What Goes into the Cost of an Engagement Ring?
How much should an engagement ring cost? What are the elements that go into the cost of an
24-year old Las Vegan, Kilona Kaprowsky, says she didn’t want a diamond centerpiece in her engagement ring at first. She was thinking more along the lines of a less expensive cubic zirconia or a white sapphire. In her mind, no one would ever be able to tell the difference anyway. But, eventually, the bride-to-be warmed up to the idea of a diamond engagement ring as she and her fiancé talked more seriously about it. They both found themselves weighing the cost of a diamond ring and whether or not the gem really matters. Just like with many U.S. couples, who spend, collectively, billions on diamond engagement rings annually, it mattered in the end. According to Bain & Company’s 2013 Global Diamond Industry Report by Olya Linde, American consumers spent $11 billion on wedding jewelry and engagement rings in 2012 alone. This appears to be related to their interest in investing in jewelry that will hold its value.
The Costs of Diamonds
Just what is it that causes the price of diamonds to be so expensive? Well, it costs about $1 billion just to develop the environmental, infrastructure and other safeguards of a major diamond mine. That same mine costs more than $100 million annually, to operate and maintain it. Then, there are the costs of paying the wages of the miners, as well as the rarity of each discovered diamond. Then, there are also costs related to cutting rough diamonds into consumer-ready gems, and setting them into precious metals. All of these factors help to drive up the price of diamonds. Another factor that keeps the costs of diamonds high is the fact that there haven’t been any new mines discovered in over 10 years. And, there are no major sources of new supplies scheduled to enter the diamond production market any time soon. In the meantime, however, the demand for diamonds continues to increase all over the country, especially when it comes to engagement and wedding rings.
How much is considered too much for an engagement ring?
The answer to this age-old question is: when the cost of the engagement ring exceeds that of the groom-to-be’s budget, the ring costs too much. People can tell you what the average cost of an engagement ring is all day long. But, the fact is that there is no actual average. Some guys spend hundreds, while others will spend hundreds of thousands on a ring for their bride-to-be. For example, celebrity groom, Justin Theroux, spent well over $500,000 to put a rock on the finger of Jennifer Anniston.
Typical Rule of Thumb When Buying an Engagement Ring
Although there’s no average, there is a rule of thumb that many jewelers suggest for men preparing to propose. It’s the “3-month rule.” When it comes to buying an engagement ring, the 3-month rule simply means dishing out three months’ worth of salaries to purchase it. However, if the groom-to-be is having financial difficulties, or job security concerns, even this amount may be too much. The bottom line is: You don’t want to start your new marriage off in debt. Cleaning out your entire saving account or getting financed for more than you can afford will ensure just that. Remember that most marriages fail within the first two years due to financial issues. Going into the marriage with huge debt related to an engagement ring you can’t afford always has been, and always will be, a bad idea.
** Article courtesy of our preferred vendor Wilson Diamonds – Since 1974, Wilson Diamonds in Provo has been driven to provide beautiful diamonds at unbeatable low prices. Specializing in engagement, bridal, and anniversary diamonds, their rings are unique and every aspect is designed with the highest standards.