How much to spend on an engagement ring?

How much to spend on an engagement ring?

  • Never buy rings unless they are on sale

  • Consider a second-hand ring and get it refurbished

  • When it comes to diamond sizes – bigger does not mean better quality

  • Consider a family heirloom if available

  • Consider alternate options, like antiques

  • Does it have to be a diamond?

  • Consider fair-trade jewellery and recycled metals

  • Look at 5% of income if earning under $100k (as a max if you want a dollar guide)

  • Look at 10% to 15% of income if earning over $100k (as a max if you want a dollar guide)

  • Spend as little as possible!

  • The cost of the ring does not correlate to how much you love the person or the quality of relationship

If you can't be bothered reading on I discussed all of this on episode 106 of the My Millennial Money Podcast

I have slightly changed my number guides since the podcast and original blog post. I formerly used $80k as a line in the sand but this caused confusion. So it's now $100k for those wanting a dollar guide.

Act with haste and you will waste!


OK - you wanted to know how much to spend on an engagement ring. Please know that I’m not engaged, married, a jeweller or a diamond expert. Before you think how this person is qualified to speak on such matters, as an example I have 80-year-old clients who I help manage millions of dollars and I’m not 80. I use logic and reason peppered with some practicalities for any financial situations in ones’ life.

Like any big financial decision, do your research, be slow and considered. Otherwise, like anything – act with haste and you will waste!

Using a jewellery store

It was soooo annoying when she threw this overboard!

It was soooo annoying when she threw this overboard!

These places are like literally gold mines, for the store owners. Never ever buy anything from a jewellery store without it being on sale or negotiating the price. Most diamonds are marked up 300%. There have even been cases of products being marked up 1000%. The best way to find the best deal is to really research what type of diamond or style you are after. It might even be worth speaking to a boutique or private jeweller if you’re looking to spend over $10,000. Working out the type of diamond is the key here as that is where most the cost or (profit/mark up!) is. Also, pay cash – do not use Zip Pay, or Afterpay or any other interest free stuff.

Have a listen to this Podcast episode where we talk about using Afterpay!

eBay, Gumtree or Craigslist

Seriously, if you really want to get a deal on a diamond there are many people who pay full retail for a ring and for whatever reason – they end up online for sale. Perhaps you need to ditch the superstitious stuff in order to save thousands. Just don’t tell your partner hehe (jokes always be honest!). If anything – get the diamond cheap and get a new ring designed.

Diamond sizes

I’m not a diamond expert, so I’m not going to add much value here other than to say, just because it’s expensive and big does not mean it’s quality. You may be getting ripped off. From my limited search, you may be looking at around $4-$5k per half carat on a decent ring (retail price).

Family heirlooms & antiques 

This is not always an option but no amount of money can buy these rings if they come from your grandmother. I know several people who have got a family ring, had it restored and given it to their partner. It’s a beautiful & timeless story that does not cost a thing, other than some restoration perhaps of probably under $300! Is this an option for you?

Can you also go to somewhere that sells vintage rings at a lower cost than an new diamond?

How much to spend?

Queen B's ring is said to be worth around US$5m

Queen B's ring is said to be worth around US$5m

Basically, you should spend how much that you think your partner is worth… NOT. I would think the serious amount is no more than you are comfortable to spend or are able to afford at the time. You can always upgrade the ring at a later significant date in your life.

If you’re after some basic rules of thumb, I would suggest the following by using your annual income as a maximum.

If you earn under $100,000 per year (pre-tax), I would think you should keep your ring at no more than 5% of your salary.

5% of $50,000 = $2,500

5% of $60,000 = $3,000

5% of $80,000 = $4,000

If you earn over $100,000 per year, you probably have the capacity to move this to 10% to 15% (as a maximum).

$120,000 = $12,000 to $18,000

$150,000 = $15,000 to $22,500

It's also OK to run the 5% number right through if you need a categorical amount. So 5% of $160,000 is $8,000.

It would also be in your favour to use these % as the retail price and then get the rings on sale, at half price!

There is no right or wrong here

The above are guides. I would say if you did earn $160,000 and you spent $800 – I would call you cheap :) (other's would say smart... but it's your money so do as you wish. Just ensure you are well researched and you're not being stingy). That was a joke. I don't care what you spend - just don't go into debt for one!

If you are already in a defacto relationship and this decision is a joint one, you could use total household income as a guide – but again, don’t do anything dumb!

Why not try ethical?

Have a look at this website here, Ethical Jewellery Australia. They have some good information on their website. This is not a paid sponsor, I just googled them and they seem cool.