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You’ve probably heard of the two-month salary rule, but there is no infallible source from which it came. This old rule can be demotivating for people not comfortable spending that much money on a ring. It also puts pressure on people who choose practicality over luxury. 

How much you spend on your engagement ring depends on your situation and expenses. At Monty Adams, we believe that the true worth of an engagement ring is the meaning behind it. So, whether it’s a $1,000 or a $10,000 ring, what matters is that you’ve worked hard and saved for it. 

However, when it’s time to choose an engagement ring or creating a custom engagement ring, knowing what you’re comfortable spending can play an essential role because it helps you narrow down your choices. It’s a factor when determining the stone, the metal, and the style. 

At Monty Adams, we are always armed with expertise to help guide you on how to achieve the perfect unique engagement ring for your investment. After all, any purchase you make, for love or otherwise, is an investment. When planning to allocate money for a ring and show the ultimate investment by popping the question, it is important to research to make budgeting easier and find the perfect engagement ring for you and your beloved.

The general rules, myths and Current (and Out-Dated) Ring Budget Theories 

There are so many common myths and misconceptions about buying engagement rings that it’s hard to know how much to spend when shopping for your significant other. While there’s no one-size-fits-all answer for ring etiquette, we have helped nail down a few widely held and cost-related engagement ring myths. We explain the pros and cons of each to help you find the perfect engagement ring for your wedding budget.

Rule 1: The Salary Rule 

We all know the salary rule, right? If you don’t, the general ‘rule’ (and I use the term rule lightly) is that you should spend between one and three months’ salary on an engagement ring. The 1-3 month salary rule is probably the most popular (albeit outdated) to calculate how much you should spend on an engagement ring. The rule was created in the 1930s depression (very outdated rule indeed) from De Beers Diamond, that suggested men only spend one month’s salary after finding sales had dropped. 

It is probably the most popular rule (some may even say tradition) and the easiest to calculate. 

For example, if you make $60,000 annually, your engagement ring budget is $5,000 using the 1-month system, $10,000 using the 2-month system, and $15,000 using the 3-month system. 

That is the pro of the 3-month salary rule. The con? Well, it is too simple for the modern era and does not factor in a couple’s other financial commitments or lifestyle choices. It does not require a real budgeting plan but follows a simple formula. It is outdated and is not tailored to fit a budgeting scheme or even calculate the ring design or gemstones needed to create the engagement ring. Truth be told, engagement and marriage are different these days; they’re more individual and less about adhering to the traditional family with two kids, a picket fence and shared finances. Engagement and wedding budgets now factors in engagement proposal parties, honeymoons, an incredible insta-worthy wedding and other adventures such as travelling; It does not account for all the other exciting things a modern couple wish to achieve to live, love and grow, which is where the exciting life events rule comes into play.

Rule 2: The ‘Exciting Life Events’ 

The exciting life rule takes into account all the exciting, adventurous and often expensive things happening in your life, such as buying a new house, paying for a wedding, travelling and all the significant expenses to bring you joy as a newly wedded couple or as a newly joined family. 

The exciting life events rule allows you to budget more thoughtfully, not based on salary but on circumstances. Choosing your engagement ring design and selecting your gemstones can be overwhelming, and often you can be steered towards expensive diamonds or gems that you may need to go into debt to afford.  The exciting life events rule allows you to be realistic with your budgeting, armed with a budget when selecting your choices and still create the most beautiful engagement ring without the stress and burden of a huge credit card debt or spending three months of your salary. A great jeweller will help you find something you can afford without breaking the bank.

Rule 3: Focus on meaning over expensive  

You get the idea. If you look at the engagement ring as a symbol of love and commitment, the price tag becomes irrelevant. Of course, we know there are expectations and that sacrificing things you need to buy to purchase a ring is part of the marriage culture. But, if you abide by the rules even if your savings is not up to par, sinking yourself into years of debt to stay flashy is not worth it. 

Can’t afford a $10,000 Diamond Engagement ring? There are many ways to find a meaningful ring by playing different scenarios in your head. 

  • Is there an heirloom ring in the family collection that won’t cost me a dime? 
  • Can I set aside money every week for a year to buy a ring? 
  • Is there a less expensive gem than a diamond that I can customise with the help of a local jeweller? 
  • Combine the available balance of my three credit cards to buy the biggest diamond ring I can afford. 

 

Rule 4: Going with the crowd 

Going with the crowd is never a great option when purchasing anything. Keeping up with the Joneses (or is it the Kardashians these days? I never do know) is never a great way to start a marriage or a rule that should be encouraged in life. The Insta wedding photos of celebrity engagement rings with rocks the size of Dwayne Johnson and adorned more with gold than Mr T may make you question, “what is everyone else spending?” but others do not have your budget, your life or your love. But if you are asking this question, we’ve answered it for you…  

What’s everyone else spending?/average cost in Australia 

The average price of an engagement ring in Australia is between $3000 to $15000 but significantly varies depending on design complexities, carat, metal and side stones. A custom engagement ring jeweller will factor all your desires and needs into the budget. 

 

Rule 5: Budgeting based on the carat size 

Sure, budgeting based on carat size is more accessible, but does size really matter? Budgeting using carat size helps you nail down the gemstones available for your requirements. You can then see what setting, colour, clarity and cut or arrangement fits your carat size, but remember these factors can dramatically affect your engagement ring budget. 

Regardless of the 4Cs, there are specific qualities that we suggest you look for when selecting your 1-carat engagement ring including: 

  • It must be triple excellent – excellent cut, polish and symmetry 
  • 100% eye clean and flawless to the naked eye – 100% eye clean 
  • No fluorescence 
  • No brown, green, or milky diamonds (BGM) 

The con of this rule is that it hampers control over all other factors that alter the expense of your engagement ring. With that in mind, some people prefer buying an engagement ring based on the carat and select the carat based on the most popular carat size. 

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