How Much Should an Engagement Ring Cost?
As I’m sure you’ve heard, the old adage advises an engagement ring should cost roughly the equivalent of two months’ salary. That out-of-date advice came from a De Beers marketing campaign to create buzz around diamonds.
If we were to do some quick math and look at median weekly earnings over the last quarter in 2020, the most recent data from the Bureau of Labor Statistics indicates that would equal $7,872 (based on 8 weeks.)
However, according to The Knot 2020 Jewelry and Engagement Study, the average cost of an engagement ring was $5,500 in 2020. Keep in mind, that this average engagement ring cost is a national average taken from respondents all over the country.
Average Engagement Ring Cost By Region
In their findings, The Knot broke down the average engagement ring costs by region, which does shine a little more light onto this national average of $5,500.
Also noteworthy, 25 percent of respondents spent between $1,000 - $3,000 on a ring, while 11 percent spent $1,000 or less.
How Much Should an Engagement Ring Cost?
If you haven't already guessed, the overarching theme to this blog is that no single price range is right for everyone. So, how do you decide how much to spend on your engagement ring?
Start with choosing one of these four strategies:
Set an Engagement Ring Budget and Stick to It
There are many factors that come into play when figuring out your engagement ring budget. After all, it’s possible that your finances will merge once you get married, so it’s best to think about your financial future as a whole.
Here are a few things to consider when budgeting for your engagement ring:
Your current income.
Your monthly expenses like food, rent/mortgage, bills and re-occurring debt (like student loans and car payments.) Make sure you can still pay for these things while budgeting for an engagement ring.
Your savings. How much have you saved up already and how much more money could you save if you cut down on unnecessary spending?
Preference. What does your spouse-to-be want in a ring? If a large diamond is on her mind, do your best to accommodate her wishes. If she’d like to go with something a little simpler, then scale back your budget.
The only downside to budgeting before checking out any rings is that you may find yourself (or your fiancée-to-be) disappointed with the ring options available.
Instead of budget first, ring second, you could ...
Ring Shop, Then Save
Especially if this is your first major jewelry purchase, you may wind up with a more satisfying result if you determine exactly what parameters your ring must meet to satisfy your expectations before determining a hard-and-fast budget.
Make a date of it and do some ring shopping together.
If you’re willing to stick out the pre-engaged phase for a little while, picking your dream ring and then saving up to pay for it straight-up is a great option. After all, the average time spend looking for a ring is about 3.5 months, with the average number of rings looked at before purchase is 26.
Finance Your Ring Purchase
Already have a dream ring in mind? One that doesn’t quite match your cash flow?
If waiting to get engaged isn’t an option, or at least isn’t a preferable option, there’s always financing.
Just keep in mind that whatever debt you take on pre-marriage will follow you both into your married years, when you’re likely to accumulate more debt from additional large purchases.
Money Under 30 has a great guide to financing an engagement ring.
Buy Smart, Upgrade Later
Maybe you have a specific ring in mind that doesn’t fit your current budget, but financing doesn’t appeal to you either.
Consider choosing a more affordable ring now, with a plan to upgrade a few years down the road.
Many jewelers have trade-in programs that allow you to purchase a new piece for up to double the value of the item you’re trading in. If you’re not overly sentimental about the exact diamond presented in the proposal, this route could be just right.
Even if you aren’t too keen on parting with the memory-laden diamond that made you a fiancée, you can always work with your jeweler to choose or design an affordable ring that’s conducive to upgrading without sacrificing too much of its original integrity.
How much should an engagement ring cost? In the end, it should cost as much as is right for your preferences, goals, and budget. Hopefully the four strategies above help get you started in the right direction when buying an engagement ring.
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