How Much To Spend on an Engagement Ring

wedding engagement ring
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You’ve finally met the one person you can envision spending the rest of your life with. They get you. You share the same dreams, the same goals and, of course, boundless love. It’s time to propose to this special person. How much should someone spend on an engagement ring?

Read: This Credit Score Mistake Could Be Costing Millions Of Americans

What You Should Know About the Three-Month Rule

You’ve probably heard the axiom that three months’ salary is the appropriate amount to spend on a diamond engagement ring. This amount is actually based on a highly successful marketing campaign by De Beers, a diamond company, to boost diamond sales and can be traced back to the 1930s.

The company also launched the iconic tag line “A Diamond Is Forever,” successfully tying engagement rings with diamonds and increasing profits for the company. Thankfully this outdated “rule” is not taken as literally as it once was as quality rings can be found in any budget range.    

What’s the Average Engagement Ring Cost?

According to The Knot, the average engagement ring cost in 2021 was $6,000. Keep in mind that this figure is not a benchmark. It is a national average of all engagement ring purchases and is influenced by a variety of factors, the most noticeable being region.

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Moreover, on average, young millennials and Gen Zers think an engagement ring should cost less than $2,500, according to a survey conducted by The Harris Poll, on behalf of TD Ameritrade. They tend to reject the three months’ salary axiom, while younger couples often foot the bill for their own weddings, making less money available for the engagement ring.

So, is $20,000 a lot for an engagement ring? Yes. Instead of stressing about a budget that’s out of your reach — or taking on a mountain of debt — spend an amount that you can afford. The marriage is worth so much more than jewelry, no matter how much it costs.

Should You Go Into Debt To Buy an Engagement Ring?

Purchasing a diamond engagement ring should probably not land you in debt. An investment has the potential to make your money grow, and a diamond’s value isn’t likely to increase over time.

How much you spend on a diamond does not reflect how happy your marriage will be. Actually, one of the top reasons why couples divorce is because of finances so starting a marriage by taking on more debt might portend a rocky future.

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How To Shop for an Engagement Ring

Here are seven factors to consider when it’s time to buy that perfect engagement ring.

1. Set a Budget

Setting a budget for your engagement ring should be part of your overall budgeting strategy.

How much can you afford to spend? Set a budget before you go shopping so that you don’t get talked into spending more than you can afford. These days, more and more couples are shopping for the engagement ring together, which has many advantages:

  • Ring shopping is an experience you can share.
  • No guessing about what size to get.
  • They can try on rings and see what they like best.

There is a huge variety of engagement rings with different bands, different stones and different cuts to choose from. An engagement ring is an important purchase that you want your spouse-to-be to be happy with, so it makes sense to shop together. Certainly, you lose the element of surprise, but you can make the way you propose a surprise instead.

Debt for Millennials and Gen Z

Today, many women often earn less than men, while couples are often saddled with student loans and other debts. This may be why the majority of Gen Zers and millennials think spending less than the national average engagement ring cost is appropriate.

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Setting a budget together will set you up for a sound financial future. The wedding and engagement industry may want you to think that the more you spend, the happier your marriage will be, but that’s not entirely true. It seems that there’s a sweet spot.

Financing a Ring

If you must finance a ring, look around for a credit card with 0% financing and pay it off as quickly as possible. Jewelry stores have financing options, and some may offer 0% for a certain period of time.

But be careful, because if you take longer to pay than the 0% interest period, you’ll get hit with the financing costs starting from the date you took out the loan. Spend what you can afford right now. Keep in mind you can always get a nicer anniversary ring later on.

2. Comparison Shop

Visit a few different jewelry stores to get a sense of what’s out there. The markup on diamonds at a jewelry store can be up to 200% of the original cost. If you go shopping at Tiffany’s or Cartier, you’ll pay more, but there’s some wiggle room, and some jewelers may have better prices than others.

In general, chain jewelry stores are more expensive because they have higher overhead and advertising budgets.

3. Negotiate

You can negotiate on more expenses than you might think, and engagement rings are one of those things. Find either an independent jeweler or a wholesaler and have at it. Here are some negotiating tips you’ll want to keep in mind:

  • Go when the store is quiet — jewelers don’t normally want to negotiate in front of an audience.
  • Make sure the person you’re talking to has the authority to negotiate.
  • Don’t go shopping during busy seasons such as Valentine’s Day or Christmas.
  • Mention you’re shopping around.
  • Be prepared to walk away.

Even if you receive only 5% to 10% off the sticker price, the savings can be hundreds of dollars. Make sure the diamond is certified by the American Gemological Appraisal, which is how you’ll know that the ring is worth what you’re paying for it. All diamonds are pretty, but unless you’re a gem expert, it’s hard to tell a quality stone from an inferior one.

4. Shop Online

You’re more likely to get a good price from an online retailer because they have lower overhead costs. Make sure you shop with a reputable jeweler and read reviews before you shop, and that the ring is certified.

You can save money by shopping online, or you can use the information you find to negotiate a better price at a local jewelry store. If you decide to buy from an online retailer, make sure the ring shipment is insured and that there’s a money-back guarantee.

5. Consider a Different Stone

Diamond engagement rings weren’t a thing until just after World War II. Consider a sapphire — it worked for Princess Diana. Sapphires can make for great engagement rings because they’re strong and have great hardness. Emeralds and tanzanite, on the other hand, are more delicate and prone to chipping.

6. Sacrifice Clarity, Carat Weight or Color

You can save money by going with a smaller stone. You can also save money by getting a lower clarity rate, given that diamonds are graded according to how close to colorless they are.

Color

Completely colorless diamonds are graded D and go all the way to Z, which would be slightly yellow or brown-looking. While you can probably tell a Z graded diamond from a D, you likely can’t tell the difference between a G and an H.

Clarity

Likewise, diamonds often come with tiny dings and birthmarks. The complete absence of these marks occurs in flawless diamonds, which are both very rare and very expensive. Diamonds are rated on a scale from Flawless, noted as FL, to Included, which means they have flaws that are obvious under 10 times magnification.

Going with a less-than-flawless diamond can save you some money.

Cut

The one thing that you want in a diamond is a great cut. The cut is a major contributor to the diamond’s cost and is responsible for the sparkle and brilliance.

A lower-quality cut will look okay when you buy it, but over time it will start to look less clear and it won’t shine as brilliantly. Cuts are graded from Excellent — the top 3% of diamonds — all the way down to Poor.

Consider getting something other than a round brilliant diamond, which is the most expensive cut. Round brilliant is also the most popular cut, but consider these other lovely cuts that can save you money:

  • Pear
  • Oval
  • Square
  • Marquise
  • Emerald

7. Buy Vintage

For a truly unique engagement ring, consider buying an antique ring. Talk to your spouse-to-be about this before jumping in, as some people love history and some people just don’t. Vintage means that you’ll guarantee not everyone else has a ring that looks just like yours, and older diamonds typically cost less than similar modern diamonds.

Final Take

Despite what diamond companies would have you believe, the success of your marriage does not rest on what engagement ring you choose. The ring is a symbol of the love you have for each other, but it doesn’t define your relationship. Whether the price tag is above, below or right at the national average engagement ring price, what’s most important is that you purchase something you can afford, that your intended spouse will love.

Elizabeth Constantineau and Jennifer Taylor contributed to the reporting for this article.

Information is accurate as of Oct. 2, 2022.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Gail Kellner is a freelance writer specializing in personal finance and investing. She has written for Bankrate, Retireable, MoneyGeek, and a host of other small business websites. She is located on the east coast, in Massachusetts where she lives with her sons and her husband.
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