Here's How Much to Spend on an Engagement Ring

Hint: You can forget about the three-months' salary "rule."
by Angela Guzman and Christin Perry
person holding engagement ring box with diamond ring
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Ready to start looking for an engagement ring? When you’re ready to take your commitment to the next level, you’ll want to make sure to get it right with a special ring and heartfelt proposal. After all, this is one moment you'll remember (and that you've both been excited about) for a long time. At first glance, buying an engagement ring may not seem all that difficult. Simply find a jewelry store and remember to bring your wallet, right? But as you stare at the rows of rings in different shapes, sizes and prices (and don't forget about the 4Cs), you'll find that doing some research goes a long way when it comes to choosing and deciding how much to spend on an engagement ring. Here, we’ll take you through the average engagement ring cost in 2018, cut through the myths surrounding how much to spend on an engagement ring, and highlight the factors to consider when selecting the best ring for your partner and your budget.

In this article:

Average Engagement Ring Cost

One thing’s for sure—diamonds are still a serious investment. According to The Knot 2018 Real Weddings Study, the average cost of an engagement ring is currently $5,680. Although that number's taken a slight dip compared to the engagement ring spend in 2017 ($6,351), it's still pretty steep (for reference, the average cost of an engagement ring in 2011 was $5,095).

Engagement ring prices are clearly nothing to scoff at—so how should you even begin determining how much to spend on an engagement ring for your partner? The answer is both multi-faceted and highly subjective. In other words, there's no one-size-fits-all rule to follow and no "right" answer. But don't worry, this isn't where we leave you—we'll take you through a few important determining factors (and some old-school myths) to consider before you spend money on an engagement ring. And if you take anything away from this, it's that you should never go into major debt for the ring of your partner's dreams.

"Rules" for How Much to Spend on an Engagement Ring (That You're Welcome to Ignore)

The One/Two/Three-Month’s Salary Rule

You’ve probably heard the "one month’s salary" rule, which says you should spend one month’s gross income on an engagement ring. Few people realize that this "guideline" began as a marketing initiative that diamond marketers used to enhance sales around the start of World War II. Over time, this silly notion grew to two and even three month’s salary. It's highly unrealistic, especially since it considers gross income rather than net, and doesn’t look at debt load (at an all-time high for young adults due to student loans). Following the three months rule, if your annual income is $150K, you should spend $37,500 on an engagement ring. Uh, nope. So despite what jewelry ads may want you to spend, it’s never a good feeling to spend the first several years of your marriage paying off the engagement ring. Translation: Feel free to ignore this out-dated "rule."

Engagement Ring Calculators 

From downright silly to only marginally helpful, engagement ring calculators attempt to help you decide how much to spend on an engagement ring by gathering information about your income, lifestyle and debt-to-asset ratio. And of course, there’s one that wants to know how attractive your significant other is in order to make its determination. Buh-bye! If you’d like to use an engagement ring calculator to determine a ballpark budget, go right ahead, but steer clear of hokey versions. Better yet, read on for some helpful (and legit) tips to determine how much money you personally should you spend on the right engagement ring.

How Much to Spend on an Engagement Ring (Realistically)

Shannon Delaney, director of communications for online diamond retailer James Allen, encourages every person looking to purchase an engagement ring to develop a plan of action that begins with a budget. "The best place to start when you're beginning this process is to set a budget," Delaney says, "This will guide all of your decisions going forward, and it's important to have a handle on how much you're looking to spend. From there, we recommend thinking about priorities—are you looking for a high-quality diamond? Are you willing to sacrifice a bit on quality in order to make it a larger diamond? Are you planning for a simple band which will be cheaper, or something with a lot of smaller diamonds that will take more of your budget?”

In keeping with this advice, here are some important factors you’ll want to consider as you determine how much to spend on an engagement ring:

  • Financial Situation. Whether you’ve saved for a down payment or plan to finance the entire cost of the ring, figure out what you’re comfortable with if you’ll have monthly payments going forward. Think about your current bills and your current income, and determine whether either will change (for better or worse!) in the foreseeable future.
  • Partner’s Expectations. By now you should have some idea of what type of engagement ring your significant other is dreaming of, but if you don’t, now’s the time to find out. Your main goal is to purchase a ring they'll love and feel proud of, regardless of the price tag. You could ask your partner outright for ring options, or go “window shopping” together to figure out what they really want. If you want your proposal to be a complete surprise, consider asking friends, or check around for hints they may be leaving you. Finally, consider their individual style, hobbies and overall lifestyle, along with gifts you’ve given in the past they'ved loved.
  • Meaningfulness of Ring. In most cases, a well thought out ring that speaks to your partner's individual personality will be much more meaningful than the biggest ring you can find—and that maxes out several credit cards. Got a family heirloom on your hands? Perhaps your partner would prefer the heirloom over a ring at any price since it’s so special to you. Or maybe she’d like to break with tradition and skip a diamond altogether.

The Best Ways to Save Money on an Engagement Ring

When you’re finally ready to whip out your wallet be sure you’re getting the biggest bang for your buck—here's how.

  • Shop online: Delaney advocates shopping online in order to ensure you’re getting a good price and product. “Go with an online retailer like James Allen. The total savings come in at 30–50 percent versus a regular store. Also, thanks to the tremendous selection, you can ensure that you get exactly the diamond and ring that suits you and your budget and not be pressured into something the store has in their jewelry case,” Delaney says. Shopping online not only offers substantial savings on the engagement ring cost, but it also allows you to customize the ring, ensuring your partner gets exactly what she wants. See below for additional tips on buying an engagement ring online.
  • Give up a fraction of carat size: “Go with an under-size diamond," Delaney says. "These are diamonds whose carat weights are slightly below traditional cut-off points. For example, a 0.97 carat diamond is identical to a 1.0-carat diamond to the naked eye, but has a much smaller price tag.”
  • Go big on cut but sacrifice on color and nclusions: Learn the 4Cs of diamonds, outlined here. The cut of the diamond is one you won’t want to sacrifice on, since a well-cut diamond will shine brilliantly. According to the American Gem Society, which rates the cut of a diamond on a scale from 0 (ideal) to 10 (poor), “If you compare a well-cut small diamond side-by-side with a slightly larger diamond of lesser cut quality, the smaller diamond may look larger to the naked eye.” So opt for the best cut you can afford, but maybe skimp a bit on clarity and color if you need; slight inclusions (or flaws) and faint coloration will not be visible just by looking at the diamond, and will result in substantial savings.
  • Skip the solitaire: Purchase a ring that’s made of several smaller diamonds rather than a solitaire. This is a fantastic way to find a stunning ring without spending that three month’s salary we talked about. And you’re in luck if you go this route—the halo ring, a setting that encircles a center gemstone is totally on trend right now, and it makes even a small center diamond look stunning (and huge).

How to Buy an Engagement Ring from an Online Diamond Retailer

Yes, it’s possible to buy an engagement ring online, where the average engagement ring cost is much lower. The convenience and lower price can’t be beat, but there are definitely risks to be aware of. It’s important to recognize the difference between bogus diamond websites and those of professional jewelers. Tom Shane, CEO of Shane Co., and customer service representatives at reputable retailers should be more than happy to disclose this information.

Note that despite the lower engagement ring prices, you’ll want to do your research before purchasing an engagement ring from an online retailer. Make sure you fully understand the company’s payment and shipping methods, and the return policy. It’s also a good idea to read through the reviews on the company’s website. Finally, requesting certification on any diamond is always a good idea. There are a number of ways to verify the authenticity of a diamond, like GIA’s Report Check, and customer service representatives at reputable retailers should be more than happy to disclose this information.

Not sure where to begin with your wedding planning? Take our Style Quiz and we'll pull together a custom wedding vision and vendors to match, just for you. After that, create a free, personalized wedding website to keep your guests informed (and excited!) about your plans, and a time-saving Guest List Manager to organize your attendees. Even better? You can sync your Guest List Manager and wedding website to update everything at once. 

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