married yet. That means maxing out all your credit cards just to buy that sizable carat ring is a big no-no. There’s also room for an engagement ring upgrade in the future if you prefer to stay modest now.

    Yes, you want to get the perfect ring you know your lady will love, because she will be showing it off to all her friends and family. But don’t allow that kind of pressure to put you into an untenable financial situation. You can budget for an engagement ring very successfully as long as you keep your expectations realistic and responsible. Not traditionally romantic, true. But who needs stress just to be traditional? Get a little wild and opt for responsibility. You’ll have a beautiful engagement ring to present to your lady that has the perfect amount of sparkle, brilliance, color and clarity, sans all the heartache that accompanies a financial burden.

    *Here at Diamond Nexus, we strive to provide valuable information while being clear and honest about our products. The Nexus Diamond™ alternative is a patented lab created diamond simulate that, among all simulants, most closely imitates the look, weight and wear of a diamond, with two exceptions – it is absolutely perfect in every way, and it costs significantly less. Price points and environmental facts expressed in this blog were taken from popular online retailers and may vary. Learn more about the environmental impact of mining by visiting our blog.

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