What is the Average Price of an Engagement Ring?

If a person proceeds to ask such a question, it usually means the person in question is interested in purchasing an engagement ring, which in turn corresponds to the question of the amount a person is willing to pay for an engagement ring. The question of how much should you pay for an engagement ring emerges when the person in question is cost conscious. Which is almost always the case. Since engagement rings, whilst technically a luxury item, it is also culturally and emotionally significant. And even though people do believe it is right to spend a considerable amount on a ring of engagement, several elements need to be balanced when proceeding to do so.

In this post, we will break down the key points that work into the question of what is the average price of an engagement ring, which works into the equation of what kind of price you should or ought to be paying for a potential ring.

The Answer: The Amount People Pay for an Engagement Ring is Always Changing

Look, there is no simple price formula or cost structure that a person can follow when making this decision. The argument of how a person should or ought to pay for an engagement ring in economic terms simply comes down to how much disposable income they have and how much of it they are willing to part with for a special ring for a special person.

Further, the amount of money that a person pays for a ring varies depending on a host of external factors. Take the most obvious factor that income levels have changed over the years. In the West, particularly in developed economies like Australia, real income has grown decade by decade, and even when one controls inflation, the amount of disposable income has risen on average. Hence what a person pays for an engagement ring on average, would naturally vary. This is the key point to consider when approaching the question of price concerning this fine jewel.

So on the point that no two engagement ring price is the same, the amount that a person wishes to allocate for a ring comes down to what kind of money he or makes and as we shall see, the type of income category he/she falls into, in addition to the question of value: that is the type of value the buyer will attach to the ring, and in turn to how much he values his partner. So the answer is that the average price a person will pay for an engagement ring depends. Income level, correspond to a host of factors, like the country he/she is living, in and their perception of a valuable engagement ring.

What about The Two Month Salary Rule?

The two-month rule for paying for an engagement ring is an old one. It is from a different time, when major diamond producers like De Beers, recognized the engagement ring market as a key vehicle to sell their diamonds. Thus marketing campaigns in addition push the importance or indispensability of diamonds for high-quality engagement rings and in turn the acceptability of paying a high price for an engagement ring.

Several things here. First, the fine jewellery market during this time, was quite raw, with few major players in the diamond jewellery industry. In addition, the diamond suppliers themselves were quite engaged in the business of selling diamond jewellery, indirectly or otherwise.

Things started to change over the decades, with the entry of new and more nimble jewellery companies, and critically the growing adoption of other precious stones like sapphires, rubies, and emeralds, which tend to be more affordable. Which naturally drove down the cost of an engagement ring. So rather than tens or hundreds of thousands of dollars, such fine jewels became more accessible to many more buyers.

At Brilliyond we recognize that engagement ring buyers come with different price expectations, which correspond to the value of the ring in terms of the materials that are used, which in turn reflect their income levels. In Australia income levels are understood according to specific tax brackets and depending on where you fall in this tier, the amount you are likely to spend on an engagement ring is likely to vary.

The average annual income for households in Australia goes from $ 18, 000 per year to over $ 180, 000. With those in the middle falling into the 45, 000 per annum to the $ 120, 000 – 180, 000 range. So for example, if happen to fall close to the average income range, be making around $ 50, 000 to 55, 000 per year, if one is to follow the two-month rule, the price of your engagement ring could come close to $ 100, 000. This is fine if you’re budget can handle it, and if you want to opt for something special, in terms of the gemstone type, size, and ring design. And no doubt fine jewellery companies would have no problem providing you with a range of options to make a ring purchase that fits this budget range.

But realistically, when it comes to buying a top-class engagement ring, of whatever gemstone types (unless you are looking at some truly exotic options) most top-quality gemstones for those wishing to take the pricier range and to base their decision primarily on a price range, based on the now somewhat outdated, but yet recognized two months (or for some three months) salary rule, then it is advisable to move close to $ 5000 to $ 10,000 mark.

However, in present times, the two-month salary rule no longer holds. And engagement ring buyers are free to go lower or beyond this prescription. As the factors that determine the value of the ring go beyond the mere price of the jewel.

Does the Amount you Pay for an Engagement Ring Matter?

This is a tricky question to answer, since, as we have already noted there is no fixed rule on the amount that can be paid for an engagement. The price a person pays is determined by a host of factors. And at a deeper level, since engagement rings entail a reasonable large cost, the question is it necessary to pay a premium price for such a ring, in addition to the deeper of what exactly amounts to a premium price? The straightforward to approach this question of does the amount you pay, actually matter comes down to the character and expectations of the person in question. The amount that is paid for an engagement ring comes down to who you are talking to. Which is the collective, will depend on several factors.

What Part of the World You’re From

This point is quite straightforward. If you’re a person living in a developing country, a nation that has a lower per capita income in contrast to those in the West, then you are likely to have different price expectations when it comes to an engagement ring. So much so, that depending on what part of the world you are from, the average price of an engagement ring will differ drastically from another. Thus the average price of an engagement ring that is a member of the OECD will be higher. Which in turn will reflect on the prices at that engagement rings will be marketed and sold in those respective countries.

Income Level

The most obvious factor is the economic status of the person, which is a function of the person’s income level. If you are an urban dweller, in a stable middle to high-income job, with good prospects, paying for an engagement ring in the $ 5000 mark or beyond. For those who don’t fall into this category, then it would go lower. And today many jewellery companies, including our own specialize in providing top-quality engagements which is a fraction of the cost. With good quality gold and even platinum rings that can be found below the $ 4000 – $ 5000 mark.

On the flip side, there are those for whom cost is not a factor: the actors, celebrities, millionaires and billionaires. Such individuals could pay anywhere from hundreds of thousands of dollars to millions. (Fun Fact, the Actress Grace Kelley’s Engagement Ring was worth over 38 million dollars). However these individuals form a very small portion of engagement ring buyers, and hence have little effect on the average price of an engagement ring.

Paying the Right Price for the Right Ring

The question: How much is too much can only be answered by the buyer, a decision that is greatly influenced by what he (the buyer) feels, and how he intends to communicate that through a special ring, combined with his income level. Our advice is to approach the question of the average price of an engagement ring in tiers.

Based on your income level what economic tier do you fall into? If you are an average income earner, in the $ 45, 000 – 55, 000 range (Australia) then it might be good to go strong with a diamond engagement with high clarity, and good colour. This would mean going for a VS1 graded natural diamond (very slightly included) with D colour (colourless diamond with virtually no shade). Which can be paired with a white gold band, in addition to accent stones, which can amount to dozens. This type of diamond engagement ring with high clarity tends to fall into the mid to high range and is a solid option for engagement ring buyers.

On the more affordable side, for those with a lower income level, a person who is making an income in the $ 18, 000 – 40, 000 range, again in Australia, can either go for a diamond ring, but with lower clarity, and smaller carat, or in turn, they can opt for a more affordable gemstone type, with a quality ring design. Options here are coloured gemstones, like the valuable pink sapphire ring, which comes in rich colours.

The key is to get the gemstone selection right. This is especially important for diamond engagement rings. Where the gemstone cost dominates the ring cost. As a side note, it is best to look GIA certified diamonds.

In Conclusion: It All Depends!

When it comes to the amount you pay for a ring, what matters is how much the ring-wearer values the ring, which often takes precedence over the mere financial cost of the ring. For sometimes a cheaper but better-designed engagement ring might be a better option than an expensive premium engagement ring. Making this decision of buying an engagement ring more interesting is the presence of coloured gemstones, such as amethysts, yellow, pink and white sapphires. Which in contrast to diamonds tends to be more affordable.

Ultimately the whole discussion about the average price of an engagement ring comes down to numerous variables which is a question of being able to balance numerous factors that will affect your purchasing decisions. It is a balancing act for sure. And it is important to keep things simple, closer to home, and recognize what matters to you and your partner. Whilst keeping a keen eye for gemstone types and customization, by doing so, you can pay the best price.