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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?”

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. According to The Knot Jewelry and Engagement Study, the average cost of an engagement ring clocks in at $5,900!1

It’s easy to see why finding the right ring for your budget can feel like an almost impossible task. With so many options and pushy sales tactics from jewelry stores, it’s tough to know how much to spend on an engagement ring.

So to help you out, here are some tips to save you time and money when buying the perfect engagement ring.

First things first:

Make a 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 pay no more than 2–3 months. Again, you can totally go less, but definitely no more. She may have a family heirloom or there may be something passed down that you can add to that. And that’s great! Use that! But don’t feel like you have to break the bank to show your love.

And whatever your decision, do not get credit or financing involved.

Pay as much as you’ve budgeted for in cash—that’s money you have, not money you think you’ll have later.

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 is going to save you a ton of money in the long run! And let’s be real: The pretty, sparklingness of the ring starts to fade as you have to make payments on the ring.

Also, paying with cash will get you a better deal! There’s nothing that has more markup than jewelry, so there’s always room for negotiation. And walking in with cash puts you in the driver’s seat to get a great deal and a great ring.

How to Shop for an Engagement Ring

Once you’ve figured out how much to spend on an engagement ring, it’s time to start shopping for that perfect, budget-friendly ring.

Finding the right engagement ring for your sweetheart and your budget is going to take time. So don’t rush the process, and do your research!

Buying an engagement ring comes with a lot of questions, and that’s to your advantage. Before you hand over your stack of cash, let’s dive into some of the most popular questions about 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:3


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 sparkle we all love. A diamond can have superb color, clarity and carat, but if the cut isn’t right, it won’t have that signature sparkle.


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 with your budget. Imperfections can be internal (inclusions) or external (blemishes). 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 .85–.95 or .65–.73. The untrained eye can’t tell the difference! If you’re really concerned about the size, a quality jeweler can make a diamond look a little larger through setting and shaping.

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 personal taste and 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, just keep it simple or ask what their tastes are.


Then there’s the ring band, which can come in yellow, rose or white gold, platinum, silver or palladium. Each metal has pros and cons. Platinum is a little more expensive than gold, but it’s 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 life 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 GIA (Gemological Institute of America) or AGS (American Gem Society) certification with the ring.

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!

How to Save Money on an Engagement Ring

So, you know how much to spend on an engagement ring and are feeling more educated on the stone and setting. But how do you find a ring that fits your budget? You’ll have to shop around! You probably won’t find the best deals at the popular jewelry stores in the mall. So make sure to check out local jewelers, pawn shops and diamond brokers in your area.

Here are 3 other ways to save by thinking outside the box:

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 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.

Don’t get a diamond.

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

Use a family heirloom.

As I mentioned you 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 Insure the Ring

You worked really hard to save up money for a beautiful engagement ring. It’s worth insuring! Here’s a quick overview of some coverage options:

Homeowner’s/renter’s 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 how you’re covered. Some policies only cover the ring if it’s stolen or damaged in a fire. And be 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. That’s why this insurance option is the cheapest.

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 what you initially paid based on appreciation.

And if you two are planning on getting engaged, odds are you’ve talked about what the next steps should be. 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!

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, happy marriage.

Saving money for an engagement ring is easy with our free budgeting app, EveryDollar. Just create a line item for it in the budget and you’ll be on your way! 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.

Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a two-time #1 national bestselling author, financial expert and host of The Rachel Cruze Show. She has appeared on Good Morning America, Today and Live With Kelly & Ryan, among others. Since 2010, Rachel has served at Ramsey Solutions, where she teaches people how to avoid debt, save money, budget and win with money at any stage in life. Learn More.

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