Engagement Ring Cost: How Much Should You Spend?

Buying an engagement ring is one of the most meaningful purchases you will make. Beyond its emotional significance, it represents a considerable financial decision that deserves careful thought. While social media and marketing often focus on the size of the stone, the real question is: how much should you spend on an engagement ring, and how can you get the most value for your budget?

This guide explains the current market averages, factors that influence price, practical budgeting steps, and strategies to help you choose the perfect ring for your partner and be sensible with your finances.

What Is the Average Engagement Ring Cost?

The average engagement ring cost in Australia depends heavily on the type of gemstone and its quality. For natural diamond engagement rings, the range typically falls between AU$5000 and AU$15000. This range assumes a diamond of about 1.5 carats, which is close to the national average, but the final price varies with cut, clarity, color, and design.

However, the market has evolved. Couples now have more choices than ever:

• Lab-grown diamonds: These are chemically, physically, and optically identical to natural diamonds but generally cost 40–60% less. That price difference can mean upgrading from a 1.0 ct natural diamond to a 1.5 ct lab-grown diamond without exceeding your budget.

• Moissanite: This gemstone offers exceptional sparkle and durability, with a hardness of 9.25 on the Mohs scale, making it ideal for daily wear. Its price is often just 10–20% of a diamond’s cost for the same size, allowing couples to prioritize setting design or other wedding expenses.

Two rings of the same carat weight can differ in price by several thousand dollars due to cut precision, inclusions, fluorescence, brand markups, and craftsmanship. This is why “average price” is a guideline, not a rule.

How Much Should You Spend on an Engagement Ring?

There is no fixed rule for what an engagement ring “should” cost. The often-quoted three months’ salary rule is a marketing relic from the mid-20th century and no longer fits most modern lifestyles. Today’s couples are more focused on personal priorities, financial comfort, and long-term goals.

When deciding how much to spend, keep in mind:

• Your financial health – Look at your income, debt, and savings. A ring should be a joyful purchase, not one that causes long-term financial stress.

• Your partner’s expectations – Some people dream of a specific diamond cut or size, while others value unique designs, ethical sourcing, or a sentimental setting.

• Shared values – If sustainability matters, lab-grown diamonds, vintage rings, or alternative gemstones may align better with your priorities.

If your total wedding budget is AU$30,000, you might allocate AU$8,000–AU$12,000 for the ring. But if you plan a smaller wedding or elopement, you might decide to spend more on the ring and less on the event.

For couples with changing financial situations, a “starter ring” is a practical choice — for instance, starting with moissanite or a smaller diamond and upgrading later. Many jewelers offer upgrade programs, especially for lab-grown diamonds.

How to Create an Engagement Ring Budget That Works for You

A clear, realistic budget keeps you from overspending while allowing flexibility for design preferences. Here’s how to approach it:

1. Calculate your net monthly income – Use your after-tax amount, not your gross salary.

2. List your essential expenses – Rent or mortgage, utilities, transport, insurance, and debt repayments.

3. Account for savings goals – Maintain contributions for a home deposit, emergency fund, or future travel.

4. Determine discretionary income – The amount left after essentials and savings is your available spending pool.

5. Decide your allocation – Decide what portion of your discretionary income you are comfortable spending on the ring.

6. Set a budget range – A flexible range (e.g., AU$6,000–AU$8,000) helps when balancing design, size, and quality.

7. Talk with your partner – Whether you shop together or discreetly gather hints, knowing preferences in advance prevents costly surprises.

Tip: Always keep part of your budget for hidden costs such as resizing, engraving, or insurance.

How to Maximize Your Engagement Ring Budget

Once you set your budget, the goal is to make every dollar count. These strategies can help:

• Prioritize the most important 4Cs – Cut and color influence a diamond’s appearance more than clarity and carat. A well-cut 1.0 ct diamond can look brighter than a poorly cut 1.2 ct stone.

• Choose white gold over platinum – White gold offers similar aesthetics and durability but costs less, freeing up budget for a larger or higher-quality gemstone.

• Select a setting that enhances size – Halo and pavé settings can make a modest center stone look significantly larger. Three-stone designs add visual width and sparkle.

• Explore fancy shapes – Pear, marquise, cushion, and oval shapes often cost less per carat than round diamonds. Oval cuts, in particular, appear larger due to their elongated shape.

• Avoid milestone carat jumps – A 0.90 ct diamond can appear almost identical to a 1.00 ct diamond but cost much less due to price jumps at “magic sizes.”

• Consider lab-grown diamonds – These provide the same look and durability as mined diamonds at a reduced price.

• Look at diamond alternatives – Moissanite, white sapphire, or spinel offer sparkle with unique character at a fraction of the cost.

• Think outside traditional designs – Eternity bands, wide statement rings, or designs without a center stone can be distinctive, meaningful, and budget-friendly.

Key Factors That Influence Engagement Ring Pricing

Several consistent elements impact cost:

• Gemstone quality – The 4Cs remain the most significant price drivers.

• Metal type – Platinum commands the highest price, followed by 18K, 14K, and 10K gold.

• Setting complexity – Custom designs, hand engraving, and intricate settings require more labor and skill.

• Brand and craftsmanship – Independent jewelers may offer better value than large luxury brands, where marketing and prestige add significant markup.

• Custom features – Hidden halos, unusual gemstone cuts, or mixed-metal bands can increase cost.

Final Thoughts

An engagement ring is a deeply personal purchase. Its cost should reflect not just market averages but also your financial comfort, your partner’s style, and your shared values. Whether you choose a natural diamond, a lab-grown stone, or an alternative gemstone, the meaning behind the ring is what truly matters.

By setting a realistic budget, understanding your options, and making thoughtful choices, you can find a ring that offers beauty, quality, and emotional significance without financial strain.