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How Much Should You Spend on an Engagement Ring?

Written by Jessica Steer
It’s getting to that time in your life, and you are looking at going engagement ring shopping. While this is one of the most meaningful purchases in your life, there is a lot of controversy about how much money you should spend. While the world is trying to change that and come out with alternative rings, other than just diamonds, it is still said you should spend around 3 months’ worth of wages on an engagement ring, but do you really need to?
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    What is the average cost of an engagement ring? What is a realistic price? How much are you actually comfortable spending? There are so many different options out there when it comes to engagement rings that it is easy to get overwhelmed so let’s go over some of the basics.

    Types of Engagement Rings

    While it really is impossible to go over every single type of engagement ring out there, there are 3 main types sold at diamond retailers. Solitaire, three stone, and halo diamond rings. Within these 3 main styles, you can go for different ring styles like:

    • Traditional and Elegant
    • Stylish and Outgoing
    • Outdoorsy and Nature Loving
    • Romantic and Timeless
    • Modern and Contemporary

    From there you have choices of precious metals (gold, platinum, or palladium) and color (white, yellow, or rose). The most common are rose gold, white gold, or yellow gold. Then, once you have chosen these two options, you can choose the setting. If you are not sold on one of the 2 main types, you do have some other options.

    • Prong
    • Peg Head
    • Integrated Head
    • Basket
    • Trellis
    • Compass Point
    • Bezel
    • Channel
    • Bar
    • Cathedral
    • Pave
    • Shank / Split Shank

    At just a glance, this is extremely overwhelming. Don’t forget, you also have to think about matching wedding bands, on top of just engagement rings. Thankfully most do come in sets. Also, the more you change on the ring, the more expensive it becomes. This is especially true if you are getting one custom-made.

    What are the diamond alternatives for engagement rings?

    Along with your traditional diamond engagement rings, there are also alternative styles that can be a lot cheaper than traditional rings. One of these options is lab-grown diamonds. Not only do they look like your traditional mined diamond, but they help you to save money. They also come in many different styles such as:

    • Round
    • Oval
    • Cushion
    • Princess
    • Pear
    • Emerald
    • Marquise
    • Asscher
    • Radiant
    • Heart

    Some other plus to using lab-grown diamonds is they generally have fewer defects. Not only that, but they are also more environmentally friendly. You have so many more options when it comes to colour, and they have a trackable origin source. Because they are man-made, they also tend to have a higher purity as well as brighter quality.

    Just like mined diamonds, man-made diamonds are sent to an independent gem lab and are seen by an expert in order to be certified. The difference between the two kinds of diamonds isn’t noticeable to the naked eye which helps to make the ratings on cut, clarity, carat, and colour of each stone impartial. Once the expert has gone over the diamonds and gemstones, they are given their quality rating.

    Another option for some people is eternity rings. While eternity rings aren’t traditional engagement rings, they are still beautiful and can be used as one.

    Average Cost of an Engagement Ring in Canada

    While this may be lower than you think, the average engagement ring cost is $3,500. This number is average for all of Canada, including large Canadian cities. There doesn’t seem to be any difference in the amount spent based on location, only really by income earned. For a good portion of Canadians, this amount is far lower than an average 3-month salary. For example:

    Yearly Salary 3 Month Salary
    $40,000 $10,000
    $50,000 $12,500
    $60,000 $15,000

    This shows that most people are definitely not following the 3-month rule, which makes sense. These amounts are a lot of money for an engagement ring and, with inflation increasing rapidly, people are being much more conscious about where they are spending their money.

    There is also the fact that engagement rings are much more accessible than ever with online shopping. Many different rings are only available online and are much cheaper. You can select the size as well online so you save the cost of having to get the ring sized. This is making online retailers much more popular that local jewelers.

    How much should you really spend on an engagement ring?

    In reality, how much you should spend on an engagement ring is a difficult question. It is really based on how much you can afford, the kind of ring you are looking for as well as the specific interests of your partner. An engagement ring is a very personal purchase and should be chosen with more in mind than just price.

    The style should be a large consideration. What would fit your partner’s personality? What do you know they would be comfortable wearing every day? The thing is, there are so many gorgeous options nowadays, some that don’t even involve diamonds. The main concern is if the ring is something that catches your eye.

    Is $10,000 a lot for an engagement ring?

    While it may seem like a lot of money, $10,000 isn’t actually that much for an engagement ring. An engagement ring budget of that size will be able to get a diamond of around 1.5 carats and give you plenty of options regarding setting and style.

    While this budget is above the average, it is actually a common amount spent when it comes to engagement rings. If you use this budget to purchase from an online retailer, you have even more choices regarding the types of rings and you get more for your money.

    Is $20,000 a lot for an engagement ring?

    Not surprisingly, there are plenty of options when it comes to engagement rings in the $20,000 range. This budget allows you to get a ring of at least 2 carats. Ultimately, it just depends on what you are willing to spend and what size diamond you want. A budget like this also gives you the option of a larger center stone, or a large engagement ring, in general. It also gives you different styles to choose from such as diamond shape and can also allow for a matching wedding ring.

    This amount to spend on an engagement ring is a lot and isn’t entirely necessary if it isn’t in your budget. You can find beautiful rings in all price ranges; the major difference is the carat size and the settings choices. This price range gives you a wide variety of rings as well as custom options.

    Can you get a loan for an engagement ring?

    In short, yes you can. When it comes to financing an engagement ring, there are quite a few options. You can either use a credit card, a personal loan, or, if the jeweler offers it, financing on the ring.

    Paying with a Credit Card

    If any of these are an option you are choosing, it is important to consider your choices. While using a credit card is the most convenient, it also has the highest interest rates. If you are unable to pay off the ring quickly, it may be in your best interest to discuss financing or even get a personal loan.

    Paying with a Personal Loan

    A personal loan is a convenient option as well. Most personal loans are approved quite quickly and offer the option to pay off the loan at any time with no penalties. You can usually put money down on the principle whenever you like as well. This makes the ring affordable by breaking down the payments into affordable monthly payments. Depending on your credit score, you can usually get a really good rate with a personal loan.

    Jeweler Financing

    Lastly is the option of financing with the jeweler. Most major jewelers offer to finance and oftentimes have interest-free financing for qualified buyers. These are usually for a set period of time like 6 or 12 months. It is important to make sure though, that if you choose this option, you are able to pay it off in the allotted amount of time. If not, the fees are usually high, and you could end up paying up to 50% more than what the ring is worth.

    Canadian Jewelers that offer financing

    Many major Canadian jewelers do offer financing options. Here are just a few:

    • Michael Hill
    • Spence Diamonds
    • Prestige Jewelers
    • Golden Tree Jewelers
    • Finest Gold
    • Paris Jewelers

    They either pair with some major credit card companies to offer low interest offers for specified lengths of time, or with independent lenders. The interest rates on these offers can be quite high.

    Other jewelers who don’t offer financing offer something called layaways. Layaways usually require at least a 20% down payment on the ring and, once the ring is paid off, it can be picked up. Different jewelers have different rules regarding layaways but if the item is not paid for in full by a credit length of time, the jeweler will then keep the item. With most, you can also get a refund within the first 30 days if you change your mind or realize that you will be unable to afford the item.

    Can you finance an engagement ring with bad credit?

    While you may not be approved for the best rates, either with a jeweler or lender, you can get a loan for an engagement ring with bad credit. Of course, it is important that lenders look at more than just your credit score. If your credit report shows that your most recent financing options don’t have payments made on time, you may not get approval or need a cosigner.

    It is also dependent on your debt-to-income ratio. If your monthly payments equal over 40% of your monthly income, then you also may not be approved. Having a high debt-to-income ratio can also lower your credit score so this could negatively affect you in more than one way.

    It is likely you are going to have to go to an alternative lender if you have bad credit. Banks and financing companies might be more hesitant to work with you, but online and alternative lenders are often experienced in working with those that have bad credit.

    What do you do if you can’t get a loan?

    If getting a loan of any kind doesn’t work for you then there are some alternative options, you could use like:

    • Getting a side hustle
    • Borrowing money from friends or family
    • Withdraw from retirement savings
    • Sell things you no longer need
    • Create a budget and spend less monthly

    In reality, though, purchasing an engagement ring shouldn’t put you out too much. There are plenty of beautiful choices that you can find online or in jewelers for an affordable price. You may even have to wait a bit longer until you can afford it or get approved for a loan.

    Can Spring Financial help?

    Not only can spring financial help you get a loan to purchase an engagement ring, but we also specialize in loans for those of all credit types. We offer loans anywhere from $500 to $35,000 that we can e-transfer in as little as a few hours after approval. Our application is easy to fill out and can be done online in just a few minutes. Whether you are having trouble getting a loan elsewhere or are just looking for some money quickly because you already found the ring, we can help. Apply online or give us a call at 1-888-781-8439.

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