5 Tips That Could Save You Hundreds on an Engagement Ring

how to pay for an engagement ring

If you’re getting ready to shop for an engagement ring, you might be overwhelmed trying to figure out which cut, color, clarity, and carat to buy. Not to mention the biggest worry: the cost.

Knowing how to pay for an engagement ring is also about careful planning. The average person spends $5,978 on an engagement ring, according to The Knot.

Finding and buying the right ring is one of the bigger purchases you’ll make, aside from your wedding, of course. Here’s how to do it right.

How to afford an engagement ring

Although the average cost approaches $6,000, you might not have to wonder how to afford an engagement ring. Consider that 55 percent of adults think spending less than $3,000 is a wiser choice, according to a 2016 GOBankingRates survey.

The truth is that every couple is different. Knowing my potential to go overboard, my girlfriend held me to a $500 budget, for example. Your partner might trust your judgment to choose a rock at any price.

But few people still follow the two months’ salary rule popularized by De Beers in 1980s marketing campaigns. With that in mind, here’s a five-step plan before you drop a knee.

1. Decide on the type of ring

Past the point of learning your partner’s fit and design preferences, you’ll need to decide on the band and the stone’s size, shape, and setting.

Dropped hints and the help of friends can go a long way. They could give you enough of a head start to browse for price ranges online.

Along the way, you’ll discover ways to lower your range, if necessary. To stay close to $500, for example, I swapped a sapphire into the setting of my fiance’s ring, including tinier diamonds on the sides.

If you’re looking for a diamond ring but need to cut a corner, lowering the carat size even by a tenth can offer big savings. Jewelers have price jumps for round numbers, like 1.25, 1.5, and 2 carats. You could look at the other Cs — cut, color, and clarity — for sacrifices, if necessary.

Go into the process with an open mind. Don’t rule out customized or antique rings, which could prove to be cheaper than they sound.

2. Start saving up

It’s also important to shop for a ring with a specific budget in mind. Your eyes might get bigger when you see a ring just beyond your price range, but it’s important to remember that you can find something similar at a lower cost.

Say your partner’s desired ring type falls into the $1,500 range. Coming up with that cash via a loan might seem tempting. But before resorting to a personal loan, treat the future debt as a mid- or long-term savings goal. Knowing how to save for an engagement ring is partly about knowing your timeline. Proposals shouldn’t be rushed anyway.

If you’re not planning to propose for months, for example, you could set aside a little bit from each paycheck to build your ring fund. It might take up to six weeks for ordered rings to arrive anyway.

Consider the right savings vehicle, too. Keeping your ring fund in your basic checking account, for example, would earn you little or no interest. Putting it in a high-yield savings or checking account, on the other hand, could net you up to 1.00% APR or higher.

If you take even more time to pop the question, you could stash existing savings in a one- or two-year certificate of deposit (CD) that would guarantee a specific rate of return. Your money wouldn’t be accessible without penalty, but it would be safe from stock market risk until you need to withdraw it.

As you approach the big day, also try to line up your shopping with store or holiday sales, such as those occurring during Valentine’s Day weekend. You could lower your spending even more.

3. Shop online and off

Once you know how to save for an engagement ring, shop for a ring the way you would shop for other big purchases. Compare pricing online and in store, ask for advice from friends, and research sellers.

Shopping online allows you to compare rings from multiple retailers. Whether you’re looking on Etsy or the websites of small boutiques or large chains, consider the pros and cons of buying online and in person:

  • Online: You won’t get to physically hold the ring, but there are some advantages, such as potentially avoiding sales tax. You could also opt to buy a discounted stone online, though you’ll have to match it with a setting elsewhere.
  • In person: You might be looking at a smaller inventory, but you can take your time, ask questions, and even bring along a friend for advice. Creating a relationship with a jeweler also gets you perks like free cleanings.

You could always shop both in person and online until you find the best deal. In my case, I chose to buy a ring online from a jeweler that was within driving distance. That way, we could head straight there if something was amiss with the ring.

No matter where you shop, make sure the jewelers have some credentials. They can be members of Jewelers of America or the Gemological Institute of America (GIA), for example. They should present GIA certificates for diamonds. You might also review the jeweler’s reviews via the Better Business Bureau.

4. Review contingency plans

Knowing how to pay for an engagement ring should include knowing how to replace one. Say your partner wants to exchange the ring. Or maybe the ring becomes damaged or stolen.

These scenarios can be planned before the fact but not after. As you’re zeroing in on that perfect ring, you’ll want to ask the jeweler about its return and exchange policies, warranties, and insurance options.

National jewelers provide this information on their website. Brilliant Earth, for example, offers 30-day returns and a lifetime warranty. It also allows you to buy an engagement ring with a temporary setting that can be replaced after your partner says, “Yes.”

You might have to go looking or asking for these sorts of guidelines at smaller shops.

Also, consider that your ring choice might affect your ability to bring it back to the store. You typically won’t be able to return or even exchange a ring that was custom designed or engraved, for example.

As for protecting your purchase, ask your insurance provider about including the ring’s value on your existing homeowners or renter’s policy. You could also look into specialty insurance options. Your costs and coverage would depend on the value of your ring and where you live.

5. Pick the right payment method

If you did the dirty work of budgeting at the start, you’ve reached the easy part of the ring-buying process. But you might be wondering about how to pay for an engagement ring beyond handing over cash or swiping your debit card.

For example, paying with a credit card could net you rewards or greater protection for online purchases. It’s not a bad idea as long as you saved up to clear your card’s balance soon after the transaction.

You might also be tempted to use an in-store financing option.

A jeweler could extend you a line of credit that charges no interest as long as you make your monthly payments on time. Missing a payment, however, could result in interest charges surging above 20 percent. You should be wary of national chains’ store credit cards for the same reason.

Using cash is your safest bet. It ensures you won’t take on debt, and many jewelers will offer an in-store discount for paying in full on the day of the purchase. If they don’t volunteer this price reduction, start negotiating.

Keeping the ring a secret

Now that you know how to pay for an engagement ring, you’ll just have to pay for it in a way that lets you keep it a secret.

If you combined finances before getting married, you might have to disguise the charge on your bank statement. Also, if you buy the ring online, consider shipping it to your office or a friend’s place. That will stop your partner from finding a very interesting box on the doorstep.

Setting a budget, saving up, and shopping around isn’t fun for everyone. But these steps will help ensure that you find the right ring for the right price.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

2 Important Disclosures for Citizens Bank.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.