Engagement Rings and the Economy

You might think that an economy in recession would spell trouble for any profession associated with weddings (which are, let’s face it, a big expense). But in fact, you’ll find that there is one adjacent business that continues to do well even when finances are lean: the engagement ring industry. Although couples may push their wedding date in order to save the funds they need to entertain their friends and relatives in style, it turns out that they’re still willing to put beaucoup bucks on the line when it comes to the proposal.

Last year, happy couples spent nearly $10 billion on engagement rings, with the average cost per ring coming in at just under $4,500 (and an average diamond weight of approximately 1.2 carats). And many are turning to alternative methods of purchase in order to save money on their bling and still get a great ring. Most people no longer frequent jewelry stores; instead, they buy their diamonds on the internet (where companies that lack the overhead of a brick-and-mortar location can offer amazing deals to customers looking for diamonds).

However, it turns out that consumers aren’t really spending less money in this area. The average person going out to buy an engagement ring already has a budget in mind, as well as particulars like the cut of the stone, the style of the band, and so on. The reason they are shopping alternate vendors is so that they can get more bang for their buck, not necessarily as a way to come in vastly under budget. And the old rule still seems to apply: those shopping for a ring should plan on a budget that is equivalent to three months’ worth of salary.

While most ring recipients do tend to be involved in the process, they aren’t necessarily the driving force behind dropping a ton of dough on the engagement ring. The truth is that they seem to be keen to have some input into their ring selection, but they don’t want their bling to break the bank. Of course, most couples will certainly want to save some cash for the wedding and honeymoon. But in this economy, it appears that they’re not willing to skimp on the ring, even if it means pushing off the wedding.