How much should you spend on an engagement ring, really? Here’s why traditional “rules” are outdated and how to set your budget.

It’s a perennial question:

How much should you REALLY spend on an engagement ring?

You may have heard something about spending two, or even three months’ salary on a diamond engagement ring. Considering a median salary in the United States of about $36,000, that’s a $6,000 to $9,000 ring, a pretty nice piece of jewelry.

Not to mention, a serious potential debt for someone surviving on that income. The last thing you want to bring to a new marriage is unnecessary debt and financial stress!

So why let the diamond industry tell you how much to spend?

How much should you spend on an engagement ring?

How Much Should You Spend On An Engagement Ring In 2021? - How much should you spend on an engagement ring

Simple answer? Buy the engagement ring you can fit into your budget.

Whether that means saving, using credit, or paying out of pocket, decide the best way to fit the right engagement ring into your financial picture.

Don’t let others tell you what to spend. How much you should spend on an engagement ring is entirely up to you and, if you already share finances, your fiancée.

Here are some things to consider when trying to decide how much of your budget you should spend on that new rock:

Align expectations with your partner

If you do already share finances with your soon-to-be-fiancée, it would be wise to feel out how much they consider reasonable to spend on the ring.

If you find your budgets are mismatched, this is a good time to discuss your differing expectations around money – rather than waiting for marriage.

You can open a discussion about money without explicitly discussing the engagement ring if you’re trying to keep your proposal a surprise.

Buy a meaningful ring, not an expensive one

There are many ways to find a meaningful engagement ring that doesn’t cost thousands of dollars.

For example, you could:

Yes, an engagement ring is a symbol of love and commitment, and the money you put into it can contribute to that symbolism. But sinking yourself into years of debt just to buy the flashiest ring on the block doesn’t get your lifelong commitment off to a great start.

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Don’t be pressured into following the “two months” rule

You’ve probably heard the popular rule that you should spend two (or more) months’ salary on an engagement ring. Where did that come from?

Advertising, of course.

The “rule” was established through ads by the diamond company DeBeers throughout the 20th century. The company’s ads also established diamonds as the norm for engagement rings — for the first half of the century, engagement rings contained all sorts of gems.

It is an outdated rule

The concept is also tied to outdated notions of gender roles in relationships and society. One DeBeers ad from around the 1980s reads:

“​​Two months’ salary showed the future Mrs. Smith what the future would be like— suggesting the role of the husband as breadwinner (even at a time when that reality had already been fading for decades).

We’re not in the 1950s anymore.

It isn’t feasible for most young couples

Today’s young adults are graduating with student loan debt, and facing minuscule entry-level salaries, not to mention high costs of living.

Almost all women are working, and even with two incomes, most of us can’t afford to go from college to married homeowners with kids in less than five years.

Should you borrow money for an engagement ring?

As I’ve written before, these days it’s unreasonable to think that you’ll be debt-free before getting married. With rising credit card and student loan debt, combined with the fact that we tend to delay marriage, many of us will bring debt with us into our married life.

Still, the less debt you bring into a marriage the better.

To avoid racking up debt before tying the knot, consider:

  • Only borrow as much as you can repay within 12 months.
  • Delay your proposal and save up for the ring.
  • Buy a lower-priced ring and pay for it in cash.

What you decide depends on what’s important to you and your partner about the proposal — the style of ring, the timing, the value, etc.

Remember: engagement rings are a symbol of your love, not the measure.

How to set a budget for an engagement ring

Setting a budget for an engagement ring is similar to setting a budget for any major purchase you want to save for or finance.

Follow these steps to figure out how much you can afford each month:

  1. List your total income.
  2. List your total expenses.
  3. List your monthly debt payments.

From this information, you can figure out how much money you have to play with.

  1. Total together your debt payments and expenses to figure out how much money you need to cover your lifestyle and financial obligations.
  2. Subtract that total out from your income to find your disposable income amount.

Your disposable income is the money you have available to spend as you please. You could set some of it aside for a few months to save up for a ring purchase, or use it to determine how much you can borrow and pay back if you want to finance a ring.

Don’t forget about your debt-to-income ratio

Also, consider your debt-to-income ratio (DTI). This is a number lenders look at when deciding to lend you money, like a mortgage, and they generally want to see a DTI of lower than 36%. If borrowing for a ring would put you over that threshold, be cautious.

To find out your DTI, use MU30’s Debt-To-Income Calculator.

Popular types of engagement rings

How Much Should You Spend On An Engagement Ring In 2021? - How much should you spend on an engagement ring - Popular types of engagement rings

You might think of the solitary diamond ring as the “classic” engagement ring. But, as I mentioned above, that trend is about 60 years old, and it was manufactured by a diamond company (with, um, a little bit of skin in the game).

If you’re choosing an engagement ring for someone else and feel clueless about what’s in style, consult the bridal magazines for tips — your beloved is probably looking at them, too. Knowing what they expect in style could help you figure out what to expect for your wallet.

Brides magazine notes several trends that depart from the so-called classic — and could be more affordable alternatives, including:

  • Personalized rings.
  • Band-style rings.
  • Petite side stones.
  • Compass prongs and East West (horizontal) cuts.
  • Emeralds and other colorful gemstones.
  • Black gold (not oil) and yellow gold.

How much does the average person spend on an engagement ring?

Unfortunately, good data on how much people spend on getting married is tough to find.

Most of the data available comes from surveys conducted by bridal magazines, typically surveying a pool of trend-conscious readers. They don’t hear quite as much from your frugal cousin in the Midwest who invited 80 guests and made their own cake.

So, take these numbers with a grain of salt.

The Knot reported in 2020 an average spend on an engagement ring of $5,500 nationwide, with 25% of respondents spending between $1,000 and $3,000, and 11% spending less than $1,000.

In the same year, Brides’ American Wedding Study put the average spend at $3,756, down from $7,829 in 2018.

Should you shop for an engagement ring together?

How Much Should You Spend On An Engagement Ring In 2021? - Should you shop for an engagement ring together?

For a man proposing to a woman, the “tradition” — again, established by advertisers in the mid-20th century — is for him to purchase the ring and surprise her with the proposal.

But relationships and gender roles are a lot more varied than that tradition encompasses.

If your partner is the breadwinner and their income will contribute to the cost of the engagement ring, they might want a say in what you buy. Or maybe they want to save you the stress of making the decision — or save themselves the disappointment of your pick.

Even Martha Stewart admits there are pros and cons to shopping for an engagement ring together, so don’t dismiss the option. Feel it out with your partner before making the purchase to figure out whether they want to be involved.

Summary

Whatever you decide to spend, do your homework: buying your engagement ring online can save 40% to 50%.

Also, it’s NOT all about size. Tons of factors contribute to the cost and desirability of an engagement ring.

To help you navigate your options, I created a website where you can learn more about how to shop for diamonds and get the best deal on your engagement ring.

Learn more about the dos and don’ts of financing an engagement ring here.

Shop now:  Go to James Allen, our recommended online jeweler »

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About the author

David Weliver
Total Articles: 306
David Weliver is the founder of Money Under 30. He's a cited authority on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.