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How to Buy an Engagement Ring Without Debt

So, you’re thinking about asking one of the most important questions ever:

“Will you marry me?”

But no man wants to ask the love of their life to marry them empty-handed. Yeah . . . I’m talking about buying an engagement ring. And whether you pick out the ring together, surprise her with your incredible taste in jewelry, or ask her best friend for tips, you have to know your budget. So, how much should you spend on an engagement ring?

Believe it or not, an engagement ring can be one of the biggest purchases of your life, outside of maybe a house or a car. And according to The Knot Jewelry and Engagement Study, the average cost of an engagement ring comes in at $5,500!1 (Did you hear a low whistle there or was that just me?)

If you’re feeling a little overwhelmed, that’s okay! Take a deep breath, because I’m going to teach you how to buy an engagement ring that makes her eyes light up—without going into debt to do it.

But before I get into the ins and outs of buying an engagement ring, let’s start with the basics:

Make an Engagement Ring Budget

You guessed it—no shocker here! The first step to buying an engagement ring is being intentional and making a budget.

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One month’s worth of your annual income is usually plenty to get a great ring, but definitely no more than two to three months of paychecks. And if you’ve got a family heirloom you’d like to use, that’s great! You can get the stone reset, get a new diamond, or keep it as is. The options are endless.

But just because you want to buy your girl the perfect ring doesn’t mean you need to go into debt to do it. Yeah . . . I’m talking about credit cards, financing or a bank loan. Run! Far, far away! I repeat: You do not want to get credit or financing involved.

Pay as much as you’ve budgeted for in cash. Why? Because many times, paying with cash will get you a better deal! There’s not much that has more markup than jewelry, and paying with cash opens the door to negotiation.

Many big box or chain jewelry stores aren’t known for handing out discounts. (After all, they have an image to protect.) But it never hurts to ask for a percentage off your purchase. They’ll either say “not a chance” or they’ll surprise you with a “yes.” Because even the salespeople in the jewelry store know the truth: Cash means money in their hands right now, not the possibility of payments in the future.

Any sort of payment options like layaway, financing or jewelry store credit cards are rip-offs—thanks to those ridiculous interest rates. Saving and paying cash will save you a ton of money in the long run! And let’s be real: That ring will look a lot less sparkly if it comes with years and years of payments.

How to Shop for an Engagement Ring

Alright, now that you’ve figured out your engagement ring budget, it’s time to start shopping. I’m talking about how to buy an engagement ring. Are you ready? (It’s okay to be nervous—this is big!)

Finding the right engagement ring for your sweetheart and your budget is going to take some time. You don’t want to rush the process. Make sure you do your research!

Remember, buying an engagement ring comes with a lot of questions. But that’s a good thing. So, before you hand over your stack of cash, let’s dive into what you need to know when it comes to engagement ring shopping:

The Four C’s of Diamond Rings

You don’t have to be a gemologist (it’s a real thing, Google it) but you will get a better deal if you know how to tell the quality of the diamond. Those C’s stand for cut, color, clarity and carat weight.2


This is the most important of the Four C’s. It refers to the angles of the diamond, not the shape. Cut is all about how well the stone interacts with light, which is what gives a diamond that beautiful sparkle we all love. Who doesn’t love a good sparkle? A diamond can have great color, clarity and carat, but if the cut isn’t right, it won’t have that signature sparkle it’s known for.


Diamond color is graded on a scale from D (colorless) to Z (light yellow). Although the variations in color are so subtle they’re pretty much invisible, they can make a huge difference in the price.


No diamond is perfect. But the fewer imperfections a diamond has, the more expensive it will be—so keep that in mind when it comes to your engagement ring budget. Those imperfections can be internal (inclusions) or external (blemishes). A diamond’s clarity is graded on a scale from “flawless” to “included.”

Carat Weight

A heavy stone equals a hefty price tag. Don’t get caught up in the carat-weight debate. People like round numbers, so you’ll pay a premium price for a 1.00 carat. Save money by going slightly lower, say 0.85–0.95 or 0.65–0.73. The untrained eye can’t tell the difference! Really! If you’re really concerned about the size, a quality jeweler can always make a diamond look a little larger through setting and shaping. Halo ring for the win!

What about the shape, setting and band?


Diamonds can be cut into several different shapes: round, cushion, princess, pear, marquise, oval, emerald . . . the list goes on and on. It’s really all up to your future fiancée’s taste and your personal budget.


The setting is how the diamond is placed on the ring: solitaire, pavé, halo, channel, or tension. Make sure you know what your future fiancée likes—or more importantly, doesn’t like. When in doubt, ask her what she likes, or consult one of her trusted friends if you’re trying to keep things hush-hush.


Then there’s the ring band, which can come in yellow, rose or white gold, platinum, silver or palladium. Just like with most things, each metal has pros and cons. For instance, platinum is a little more expensive than gold, but it’s also more durable. Gold is classic, timeless and easy to polish, but it wears down faster and could require more maintenance (a.k.a. more money) over the lifetime of the ring.

Don’t get ripped off.

Before you even step into a store, ask your recently engaged friends for jeweler recommendations and check out online reviews and Better Business Bureau ratings. A reliable jeweler will offer a GIA (Gemological Institute of America) or AGS (American Gem Society) certification with the ring.

Last but not least: Don’t forget to ask about their return and exchange policies—you don’t want to get stuck with a ring your fiancée doesn’t like! That would be a sad day for everyone.

How to Save Money on an Engagement Ring

I know what you’re thinking . . . Am I being cheap if I want to save money on an engagement ring? Absolutely not. In fact, you’re trying to get the most diamond for your buck. And that’s a great thing.

So, how do you find a ring that fits your budget? You have to shop around! You probably won’t find the best deals at those popular jewelry stores in the mall. Try checking out stores outside the norm. These are local or small jewelers in your area, pawn shops, Etsy shops (yep, those too) and even diamond brokers. These places are in the business of selling you a beautiful diamond, but not trying to rip you off—most of the time.

Now, let’s talk about other ways to save. Here are three out-of-the-box ideas that can really help you make the most of your budget:

Buy more than one diamond.

I know what you’re thinking: Rachel, why would you tell me to buy more than one diamond? I can barely afford one! Stick with me here. Instead of shelling out major cash for one big rock, you could save money by choosing a ring with several smaller diamonds. A three-stone or side-stone ring that uses smaller diamonds can give you a lot more bling for your buck.

Choose a different stone.

There’s no rule that says you have to buy a diamond engagement ring! This is one of the biggest ways to save. If your soon-to-be fiancée prefers something unique, consider other precious gems like red rubies, sapphires or emeralds that come in blue, pink, green and yellow. They’re stunning and sturdy—and a lot less expensive than diamonds . . . but just as beautiful.

Use a family heirloom.

As I mentioned before, you or your fiancée-to-be might already have an engagement ring without knowing it! Ask your families if there’s an antique or heirloom ring sitting in someone’s jewelry box. Spend a little money on a professional cleaning or a new setting, and put the money you would’ve spent on the ring toward the wedding, honeymoon or your savings! Don’t forget to find out the love story behind that ring too—it’ll make your girl feel super special as she adds your own love story to that ring’s history.

Don’t Forget to Insure the Ring

Don’t skip the insurance. Sure, it may add some money to the total cost of the ring, but it’s definitely worth insuring. Plus, you worked really hard to save up for that beautiful engagement ring—you don’t want anything to happen to it. So, let’s talk coverage options:

Homeowners or renters insurance

Usually your policy will let you add the value of a pricey item like an engagement ring to your coverage. Just make sure you know exactly how you’re covered. (Some policies only cover the ring if it’s stolen or damaged in a fire.) Make sure your policy amount is large enough to cover the replacement cost of the ring.

Actual value policies

This will cover the value of the ring minus its depreciation over time. If the ring cost $5,000 and is lost six years later, the insurance policy will only cover a portion of that. Womp. Womp. (That’s why this insurance option is the cheapest to purchase.)

Replacement insurance policies

This type of policy will refund the market value of the engagement ring. If you bought a ring with a solitaire setting and a diamond with beautiful cut and clarity, you’ll be refunded for the current market price of that ring. You could end up getting more money than you initially paid (based on appreciation).

And if you two are planning on getting engaged, odds are you’ve talked about what your next steps are. Find out if your future fiancée wants the ring to be a surprise or if they want to go ring shopping with you to drop some helpful hints. If that’s the case, more power to you! You can cross the ring off your list and put your efforts into planning that extra-special proposal. Just remember to set a budget, stick to it, and pay cash no matter what!

It’s About the Marriage, Not the Ring

I’ll never forget the day my husband, Winston, proposed. It was one of the best moments of my life—and I want you to have that same great start as you go into your marriage!

Remember: If you’re intentional with your budget and know how much to spend on an engagement ring, you’ll be off to a great start! But at the end of the day, a ring is just a symbol of the love you two share. The size, cut or setting of the engagement ring has absolutely nothing to do with having a long and happy marriage.

Ready to get started on engagement ring budgeting? Great—download the EveryDollar app!  Not only will it help you save for big ticket items like an engagement ring, but it can help you and your future fiancée start learning how to handle your money together.

By saving a little at a time, you’ll spend less time worrying about how you’re going to pay for a ring and more time planning a proposal you’ll both remember forever. Try it for free today!

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Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a #1 New York Times bestselling author, financial expert, and host of The Rachel Cruze Show. Rachel writes and speaks on personal finances, budgeting, investing and money trends. As a co-host of The Ramsey Show, America’s second-largest talk radio show, Rachel reaches 18 million weekly listeners with her personal finance advice. She has appeared on Good Morning America and Fox News and has been featured in publications such as Time, Real Simple and Women’s Health magazines. Through her shows, books, syndicated columns and speaking events, Rachel shares fun, practical ways to take control of your money and create a life you love. Learn More.

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