How Much Should You Spend on an Engagement Ring? (Part I)

That's the question we often hear from a groom-to-be. How much? Nearly two decades of experience in the jewellery industry had taught us that when it comes to engagement rings, it's not how much that matters the most, but where and how you go about a ring is what makes all the difference.

By the time you finish reading this article, you'll have confidence and a clear understanding of the important steps in the process, questions you should ask, choices available to you and advice on how to make sure that the ring that you'll be holding in your hands is the one she'll say yes to. 

They say chance favours the prepared mind, but when it comes to a marriage, it's the happy bride that favours a prepared groom, so don't leave it to chance.

But first, you are probably wondering where the whole tradition of engagement rings comes from and why it matters.

A Very Brief History of a Diamond Engagement Ring

Bespoke Engagement Ring Made by Red Cloud Jewels

According to the American Gem Society, the custodians of diamond traditions, the first diamond engagement ring was commissioned by Archduke Maximillian of Austria back in 1477 and presented to the love of his life, Mary of Burgundy. The European aristocratic circles quickly picked up this modest gesture, and very soon, a new trend of diamond engagement rings was born. 

Over the years, engagement ring designs and styles evolved, but the sentiment behind them remained the same. The ring represents a formal agreement to future marriage. It is usually gifted by the groom-to-be during or shortly after the marriage proposal.

These days the engagement ring is a vital part of the process. A signifier of sorts that seals the deal and says to an onlooker that this pretty girl has been taken and she is off the market; in other words, she is engaged.

Bespoke Engagement Ring Designed and Made by Red Cloud Jewels

How to Work Out Your Budget for an Engagement Ring

You have probably heard it somewhere already. The convention dictates that you should fork out an equivalent of your two-month income on the engagement ring. What you probably have not heard is that this rule was popularised in the late 1940s in the United States after the British diamond company De Beers ran an effective "Diamonds Are Forever" campaign. It was a long time ago.

Back then, the cost of living to income ratio was a lot lower, and couples had slightly different priorities, aspirations and goals. The notion of saving up for a deposit on a house was not even a thing. 

So, you should not worry too much about the two-month-salary rule, but instead, work out a realistic budget. What can be achievable for you and your partner without having to spend the first couple of years of your marriage on baked bins and two-minute noodles?

Whatever the sum available to you ($3,000 or $20,000 or anything in between), it's not how much you have that matters, but rather how and where you will spend it, which leads us to the next critical point.

Where Do You Buy an Engagement Ring?

Buying at a Retail Store

Before you rush out to your nearby Westfield and start picking out a ring in a crummy shop with your back to a food court, consider the business model of the typical jewellery retailer in Australia. To afford the steep rent in the high traffic areas, the overheads and the staff, the retailer has to add a significant mark-up on each item they sell. To protect their profit margins, they pressure their suppliers to keep their costs down, which means that the items you see on display are usually mass-produced. They are designed to save as much on raw materials as possible. Even one gram saved on each ring adds up to a considerable amount of money when producing thousands of items. That is why, if you pick up a ring from a typical retail store and turn it over, you will see that it is hollowed out. This design trick translates to lower cost but ultimately also means lower quality and longevity. 

Buying Online

To an average observer, a sparkling diamond is a sparkling diamond, even better if it has a 50% discount tag attached to it. But if you know anything about diamonds (and you will just by reading the rest of this article), you know at least one thing. When it comes to diamonds, there is a lot more to them than just what meets the eye.

Shopping online for an engagement ring may seem like a great idea, but you need to keep in mind that it is not just size that affects the diamond's price. Other factors come into play when professional valuers grade the diamonds. So if you see a bargain online, check for inclusions (imperfections) that may be present in the stone. Those tiny inclusions are almost impossible to make out from a retouched photo posted online, so always ask for the original diamond certificate. There are a handful of diamond certifiers around the world, but the most prominent and trusted is the GIA, the Gemological Institute of America, which follows a strict grading system to evaluate diamonds.

When it comes to the final price, keep in mind that if you are purchasing a ring from an overseas website, you might have to pay additional import duty (5% of the cost of the ring) and GST (10%) on arrival to Australia. So do your homework and watch out for additional charges if you decide to go that route.

Commissioning an Engagement Ring

There is also a more thoughtful way to go about acquiring an engagement ring. And that is to commission it directly from a trusted local jeweller or a reputable jewellery house if you happen to know one in your area. Look for something like Red Cloud Jewels, where you will have direct access to the head jeweller and work with them together on designing and producing a one-of-a-kind ring made just for your bride-to-be. 

Apart from the custom-made aspect of commissioning a bespoke ring, there are many advantages of this approach. They collectively add up to the fact of your dollar going a lot further. Here are just a few of them.

  1. Experience and expertise. An experienced jeweller will work within your budget and help you allocate it according to your preferences. For example, you might get a better quality diamond by choosing a simplified band design. You could allocate 70% of your budget to the diamond and 30% to the band for a solitaire ring. If you want a halo ring, you might spend 50% on the diamond and 50% on the more intricate design of the band.
  2. Better choice. An established jeweller has access to a whole network of trusted suppliers, which means a much wider range of stone options will be available to you right off the bat. At Red Cloud Jewels, our head jeweller will also help you narrow down multiple possibilities to two or three, considering your budget and the design concept.
  3. Appropriate materials. Working with the jeweller directly, you'll also benefit from their expertise in choosing the suitable metal for the band. Our jeweller, for instance, will consider the skin tone and any known sensitivities to settle on the most appropriate material, whether it is yellow gold, white gold or platinum.
  4. Appropriate style. Any jeweller who has been around the block will probe further than just the standard "What doe she like?" type of question you would usually get from a sales clerk. Before diving into the concept design stage, our head jeweller will ask you about her profession (whether she works at an office or is involved in more physical labour), her typical environment and lifestyle. These insights are crucial because they will dictate the design direction, making sure that the ring could fit into her life effortlessly. 
  5. Appearance and value. When it comes to jewellery design, there is also another aspect to consider—overall appearance. You can have two diamonds of the same size (weight) on paper, but one will look much bigger than the other because of how they were cut. Again, an experienced jeweller will guide you in the right direction and help you make the right choice. Another valuable piece of advice that you would be unlikely to get from a casual sales clerk in a busy shopping mall.
  6. Alternatives. One thing worth remembering is that diamonds are not the only option for an engagement ring. You might want to consider designing a ring featuring a sapphire or ruby, especially if your future fiance is open-minded and likes something unique and unconventional. The possibilities are endless, so this could be another great option to explore with your jeweller and help your budget go even further: a $5k diamond is dwarfed next to a $5k blue sapphire.