How much should you spend on an engagement ring?
When asked about how much an engagement ring should cost, most would subconsciously state a benchmark approximating to two months of your salary. To understand how this ballpark figure came about, we would first need to talk about the famed De Beers Group.
The De Beers Group are essentially the entire diamond industry - encompassing everything from diamond exploration, to mining, retail, trading and auction. For the most part of recent history, they had total monopoly power over the diamond market. During the Great Depression, the economy collapsed and diamond sales floundered. To keep revenue up, De Beers started a marketing campaign which would make it one of the most successful marketing campaigns ever made. This campaign increased diamond demand in two aspects. Firstly, it linked diamond to proposals, making it more commonplace. And secondly, they increased the budget to be spent on diamond rings, hence increasing the sale of diamonds.
Prior to the 30s, a diamond was not the norm for an engagement ring. De Beers successfully marketed diamonds as a symbol of love and commitment through the tagline, “A Diamond is Forever”. The success could be seen from an increase of engagement rings featuring a diamond from 10% to 80%! This resulted in an increased demand for diamonds, without which, would have only been purchased by the rich and affluent.
Concomitantly, the campaign also suggested that a month’s salary was to be the budget for an engagement ring. Subsequently in the 80s, the market rate was raised to two months of salary. This encouraged consumers to spend more than what they would and further expanded sales revenue.
The bottom-line is that there is no correct answer as to how much you should spend on your engagement ring. If you are unsure about how much you ought to spend, speak to our team and we would be able to guide you through our process. It could involve figuring out what carat size would complement your bride-to-be’s hand, or simply an analysis of what would be financially responsible for you to purchase. As we are moving into the modern age where such traditions are less deeply rooted, we are sure your fiancée would understand and appreciate you wanting to save a bit on the engagement to put towards your future home together.