Updated May 15, 2017

How Much to Really Spend on an Engagement Ring

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Forget the "two months' salary" rule. Find out how much you should REALLY spend on an engagement ring here.

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If you're thinking of popping the big question soon, one of the first thoughts in your head is probably:

"How much should I spend on the ring?"

This is often a more emotional than rational decision.

But when it comes down to it, there are two major things you'll want to consider before buying: 1) your lady's expectations and 2) your financial situation. The goal is to find a balance between the two.

Of course, every person's situation is different. And that's why it's important to know where you stand rather than rely on an outdated two months' salary ruled that was invented by a marketer.

Rule of thumb: Spend 2 months of your income on an engagement ring. Therefore, if you are making $1000 per month, spend $2000 on an engagement ring. If you're making $2500 per month, spend $5000. Sounds simple, but the 2 months' rule of thumb is a BAD idea. We'll explain below.

Your Girl's Expectations

There's no getting around it. The ring does matter. And here's why:

  • An engagement ring is a symbol of your love and commitment. It shows you've invested in your future together.

  • Many women have dreamed about their perfect ring for a long time, including the style, diamond shape, etc. It'll be a big disappointment to get a ring that's not exactly what she wants.

  • Women are the ones who wear the ring every day. This is going to be the single most important piece of jewelry she owns. And naturally, they want something that makes them happy to look at and show off to their friends.

With all that said, most women are reasonable creatures who appreciate design but are not looking to bankrupt you with unrealistic requirements.

Your Financial Situation

Your special lady cares about your finances. After all, finances merge when you get married. So along with her expectations, an equally-important factor to consider is what you can afford.

There is no right or wrong answer. But there is a good way to look at it:

You should not put yourself into a crazy amount of debt for the ring. Most young professionals are already up to their necks in student loan debt. Plus you have the rest of your life to think about.

Here are some things that might help you determine your financial ability:

  • Your current income

  • Your expenses - Things like food and bills and any debts you're currently paying, like student loans and car payments.

  • Your savings - How much can you actually save per month if you cut down on extraneous things? How much you have saved up already?

  • Your potential income - Are you at a job with a lot of growth potential in the upcoming years? If yes, you may want to put that into consideration. But don't go overboard.

Using these factors, you should be able to calculate how much you could reasonably spend. Ideally, you want to be able to buy the ring without financing so you don't incur debt. Or at least you'll want to be able to pay off the debt you might incur in a couple of months.

Why the "Two Months' Salary" Rule No Longer Works

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Did you know the two month's rule was actually started by a De Beers ad, which also happens to be the same company that convinced the entire world that men need to propose with a diamond?

If you obey DeBeers' rule, that means that if you make $3,000 per month, you should spend roughly $6,000 on the ring.

However, that rule has some serious flaws. After all, it was invented to get you to pay more money to a diamond retailer.

First of all, most people get married in their late 20s, when they are still in the beginning of their careers and haven't come close to reaching their full earning potential. Plus, you have to calculate what you actually take home in net pay as opposed to your gross salary (unfortunately they are quite different.)

Secondly, most people graduate with student debt. When that's combined with the always-increasing cost of living, spending thousands of dollars on a ring may not be feasible when you're trying to get out of debt as quickly as possible.

James Allen

Find Your Own Rules

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The best way to make sure you're both happy is to have an honest conversation about expectations and finances. If you're going to share a life together, you really should be on the same page about things like this.

You should have an honest chat about where you are financially and what your goals for the future are (such as saving for a down-payment or paying off student loans). Then you can figure out how the engagement ring fits in with those goals.

For example, let's say you can save a couple hundred dollars a month. That means that after ten months of savings, you'll be able to afford a $1,000 ring. Once you have a number in mind, you can work to find exactly the kind of ring she would like that fits within that budget.

Talking about the cost of the ring may not be romantic, but it's important. Maybe she doesn't even want a diamond. Maybe she's frugal and appalled by the thought of spending more than $500 on a ring. Either way, you want to know.

You'll also be glad to get an idea of the style she likes instead of taking a blind guess. After all, there are a ton of options out there.

Tip: Over 40% of women want to be involved in the ring selection process. Read our beginner's guide to diamond prices so you don't overpay.

Average Cost/Size of an Engagement Ring

It's always good to have a basis for comparison. Here is the average cost and carat size of engagement rings in different countries.

CountryAverage Cost (US $)Average Size (carat)
United States$5,5001.0
United Kingdom$2,0000.5

Things to Consider

Now that you have an idea of a budget, there are a few other things to consider before putting down money for a ring:

  • Treat her as seriously as you treat yourself: If you spend quite a bit of money on your own hobbies and toys, then you should be willing to spend just as much on her ring.

  • Other future large purchases: Maybe there are other milestone purchases coming up, such as buying a house or going on a vacation. Make sure you know how the ring will affect that. You might find that taking a dream, once-in-a-lifetime trip together is more meaningful.

  • Expensive is not the same as thoughtful: If you're going broke buying a ring you can't afford, that's not showing you care. That's just putting your joint financial future at risk. Sure, your bride may have a beautiful ring on her finger, but will she be happy if you're struggling to make ends meet every month because of it?

    Plus, there are many ways to show you care without going broke. Trying planning an unforgettable proposal. Maybe look into a one-of-a-kind handmade ring from a small independent jeweler. Or perhaps your grandmother's ring would actually be the perfect way to show her that you care.

    Did you know? Over 50% of women say that they'll take a fairy-tale proposal over a large engagement ring any day. The proposal is going to be one of the most special moments of a girl's life, and a story she'll want to tell forever.

    James Allen

    James Allen: Search for Diamonds

    Shop for diamonds at James Allen, a CreditDonkey #1 recommended partner for the best online experience.

Should You Borrow Money to Purchase an Engagement Ring?

The best thing to do to finance your engagement ring is to put money aside each month until you can buy it in cash. But that might not be possible, especially when you have other loans to deal with. Saving up what you need could take a year or more, perhaps much longer than you want to wait to propose.

In that case, you could consider financing the ring or putting it on a credit card. But be careful: financing a ring doesn't mean that you should pick the largest diamond you can charge. You still need to make sure to choose one that fits within your budget.

The more cash you can bring to the table upfront, the better. If you must borrow the rest, develop a pay-off plan (the wedding date is a great deadline). Try to find a credit card with low interest.

Some credit cards come with 0% APR promotional periods if you're a new customer. But again, you need to have a feasible plan to pay off the balance before the promotional period ends. Some diamond retailers will have financing options too, though it may take some math to figure out if you'll end up paying more under their terms.

How to Save Money on an Engagement Ring

© base2wave (CC BY 2.0) via Flickr

This section has some tips on how you can lower the cost of the ring even more:

  1. Don't shop during peak times
    Avoid buying a ring between Thanksgiving and Valentine's Day. Proposals are at an all-time high during this period, which means the engagement ring prices are too.

  2. Know before you go
    Your knowledge of diamonds could play a major role in how much you spend at the jewelry store. So, before you go, research the 4Cs (carat, clarity, cut, and color) so you'll have the knowledge you need to negotiate the best deal.

  3. Go for an alternative shape or stone
    Have you considered a heart or oval shaped diamond? How about a sapphire, emerald, or moissanite gemstone? These options are easy on the eye and much more affordable than your standard round or princess cut diamond ring.

    If you truly cannot afford a diamond but want an alternative that looks like a diamond, consider these diamond alternatives. You'll be able to get a much larger diamond-like stone on a much smaller budget. Just make sure that your sweetie is okay with it.

  4. Customize the ring online
    Shopping online for the ring makes customization even easier. Not only will the engagement ring be unique, but you could possibly save a wad of cash by thinking outside the box. Diamonds in stores can be marked up almost 50 percent from their actual price.

    If you're thinking about buying an engagement ring, James Allen is one of our top recommended online retailers and they offer a no interest for six months financing plan.

  5. Check out some estate sales
    There are hidden treasures to be found at estate sales. But make sure to request a private appraisal before purchasing.

Bonus: Download diamond buying cheat sheet to help you stretch your dollar.

Bottom line:

How much you spend on a ring is a very personal choice. To make sure everyone is happy, it's best to get expectations lined up. And the only way to do that is to have an open and honest conversation about it.

Talk about what she wants and how that works (or doesn't) with your financial situation. Come up with a budget that works for both of you. A reasonable budget shows your beloved that you are making an investment for your future together and still keeps you within what you can reasonably afford.

Remember: the ring the most important piece of jewelry she will ever wear and the most important gift you will ever give, so you should both feel happy and comfortable with the decision.

    James Allen

    James Allen: Search for Diamonds

    Shop for diamonds at James Allen, a CreditDonkey #1 recommended partner for the best online experience.

    Blue Nile

    Blue Nile: Search for Diamonds

    Shop for diamonds at Blue Nile, a CreditDonkey recommended partner for the largest selection of diamonds.

Don't overpay for a diamond. Get FREE cheat sheet to save BIG on diamonds

Allison Martin is a contributing writer at CreditDonkey, a diamond jeweler comparison and financial education website. Write to Allison Martin at allison@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped consumers make savvy financial and lifestyle decisions. (read more)

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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