How much should you really spend on an engagement ring?

Planning to pop the question? Good. But before you do, there’s another big one you’ll need to answer first for yourself, and that’s how much should you spend on an engagement ring?

When it comes to shopping for an engagement ring, there are so many variables to consider. From your partner’s preferences to how much you can reasonably afford, the factors that go into making this purchase are considerable. On top of that, ring etiquette—like whether or not you still need to follow the three-month salary rule—can be a source of pressure and anxiety, which can make the prospect of getting down on one knee feel even more overwhelming.

To find out more, we spoke to three experts to get their tips on what to save, how to budget, and everything else you need to know, because while the perfect engagement ring can make your proposal feel like a dream come true, having a smart financial strategy in mind before you buy the rock can give you the kind of peace of mind that’s impossible to put a price tag on.

How much does an average engagement ring cost?

Credit: marchmeena29 / Getty Images / iStockphoto The average price of an engagement ring in the U.S. was $5,225 in 2021.Engagement rings are a major investment. According to a recent survey by Ringspro, an engagement ring guidance website, couples spent an average of $5,225 in the U.S. in 2021. Prices can vary significantly, with the cheapest going from $10 to the most expensive clocking in at more than $30,000. One thing they all have in common though? They cost money.

According to Alastair Smith, founder of Ringspro, there are three key considerations that go into buying an engagement ring: your financial situation, your attitude toward spending, and the expectations of your recipient. “For some people, a significantly sized diamond will be a symbol of just how big their love is, while for others, a simple token of commitment is all they need,” said Smith.

If you’re shopping for a diamond engagement ring, the 4C’s—color, cut, clarity, and carat—can have a significant impact on the price tag. Depending on which retailers you shop from, you may end up spending more too, as some, like Kay Jewelers, have a reputation for charging more, says Smith. Other factors, like the engagement ring’s setting or the type of metal (like yellow gold or platinum) the band is made from, don’t just have aesthetic value. These elements can also determine how much you’ll need to shell out once you hit check out.

Is the “three month’s salary rule” really true?

Credit: ICHIRO / Getty Images You don’t need to spend three month’s salary to get the perfect ring.Chances are, you’ve heard this one before: You need to spend between one to three month’s gross income on an engagement ring if you want to propose properly.

This rule is commonly known, but is it actually an etiquette best practice? “It’s not true, it has never been true,” says Nick Leighton, host of the weekly Were You Raised By Wolves? etiquette podcast. “This is not a traditional etiquette thing.”

But many people think it is, and according to experts, that’s due to advertising. During the Great Depression, De Beers famously launched an ad campaign designed to corner the ring market and boost flagging diamond sales. Using taglines like, “A diamond is forever,” the company’s ads suggested to consumers that it was best practice to spend at least a month’s salary, and in that way, completely transformed the psychology behind purchasing engagement rings.

“There’s a persistent myth around the two month’s or three month’s salary rule, but it means people end up with a false sense of pressure on what they should or shouldn’t do,” said Smith. At the end of the day, it’s important to remember that it’s all bunk. “First it was one month, then two, now it’s three—this is just an ad agency dialing it up to move merchandise,” adds Leighton. If you can’t afford to set aside three month’s salary, you shouldn’t feel bad or worry that you’re doing things wrong, because it was never a real rule to start with.

How much should you budget for an engagement ring?

Credit: AsiaVision / Getty Images Diamonds aren’t the only option when it comes to buying an engagement ring.Although there isn’t a set etiquette around how much you need to spend on an engagement ring, knowing your budget before you start looking for one can help you shop smarter and avoid going overboard.

“Some people try to equate wedding rings with cars,” said Leighton, because they’re both equally large purchases that can make a huge difference in your life. Under that guideline, someone who is willing to spend $5,000 on a vehicle may think that’s the amount that should go toward an engagement ring.

While it’s not a hard and fast rule, the car analogy may be a helpful guideline for some. In the Ringspro survey, 46% of respondents said they spent more on their engagement ring than they did on their first car, which is also telling. “A good way [for someone] to look at it is to fast forward a year and think about what they would feel comfortable having paid,” said Smith. “If it’s an amount that is going to give them pangs of regret and break out in a cold sweat at having spent so much, then it’s probably a good idea to revise the budget down.”

Depending on your budget, it might also make sense to skip diamonds altogether. “The concept that a wedding ring must be a diamond is very firmly embedded in people’s psyches,” said Leighton. “But diamond engagement rings are a relatively new thing and prior to the 1930s, it wasn’t very common.”

Lab-grown diamonds or cubic zirconia could be great, cost-sensitive alternatives if you and your partner are on the same page about it before you start shopping. In the Ringspro survey, sapphires and emeralds were also popular options among shoppers looking for unique center stones.

How to save for an engagement ring

Credit: andresr / Getty Images Shopping around at various stores can help you cut down extra expenses.Once you have a clear budget in mind for an engagement ring, it’s wise to start saving. “You can create a [savings] plan by cutting out several discretionary expenses, especially on memberships you aren’t using anymore,” says Ben Reynolds, CEO and founder of Sure Dividend, which helps individual investors build dividend stocks and increase their retirement funds.

Aside from canceling memberships you may no longer be using, curbing expenses from takeout, streaming platforms, and other extras could help to pad your savings account in the short-term and give you more capital to put toward an engagement ring. Reynolds recommends using a high-yield savings account, as these types of accounts typically offer compound interest, which will add to your nest egg over time.

According to Smith, it’s not uncommon for shoppers who are going into stores directly to try and negotiate discounts or get extras—like engagement ring insurance—thrown in before they buy. This strategy could be a way to bring down the overall price of the ring and get a great rock for less than you might have spent otherwise. Another smart approach is to comparison shop across multiple retailers before making a commitment.

One major thing Reynolds cautions against is using a credit card. “You might be tempted to use your credit card to pay for most or all of the cost of [an] expensive engagement ring,” he noted. “However, when you use a high-interest rate credit card, you end up paying more than the ring is worth.”

Using a credit card to make such an expensive purchase could end up costing you big in other ways, too. According to Reynolds, failure to keep up with monthly payments or to pay off the cost of the ring before a credit card’s promotional period ends could negatively impact your credit score. Or worse, leave you with the kind of long-term debt that makes it difficult to secure a mortgage loan or make other important financial decisions with your partner.

Should you spend more because of the pandemic?

Credit: Rawpixel / Getty Images / iStockphoto Smart buying choices can help you take first step toward forever without going into debt.The wedding industry took a major hit in 2020 due to COVID-19, and while vaccinations are becoming more readily available—and with it, the hope that life will return back to normal—experts predict that weddings will look different for years to come, and so will the experience of purchasing an engagement ring.

A recent study by The Knot found that shopping for engagement rings online increased during the pandemic. In December 2020, The New York Times reported that jewelry purchases are on the rise, with engagement ring sales leading the charge. According to Reynolds, it all makes sense. “Some couples are taking advantage of their saved money on travel, wedding expenses, and [a] honeymoon to get a more expensive engagement ring, especially when they feel life is too short.”

That said, it’s still important to remember that an engagement ring is only one part of the experience of getting married. More than anything, says Leighton, it’s essential to remember the forest for the trees. A wedding comes down to a promise—one that you’re making to the person you love, in front of the people in your community who you want to hold you accountable to that promise. “Any expectations that a wedding or an engagement ring must be something are recent inventions, and it causes way more stress and anxiety than it probably should.”

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Prices were accurate at the time this article was published but may change over time.

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