Setting Your Engagement Ring Budget the Smart Way

It’s probably one of the first questions that arises as soon as you start ring shopping for your engagement. Maybe you’ve heard the "two-month's salary" rule? Or you’ve seen some ridiculously overpriced diamonds and felt pressured. But here's a secret: the engagement ring cost is based on your budget, your values, and what matters most to you. If you’re wondering how much engagement rings cost, you’re in the right place. Together we’ll explore:

1. The average spend on an engagement ring in Australia and beyond.
2. How much should an engagement ring cost.
3. The myths that can throw you off.
4. How to choose a budget you feel good about.
5. Stone types (lab-grown and gemstones have changed the game).
6. How VAHÉ Jewellery helps you get meaning and value.

So, let’s jump in.

How much is an engagement ring?

If you’re looking for a ballpark figure, here’s what most people typically spend so you can get a sense of the average cost of an engagement ring.

Budget Tier	Typical Spend Range	What You Might Expect
Modest	$1,500 – $4,000	Smaller naturals. Bigger lab-growns. Simple settings.
Mid-Range	$5,000 – $10,000	Substantial naturals. Premium lab-growns. Complex settings.
Premium	$10,000 – $25,000+	Top-tier naturals. Huge lab-growns. Custom settings.

Please note that costs will vary depending on the stone, metal, design complexity, and even your location.

As a point of reference:

1. In the US, couples typically spend an average of US$5,200 on engagement rings. Exchange rates, taxes, labour, and local design trends move the figures around.
   
2. Most Australians spend somewhere in the mid-range bracket if they want the look, quality, and significance without breaking the bank.
   
   
3. Lab-grown diamonds and other gemstones are stretching the value you can receive for your money. Since they are cheaper per carat (often significantly), you may be able to buy a bigger stone or better clarity on that budget than you can with a natural mined diamond.

Is the "Two-to-Three Months' Salary" Rule Still Relevant?

Remember the old "two to three months’ salary" rule for engagement rings? Some still bring it up, but let’s be real - in 2025, it’s outdated. Here’s a better way to think about it.

Why did the rule exist?

It originated in marketing from the jewellery business and traditional social norms when earning capacity, living expenses and individual debt were all quite different. It established a benchmark based on cost and status signalling.

Why is it less useful today?

1. People have more diverse financial profiles: student debt, housing mortgages and living expenses. Two months’ salary may be unaffordable or not realistic.
   
   
2. Stone substitutes (Lab-Grown Diamonds) allow you to achieve fantastic quality at reduced expense. So you don’t have to adhere to high expenditure standards to achieve something amazing.
   
   
3. Values are more personal. Many couples are interested in ethical sourcing, sustainability, or having the ring be special rather than merely its size or price.

What are People Actually Doing?

1. Setting a ring budget as a percentage of savings rather than salary.
   
   
2. Prioritising what matters to them: such as colour over carat weight, or craftsmanship over label.
   
   
3. Spreading budget across time: saving for the ring, or buying a simpler design now with plans to upgrade later.
   
   
4. Working with local comparisons rather than rules—researching what rings cost in Victoria or NSW with comparable specs.

Five Things to Consider Before Setting Your Engagement Ring Budget

When you're thinking about how much to spend on an engagement ring, think beyond numbers. The right budget balances your relationship values and your financial situation. Here are the five primary considerations:

1. Your Financial Status

Be honest. How much do you make, how much do you save, and how much can you afford without stressing yourself out? It’s not wise to begin your married life burdened by debt due to a ring. A beautiful piece exists in every budget range. Don’t stress out.

2. Your Wedding Plans

If you’re planning a big wedding or honeymoon, your budget needs to stretch further. Many couples shift money between the ring and the wedding day. Some scale back the party to allow more on the ring, others do the opposite. There’s no single answer, just priorities.

3. Personal Choices

What does your partner actually want? Some adore the glint of a diamond. Others value unique gemstones, or even a plain band with sentimental history. The more you align the ring with their style and values, the better it will feel—no matter the cost.

4. Stone Character

This is where the 4Cs come in (cut, colour, clarity, carat). But nowadays it’s also about the type of stone:

• Natural diamonds are prestigious, but they cost more.
• Lab-grown diamonds provide the same fire for a fraction of the price and are trending strongly in Australia.
• Gemstones such as sapphire, emerald, or ruby add individuality and significance to a ring.

5. Rings Other Than Diamonds

There’s a time and a place for tradition, but rings don’t need to be diamond-focused. Many couples are opting for:

• Coloured gemstones for personality.
• Simple bands for understated glamour.

The bottom line? An engagement ring budget should fit your story, not someone else’s rule.

The 4Cs and How They Impact Cost

If you opt for a diamond, either natural or lab-grown, the 4Cs are your guide. They’re also the primary factors influencing how much your engagement ring will cost.

Here’s the rundown:

Cut

The most significant "C." A finely cut stone sparkles more, even if it’s small. Spending extra here usually returns more than chasing size.

Colour

Diamonds range from colourless (highest quality) to yellowish shades. Near-colourless diamonds (such as G–I grade) look beautiful once mounted, but cost significantly less than a perfect D.

Clarity

This gauges inclusions or internal imperfections. The secret? You don’t need perfection. An "eye-clean" gemstone (where imperfections aren’t visible to the naked eye) usually strikes the best balance between beauty and price.

Carat

The stone’s weight. Bigger isn’t necessarily better. Opting for slightly under milestone weights (such as 0.9ct instead of 1ct) can save thousands, with no visible difference.

Tip from VAHÉ Jewellery

Use the 4Cs wisely. A bit less colour but a perfect cut can look brighter and cost less than chasing perfection across the board. For more details, read our Engagement Ring Buying Guide.

How to Determine Your Engagement Ring Budget

Now that you’ve learned the myths and the reasons, how do you really decide how much to spend on an engagement ring? Here’s a step-by-step approach:

1. Examine your net monthly income: Start with what you have after taxes. This is your actual budget base.
   
   
2. Deduct fixed expenses: Rent, bills, groceries, transport—the non-negotiables. This shows your flexible income.
   
   
3. Include your savings goals: House deposit? Travel? Kids? Your ring budget should align with these goals.
   
   
4. Pick a comfortable bracket: Choose a range, like A$4,000–A$6,000, to allow flexibility when shopping.
   
   
5. Talk to your partner: Many couples do this together—it ensures taste alignment and keeps finances transparent.

New Trends in Engagement Rings

With time, engagement rings have evolved. Here’s what’s trending in Australia and abroad:

• Lab-Grown Diamonds: Chemically identical to mined diamonds, cheaper, and popular for ethical reasons. Bigger or better stones for the same price.
  
  
• Coloured Gemstones: Sapphires (especially Australian), emeralds, and rubies are bold, symbolic, and unique.
  
  
• Sustainable & Ethical Options: Recycled gold, fair-trade stones, and lab-grown diamonds are in demand.
  
  
• Custom Designs: More Australians are commissioning custom rings. Sometimes less, sometimes more expensive—but always meaningful.

Why Your Ring Should Be About Comfort, Not Comparison

Ultimately, the perfect budget is one that you don’t regret. Overspending causes stress, underspending may mean compromising on meaning. The sweet spot is where quality, value, and sentiment meet.

With VAHÉ Jewellery, the focus is always on craftsmanship and helping couples find a piece that tells their story. whether that’s a diamond solitaire, a lab-grown gem, or a meaningful coloured stone.

FAQs on Engagement Ring Costs

How much to spend on an engagement ring?

There’s no magic figure. The average Aussie spends A$5,000–A$10,000, but many go higher or lower depending on budget, priorities, and style. Focus on what matters to you and your partner.

Are lab-grown diamonds worth the price?

Yes. They’re chemically the same as mined diamonds, less expensive, and an ethical choice. Many couples prefer them for bigger or better stones within budget.

What if I want something other than a diamond?

Great choice. Gemstones like emerald, sapphire, ruby, or moissanite are trending. They’re unique, often cheaper, and make a statement.

Is the two-month salary rule still valid?

No. It was an old advertising idea. Today, couples budget based on income, savings, and values. The smarter approach is to find a ring you love without financial strain.

Can I customise an engagement ring on my budget?

Yes! Custom engagement rings aren’t always more expensive. At VAHÉ Jewellery, we create personalised rings to fit your budget—whether it’s a classic solitaire, a gemstone halo, or a modern lab-grown diamond design.

Final Thoughts

So, how much should you spend on an engagement ring? Enough to celebrate your story, but not so much that it burdens you.

Ditch outdated rules. Focus on financial peace, personal taste, and today’s choices—from dazzling lab-grown diamonds to meaningful gemstones and sustainable metals.

At VAHÉ Jewellery, we believe the most valuable thing is finding a ring that suits you. Whether your budget is modest or lavish, there’s a thoughtful design for every story. Remember: the worth isn’t in the cost, but in the thought, attention, and craftsmanship behind it.