When getting ready to propose, one of the biggest items on the to-do list is to find the right engagement ring. Deciding how much to spend on an engagement ring can be a daunting task.

According to The Knots 2020 Jewelry & Engagement Study, the average cost of an engagement ring was $5,500. However, that doesn’t need to be the amount you spend. As you prepare to pop the question, here’s what you need to know about choosing an engagement ring that fits your budget.

Factors That Impact the Cost of Your Engagement Ring

When looking at engagement rings, there are several factors that go into the cost. One of the biggest factors is the type of stone you get. Diamonds generally cost more in an engagement ring than many other types of precious stones. However, if you want to save money, or if your partner prefers other stones to diamonds, you could choose a different stone.

When looking at diamonds, however, there are four factors (called the 4 Cs) that impact the overall cost of the ring:

  • Cut: The cut refers to the shape of the diamond, but it also includes how that shape interacts with light to provide a certain brilliance. Items like the reflection of the light, how it scatters and the sparkle involved are part of the cut.
  • Clarity: This is about how many blemishes, or inclusions, are visible when the diamond is viewed under 10x magnification. There are six categories of clarity, along with different grades within, for 11 different ways of classifying diamonds according to clarity.
  • Color: With a diamond, the lack of color is the most important feature in this factor. Those diamonds with a color grade of D are considered the clearest and are the most expensive. While there are also what are known as fancy-color diamonds, these are considered outside the color grading scale used for clear diamonds.
  • Carat: The size of a diamond is expressed in carat weight. Each carat is 200 milligrams and can be subdivided into points. Larger diamonds cost more than smaller diamonds.

In addition to the type of stone and its clarity and cut, engagement ring costs also include the type of metal used. Silver and gold are common, but you can also get platinum rings. The more expensive the metal – the thicker the band – the more your engagement ring will cost. It’s important to keep that in mind as you look for a ring.

Finally, any customization will add to the cost of the ring. If you get a relatively simple ring with a simple stone, it will cost less than a more adorned ring with multiple stones. A custom ring with a design chosen by you or your partner will cost even more. The more embellishment that goes into an engagement ring, the more it will cost.

How to Decide on an Engagement Ring Budget

There are various rules of thumb that have been adopted over the years, including rules that encourage you to spend between one and three months’ salary on an engagement ring. However, you don’t need to use a rule of thumb like that, especially if you don’t want to spend more than $5,000 on an engagement ring.

Here are some tips for creating a budget that works for you:

  • Talk to your significant other There’s no reason to have the ring on hand when you propose. If you do want to have a ring available for a surprise proposal, consider buying an inexpensive costume jewelry ring with cubic zirconia for the look and the pictures. You can then talk to your significant other afterward about a budget and what they want. It’s much easier to come up with a budget together and then shop together than try to make sure you get the right ring. Plus, since you’re making a life together and likely will share some budget items, it makes sense to talk about an engagement ring budget.
  • Consider your financial situation Figure out what you can actually afford. Sit down and review your monthly cash flow and debt. Decide whether you want to go into debt to pay for an engagement ring. Find out what payment plans are available. Some jewelers, like James Allen and Blue Nile, offer credit card financing that can make a ring more affordable. You might even be able to avoid interest if you pay off your credit card within a set period of time. When you know how much you can afford each month, without paying interest, it can help you decide how much to spend on an engagement ring.
  • Know your priorities Do you even care about an engagement ring? Some couples prefer to avoid the engagement ring altogether and instead focus on wedding bands. Others like the idea of getting something less expensive and spending money on other priorities, such as bulking up an emergency fund or taking a nicer honeymoon together. Think about how you can reach your shared financial goals without having an engagement ring break the bank.
  • Do a little comparison shopping first Before you finalize your budget, look around a little to see what’s available. Get an idea of what different rings cost by shopping around and comparing prices online. This will give you a realistic view of what you can get in your price range, and help you decide if you need to tweak your expectations in order to get what you want.

Related: Best Wedding Insurance Companies

Once you know what budget you have for an engagement ring, look for rings that fit that budget. Try to avoid going over budget.

Tips for Saving Money on an Engagement Ring

In order to stick to your engagement ring budget, look for ways to save some money. Here are some ideas for getting more bang for your buck as you shop for an engagement ring.

Choose a Previously-Worn Ring

Rather than starting with something brand new, consider getting a ring that’s been worn before. Engagement rings are available on eBay, as well as at pawn shops. When looking at these rings, however, it’s a good idea to get a certification from a gemologist who can verify the ring’s value.

If it fits with you and your significant other’s values, consider an heirloom. Perhaps your grandmother had a ring that could be passed on. This could be a ring with more meaning than something new.

Shop Online

Even if you want a new ring, you can still shop online. Websites like Blue Nile and James Allen offer you the ability to easily customize engagement rings based on setting, band, and stone. Plus, when you choose a reputable online retailer, you can be reasonably sure that you’re getting what you pay for – at a discount over a chain retailer in the local mall.

Choose a Non-Diamond Stone

Consider using a non-diamond stone for the engagement ring. If you want something a little more unique, you could use a different stone for the main stone and get smaller diamonds for accents. This can reduce the cost while giving you something out of the ordinary.

A twist on choosing different stones is to get a lab-created diamond. These can be less expensive than a natural diamond. Additionally, for those concerned about mining and conflict issues, a lab-created stone can fit with their values.

Bottom Line

You don’t have to break the bank to get an engagement ring for your significant other. Rather than following a rule of thumb and spending more than you need to on a ring, carefully create a budget that works for you and then look for ways to get a less expensive – but still meaningful – piece of jewelry that you can enjoy for years to come.



  • Miranda Marquit

    Miranda Marquit is a nationally-recognized financial writer and money expert. She has contributed to NPR, Marketwatch, Yahoo! Finance, U.S. News & World Report, FOX Business, The Hill and numerous other publications. Miranda is an avid podcaster and writes about money and freelancing at her website, MirandaMarquit.com [http://mirandamarquit.com/]. She lives in Idaho and loves reading, board games, travel, the outdoors and spending time with her son.