How Much to Spend on an Engagement Ring and Why Natural Diamonds are the Best Investment

Undoubtedly, deciding on how much to spend on a diamond engagement ring depends on a multitude of factors, including your income, debt and future goals. Do you want a diamond that retains value in the long run?  What about a diamond that provides jobs and supports communities in remote parts of the world?  There are many factors to consider and guidelines that apply to just about every budget when considering the average engagement ring cost. We asked some jewelry experts whose job is to help couples find the ring of their dreams for advice on establishing a budget and navigating the all-important ring purchase. Check out their top five diamond engagement ring shopping tips below.

Read More: 15 Diamond Engagement Rings Under $5,000

1. What You Spend on an Engagement Ring Can Serve as an Investment and Asset.  

“While diamonds are not technically a commodity, mined diamonds are a natural resource with limited supply and are tradable around the world,” says Nicole Wegman, Founder of Ring Concierge, an online/private appointment diamond retailer. “Historically diamonds retain a high value over time, which is why they are passed down over generations.”

Tobias Kormind, the Managing Director for the online diamond seller 77Diamonds.com says that some clients have purchased diamonds as an alternative asset. “Natural diamonds have proven to be a very good store of value over the long term,” he says. “Like most investments, this always depends on factors such as the year in which you purchase the diamond, how quickly you need to sell it, and if it’s in a more obscure stone category. If you buy a good quality one carat round diamond, you are likely to sell it for a good price. If you buy a heart or marquise shaped diamond with a low color grade, high clarity but with strong fluorescence, you are likely to be offered very little if you try to resell it.” 

There’s also the social impact of your purchase to consider as well. Along with natural diamonds being stores of wealth, the natural diamond industry supports the livelihood of 10 million people worldwide, providing quality jobs, access to healthcare, education and social programs to communities in some of the most remote regions of the world.  This, in addition to the industry’s conservation efforts, protecting 3x the amount of land that they use for mining.

2. Don’t Base Your Budget on Averages

The average cost of a diamond engagement ring in America is $6,000, according to The Knot’s 2022 Jewelry and Engagement Study. The study also revealed that 25% of the survey’s respondents spent between $1,000 and $3,000 on a ring. Not surprisingly, that figure is greater in major cities like New York and Chicago, where buyers tend to spend more and purchase larger diamond rings. 

3. Know Your Budget for the Ring—And Don’t Go in Debt! 

Whether a couple is purchasing the ring together or as a surprise, it’s important to take a close look at finances prior to establishing a budget on how much to spend on the engagement ring. Consider your income, dept, expenses, savings and average engagement ring cost. Will you finance the ring? If yes, what monthly payment can you afford? You don’t want to go into debt for the sake of getting a ring that will “wow” your friends.

“Buying an engagement ring is a life decision, which means bringing your shared values into the decision,” explains Jennifer Gandia, owner of Greenwich St. Jewelers in Manhattan. “Of course, that means looking at the other expenses related to the wedding and other big life decisions, like home ownership, creating a family, etc. Partnerships no longer follow a linear trajectory of engagement, wedding, home, family, so there can be many big things to consider when the ring is being discussed.” That is sound advice. 

“Due to the sentimental and heirloom qualities of an engagement ring I do think it’s also important to consider those aspects when setting your ring budget and choosing your style,” continued Gandia. “Think about wearing it in ten, 20, even 50 years down the road, and if you’d want to pass it down.” The average price of an engagement ring at Greenwich St. Jewelers is between $6000 to $10,000.

“It comes down to what each couple is comfortable with allocating from their discretionary budget,” says Wegman. “Make sure you establish a budget you can comfortably afford without impacting other areas of your life negatively. Keep in mind all costs that may be associated with the purchase, like interest (if you plan to use financing) or the sales tax rate for your state so there are no surprises along the way.”

It’s a very individual purchase and a couple should consider what is most important to them when buying a ring. “Is the size of the central diamond or is the quality of the central diamond more important?” asks Kormind. “Some couples prefer a larger stone, while others like to go smaller and focus on clarity and cut. I would suggest looking through some educational material to understand the 4Cs in diamonds, as this will help them get a better understanding of what their central stone should look like. Once their main preferences are established, they can see how all these fit into their budget and choose the diamond engagement ring that ticks all the boxes.” His average diamond ring purchase is between $3,500 and $5,000.

At 77Diamonds.com, Kormind says that some clients have purchased diamonds as an alternative asset. “Natural diamonds have proven to be a very good store of value over the long term,” he says. “Like most investments, this always depends on factors such as the year in which you purchase the diamond, how quickly you need to sell it, and if it’s in a more obscure stone category. If you buy a good quality one carat round diamond, you are likely to sell it for a good price. If you buy a heart or marquise shaped diamond with a low color grade, high clarity but with strong fluorescence, you are likely to be offered very little if you try to resell it.” 

Still, Gandia cautions that only top-quality stones are considered as investment grade diamonds, and those are usually quite rare and expensive.

4. Find Affordable Diamond Engagement Ring Options

The good news is that whatever your engagement ring budget, there are more stylish and individualized diamond rings available than ever before. For those looking for something beyond the classic round or emerald cut, where size and quality play a big factor in the purchase, the retailer Catbird presents a range of designer-made diamond rings under $3,000. “Considering how personal the process of searching for a ring is, we think the price should be secondary to how a ring makes you feel, and what your aesthetic preferences guide you towards,” says Sriya Karumanchi, the store’s Marketing Manager. Among her favorites are the modern gold and diamond Brickwork Ring ($2,025) made exclusively for Catbird by WWAKE, a Brooklyn-based design firm. Another feminine option is a gold Paeonia ring by Sofia Zakia with a rose-cut diamond center, which retails for $2,850.

Whether your budget to spend on an engagement ring is $1,500 or upwards of $10,000,  there is a diamond ring that will suit your style. “In the end, the love you share is always what is most important,” affirms Kormind. “Buying a ring should be a joyful and special moment, not something that brings on financial insecurity.”

5. Aside from Monetary Value, Buy an Engagement Rings That Will Have Lasting Emotional Value

“Don’t be afraid to stretch your budget,” Wegman says. “You won’t regret it since this is something you’ll wear for many years.”

“We’ve never had a client come back and say they wish they’d spent less, but we do have clients come back often to upgrade their rings, wishing they’d spent more initially,” says Wegman.

“I would consider how much you spend on an engagement ring as an investment in your love story,” says Gandia. “It is the symbol of your commitment, imbued with all of the romance and sentimentality that our life partnerships ignite for us. It is that point in the arc of the story where a couple decides to embark on an adventure together and any time they want to look back on where it began, the ring is the talisman that symbolizes that moment.