I upgraded at our 10th anniversary. I love my engagement ring setting (we chose it together!) but I was open to upgrading the stone (diamond shrinkage and all). That's what we ended up doing - same setting, bigger stone - and I am happy that we did!
Before the upgrade, I spent a lot of worrying - what others may think, would I come off as too materialistic? Not sentimental enough? Would they judge me? Is there something better we could use the funds for?
Then I admitted to myself and hubby that I really did want an bigger stone. I wanted it for my own pleasure, and my hubby was more than open to it (he of course wants me to be happy but I also think he is proud that he could provide an upgrade). I had to move away from caring what people thought - especially my MIL, though I'm not even sure she could tell that I upgraded. I shared the news with a few friends who I know would appreciate it and not judge.
Long story short, I upgraded because I wanted a bigger diamond and hubby was supportive!