Determining how much to spend on an engagement ring can be a hard thing. This is especially true due to there being many different engagement ring buying rules out there.
The most known engagement ring budget rule is probably the three month rule. This is where the engagement ring buyer determines how much to spend on an engagement ring based on what they make over a three month period.
So, if a person makes around $3,000 a month, that would mean that the engagement ring “should” cost around $9,000 according to the three month ring buying rule.
That is a ton of money for someone to spend on an engagement ring, especially when that’s just a total income of around $36,000 a year!
I am going to say OUT with this old ring buying rule.
Spending 25% of your annual income on an engagement ring just seems crazy.
Insane even.
I know I’ll probably get some flack for saying that, but I think busting your budget for an engagement ring is usually not a good idea…
Here are my tips to help you determine how much to spend on an engagement ring:
Create your own engagement ring budget.
When determining how much to spend on an engagement ring, you should first create a budget.
Throw out any rules that you have ever been given when it comes to buying an engagement ring and create your own budget.
Everyone lives different lives, and for there to be one single rule to apply to everyone just doesn’t make any sense.
When creating your engagement ring budget, you should think about:
- How much debt you have;
- How much your wedding will cost and whether you can afford it;
- How you want to start off your marriage financially;
- Whether you are making more money than you spend each month;
- Your financial goals; and more!
I recommend JamesAllen if you are looking for beautiful engagement rings on a budget.
Save up exactly what you need before you buy an engagement ring.
Before you set out for the jewelry store, you should try to save up as much money as you can for it. This is so that you can skip the financing when deciding how much to spend on an engagement ring.
Financing a ring is something that you almost always want to skip, unless you know exactly what you’re doing, such as if you are given a 0% interest rate and you know how to 100% use it to your advantage (such as by already having that money saved up).
Financing is usually a bad idea because it can cause you to spend more money on an engagement ring than you can actually afford. When something is divided into monthly payments it may seem more affordable to a ring buyer, when in reality it is not!
Find an affordable engagement ring.
There are many affordable engagement rings out there. You don’t have to spend a ton of money on an engagement ring if you do not want to.
Also, if you want to spend a ton of money on an engagement ring, there is nothing wrong with that either! As long as it’s in your budget, you can do whatever you want to do. No one is going to stop you, but my piece of advice is to make sure that buying that expensive ring doesn’t stop you from reaching your financial goals in life.
Here are my tips for buying an affordable engagement ring:
- Buy less than a full carat size. For example, instead of buying a ring that is 1 full carat, you could buy one that is 0.90 or 0.95. This is because many diamonds are cut to the exact amount, and buying something that is slightly less means that the value has gone down. The difference is so insignificant anyways so it can be a great way to save money, and it’s not like anyone would ever notice.
- It’s not always about size. If your budget isn’t that high, it’s usually better to go for a more quality ring instead of focusing just on size.
- Buy diamonds which are eye-clean although possibly not internally flawless in order to save money on an engagement ring. Who is going to go up to the engagement ring with a magnifying glass anyways? As long as it looks great to you, I’m sure it’s still a good choice.
- Buy an engagement ring online. Buying online usually means cheaper prices and a greater selection. Sites like JamesAllen offer many affordable engagement rings starting at just around $1,000 and go up from there. You can save on your engagement ring by buying from JamesAllen.com.
- Go for something different. There’s MoissaniteCo (if I ever need a new ring, a moissanite ring is one I will probably get!) where you can get a beautiful moissanite ring for an affordable price. Or you could even go for a different gemstone and save money over having a diamond.
How do you think a person should determine how much to spend on an engagement ring? How much have you spent on an engagement ring or how much is the one that you’re wearing?
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Ali @ Anything You Want says
The rule of thumb of buying a ring that costs 3 months salary is truly insane! I like the idea of more unique engagement rings, maybe with other stones instead of a diamond. Other stones are equally beautiful but cost a whole lot less!
Michelle Schroeder-Gardner says
I agree! I love unique rings.
Erin@BeetsPerMinute says
I will probably get backlash for saying this, but I didn’t want an expensive ring at all. Quite frankly, there are more important things like the love you have and when it comes to the ring — the things you want together in your future to spend that kind of money on. My ring cost very (and I mean VERY) little and I get compliments on it all the time. I’m also somebody who had a very small wedding with 15 people in my family home, so I’m probably not the leading expert on this stuff. I just think it’s ridiculous the money people drop on things like engagement rings and weddings. I’m not trying to put people down for having expensive rings or big weddings, I mean if you HAVE that kind of money, go for it. I’m talking about people who are struggling financially to afford the cost of an extravagant engagement ring who hang themselves out financially for years paying for it all.
Michelle Schroeder-Gardner says
Yes, I know exactly what you mean. My ring was very affordable. Whenever I tell people that, they don’t believe me. I love my ring and it’s definitely possible to find a beautiful one for an affordable price.
Chris @ Flipping A Dollar says
My wife wanted a pearl. I thought this was a pain in the ass since most places didn’t have any different style pearls until I found Na Hoku! Then I saw that pearls are actually a lot cheaper, easier to replace, everyone always asks her about it, and finally, pearls are HUGE compared to other gemstones, so lots of people just assume it was really expensive. 🙂
Michelle Schroeder-Gardner says
Great idea!
Luke Fitzgerald @ FinanciallyFitz says
The advice of “Skip the financing” solves a majority of people’s problems. That way, you buy only what you can afford. And if you’re in debt you buy way less than you can afford. Nothing looks as good as living debt-free. I think you’re exactly right in asking that list of questions about your financial future. Actions today have consequences tomorrow.
I’m probably in the majority, but I’ll say it anyway – you can always upgrade later!
Michelle Schroeder-Gardner says
Yes, you can always upgrade later if you truly want to!
Heather says
I don’t even want a ring, for a variety of reasons. I don’t wear jewelery, the diamond industry is pretty much evil, I hate the symbolism of it (I don’t mind wedding rings since both wear them), and I think it’s insane to spend that much money on a ring. I hate when people say “I’ll propose when I can afford the ring.” What the hell? If you love someone, want to spend your life with them, do it! You don’t need a freakin’ ring, or an expensive wedding.
I have somewhat strong views on the matter 🙂
Erin@BeetsPerMinute says
I agree with this!
Michelle Schroeder-Gardner says
Same here Erin!
Michelle Schroeder-Gardner says
Haha All great views to have Heather!
Abigail @ipickuppennies says
I made my husband get an engagement ring too. I told him that if I had a big ole “back off!” sign, he’d have one too. He got a cool sapphire one, so he was happy to comply.
Michelle Schroeder-Gardner says
Wes actually just broke his rubber ring (he has a “real” one but it scratches everything up) that he wears 24/7 so now he has nothing to wear. I need to get him one!
KimberJ says
I agree completely with you and the comments. I think another big mistake couples make is convincing themselves that a large expensive ring is an “investment”. An investment is something of value you’d be able and willing to liquidate for cash. An engagement ring should be a symbol of enduring love not something you hock in a pinch. The biggest factor is that resale value on a ring is usually only 10-25% of what you paid for it. Generally the only way you get more than that is if you trade it in for a more expensive piece at the original jewelers. An investment diamond should be flawless, preferably colored, and 3-5 carats or larger. 2 carat stones and smaller are a dime a dozen at any jewelry store.
Michelle Schroeder-Gardner says
Yes, exactly! It shouldn’t be considered an investment.
Fervent Finance says
I just did the 3 month rule math for me, and that’s SCARY. No thanks. I wouldn’t want to be with someone who expected me to pay that much for a ring. I’d want them to want me to use that money to invest or pay down debt! It’s a little faux pas, but I’d want to talk about it with my spouse. I’d want to know what they wanted and what they expected. Make sure we are on the same page 🙂
Michelle Schroeder-Gardner says
I don’t think there’s anything wrong with talking about it to them. Who cares!? Do whatever you want to do. 🙂
kammi says
Yeah…my parents don’t even wear their wedding rings and I don’t even recall ever seeing an engagement ring…and they’ve been together for longer than I can remember and they still love each other. They had a small wedding, too. Your relationship and having common values are more important than some ring. If she whines and complains that much, she probably isn’t the girl for you anyways. She should love you because she loves spending time with you and wants to share her life with you, not because of some ring; sorry. So after you go broke and become indebted buying her some ring just so she can show off to friends and family, there’s no money left over for a house, raising children, etc? No thanks.
Michelle Schroeder-Gardner says
I agree!
Chonce says
Great post Michelle! For me, an expensive engagement ring is not the end all be all. I would actually feel slightly guilty if someone spent 3 months’ salary on my engagement ring. I would much rather put more money into building a life together. Shopping online and avoiding financing does seem like the way to go though.
Michelle Schroeder-Gardner says
Yes, I would rather put that money towards something else!
Kristi says
I agree completely with you and everyone in the comments. Spending that much money on a ring is beyond ridiculous. My engagement ring cost around $200. For our wedding bands we actually melted down my grandparents’ platinum bands and had them reformed into simple bands in our size. It was far more important for me to have something with meaning than something that had to be financed for three years.
Michelle Schroeder-Gardner says
Wow that’s an awesome idea!
Kristi says
Thank you, Michelle!
Michelle Schroeder-Gardner says
Welcome! 🙂
Michelle Schroeder-Gardner says
Yes, probably created by them!
Renee says
3 months salary is crazy! Granted we tend to have the same views since we are all following a personal finance blog 😉
I have 2 friends, 1 made her fiance pay 6 grand (mind you he only works side jobs) for a ring because she is all about the show, and then my other friends husband made her upgrade her ring so “all of her friends could be jealous”, I wish I were kidding. I’d love for you (if you haven’t already) do a blog post about how to handle close friends who are absolutely ridiculous with their spending, I have plenty of examples I can send you to make it nice and meaty! 😀
Michelle Schroeder-Gardner says
Haha very true. Everyone’s comments today are pretty similar. I wonder how everyone else feels!
Stockbeard says
It doesn’t make sense to spend so much on an engagement ring, when I first heard about that 3 months “rule” I thought “people are totally insane”. Guess what, that “rule” was put in place by the same people who are selling you those rings…
An engagement ring is something you choose in a way that it will mean something to you and your partner. In our case, I chose a beautiful ring from Dior that had the word “OUI” in French on it (that means “Yes”). It particularly worked for us because I’m French (my wife is not), and because “yes” is the best message to show for an engagement ring.
The best thing is that this ring wasn’t really expensive. I can’t remember today how much I paid for it, but it was somewhere between $200 and $500.
My point is, there is jewlery out there than can carry a longer term meaning to your relationship than a stupidly expensive piece of highly compressed carbon.
also, my wife would have killed me if I had spent 3 months of salary on a ring. I guess choosing the right mate that focuses on long term financial goals is also part of the game. If your partner expects you to spent 3 months of salary on jewelry, your future goal of FI is at risk as a couple 🙂
Michelle Schroeder-Gardner says
I would have killed my husband as well if he would have spent three months salary! I would have made him return it haha.
Jack says
Completely agree, but then I’m a man.
Many many women are insanely competitive in a passive aggressive manner, e.g. earlier comments about making her friend insanely jealous.
The ring conversation is a great test for your potential mate. If she prioritizes wasting your money, she’s going to waste “our” money once you’re married, so, bluntly, you’re better off without her.
Personally, I used Blue Nile to purchase the diamond and had a local artisan make the ring. Great selection and savings, and I could use Mr. Rebates to get a nice chunk of cash back. Win and win.
Michelle Schroeder-Gardner says
Good job on using Mr. Rebates as well! Another great tip.
Will @ Phroogal says
Ha, you know it’s a good post when I have no intention of getting engaged but I still read it. 🙂
I also love the idea of 3D printed rings. Low cost but super personal/clever.
Michelle Schroeder-Gardner says
Haha glad I was able to grab your attention 🙂
Money Beagle says
Well, you know that the three month rule was put into place by the top company that mines and sells diamonds, so for them, it’s a great rule! For consumers, it doesn’t make as much sense.
Michelle Schroeder-Gardner says
It doesn’t make sense at all, I agree.
Abigail @ipickuppennies says
Even as a kid, I thought the three-month rule was kind of ridiculous. We spent about $800 on my ring. I didn’t want a huge chunk o’ diamond, since I was sure it’d catch on everything. I chose a flatter design with a bunch of little diamonds. Lessened the price considerably, and I think it’s more unique.
My husband’s engagement ring — I wasn’t going to be the only one tagged as unavailable — we bargained down to $1,000. Not ideal, but it’s really quite lovely and still being worn every day. The wedding bands were about $200 each. He actually lost his band during the move (kind of my fault because I kept putting off getting it resized due to the cost). So a new one is a cool gear ring that moves, which is great for his fidgeting. I think that was $250.
In other words, we spent less than one month of his salary for 5 rings. And even that much I felt a little embarrassed about, given that money was tight.
Michelle Schroeder-Gardner says
Awesome job on saving so much money! Definitely no need to spend any more, especially if you don’t want to.
Zina at Debt Free After Three says
I think your point about taking into consideration how much the wedding will cost is so important. So many people get engaged, buy a huge ring and then can’t afford the wedding they want. I see so many nice rings at Costco for less $1,000. There are also tons of used ones online that have nothing wrong with them!
I don’t have an engagement ring and don’t miss it, but if you’re going to buy one, this post is full of great tips!
Michelle Schroeder-Gardner says
Thanks Zina!
Barry @ Moneywehave says
I love my wife, and she loves her ring but we both agreed that if we had to do it all over again (together) an expensive ring and fancy wedding really are low priorities.
Michelle Schroeder-Gardner says
I wish more people realized this.
Kasia says
Three months sounds insane, that’s like a mini house deposit for some! I could not expect someone to spend that much money on a ring especially when there are so many other priorities. Having said that, if I wanted an expensive diamond I’d rather go buy it myself when I’m financially secure enough. My husband purchased my ring for around $1000 and we chose it together, and our wedding bands cost about $300 for two.
Michelle Schroeder-Gardner says
Sounds like a great value 🙂
Michelle Schroeder-Gardner says
Yes, your ring sounds awesome!
Andrea says
Spending a huge amount of money on the engagement ring is crazy. There is beautiful affordable jewlewry out there. I couldn’t imagine my hubby spending 3mos salary on a ring! I have a list of things I could spend three mos salary on! My ring and the two matching bands were just under $500 and that was agreeably enough. It’s hard enough to make a life for yourself these days nevermind spending a crazy amount on a piece of jewlery.
Michelle Schroeder-Gardner says
I agree Andrea!
Brian says
Personally I would never purchase a diamond online. It is bad enough looking at them in a jewelry store under their ideal light. I went a round about way and purchased from someone who is the evil “middle man” all the commercials warn you about. The advantage to using this guy was I was buying at cost (since he was doing us a favor as a family friend) and I got to see the stone in natural light as well as artificial light. I am happy with my choice and so is my old lady. It will pretty much be the only piece of jewelry I will ever buy her.
Michelle Schroeder-Gardner says
I’ve heard of several people buying rings online and they’ve never had a problem. I would definitely want lots of pictures of it though, and possibly a video.
Kathy says
When we got married we put our money toward a down payment on our first house so I had a gold band with carving which I loved….still do but my fingers got too fat to wear it. However, I told my husband that I expected a diamond {someday}. So 32 years later, he received an inheritance. We invested about half of it and with the rest he got me a 3.2 carat rock that never fails to receive compliments. We had our house paid off, and zero debt. And we already had reserve funds and investment accounts in place so spending the money for the ring didn’t really deprive any other need of funding. I have to say that although it may be shallow of me, I look at my ring every day and love it. But not as much as I love my husband!
Michelle Schroeder-Gardner says
Sounds like you took a good path. I don’t see anything wrong with what you did. I bet your ring is beautiful!
Kris says
I lost my ring years ago. I was sick at the time, but it wasn’t very expensive, it was more the sentimental value. That was 12 years ago. While I would like to have a nice ring, over the years I’ve come to realize I’m not sure I want to spend a load of money on a new ring. I’m happy with my $60 James Avery silver band!! To be honest, I’d rather have a new Mac computer!
Michelle Schroeder-Gardner says
Yes, a new laptop would be great!
Jayson @ Monster Piggy Bank says
Happy 9-year anniversary! Wedding ring is really an important thing to keep us reminded about our vows to our partner. I actually did not consider the cost of it because the moment I and my wife decided on the wedding ring we have now is like the perfect choice for both of us. We were lucky that the rings fit in the expected budget.
Michelle Schroeder-Gardner says
Good job on staying within your budget!
Brittney @ Life On A Discount says
Engagement ring costs is always an interesting discussion. DH and I discussed a budget and he actually went a little over it, but still stayed in the affordable range. He did finance for 12 months at 0%, but we paid it off in 3 months. We have used 0% financing in the past, but we always make sure to pay it off well in advance. I don’t normally advocate financing or credit, unless you really know what you are doing and can implement enough self control to pay it off/not pay interest.
Michelle Schroeder-Gardner says
Yes, 0% interest can be great if you know what you are doing. Wes and I have taken advantage of that in the past before as well.
Michelle Schroeder-Gardner says
Thanks Neil!
Jeremy says
Great tips to save on this important purchase in life … great post!
Natasha says
I’ve recently joined different Facebook Garage Sales groups local to my area and I was surprised at how many people sell engagement rings in there. If you’re thinking about buying a ring, join a couple of those groups and keep an eye open. People are selling theirs for much less than what they were paid for. They are selling them for a few different reasons I’ve seen. Some, obviously, have had engagements fall through and others are upgrading rings and selling their old one. If you go this route, be sure to ask for a receipt just to make sure it’s not fake.
Lisa says
I’ve always thought that 3 months worth was ridiculous. I made it super clear to The Fiance (when he was just The BF) that when he proposes to me, not only would I not want an expensive ring, but I would even get MAD if he got me an expensive ring! As long as it looks nice, I don’t really care how big it is or how many carats there are. That extra money can go towards something else.
Anna@BohaGlass says
The difficulty is that society pushes the idea of status as a material thing.The more expensive the ring the more he loves me. It is hard to escape this kind of ‘bs’ but I think a lot of people are moving away from being obsessed with ‘stuff’ and value experiences more.
Anita Mas says
That’s a good idea to look at the amount of money you have available before you buy a ring. As a woman, I agree that it seems a bit excessive to spend a quarter of your annual income on an engagement ring. You can get something beautiful without going into debt. Maybe I’ll ask for a ring with a different stone.
Millennial Boss says
I have a moissante engagement ring! Everyone always comments on the sparkle since moissanite is more reflective than diamonds, but of course they have no idea!
Best decision my fiance and I ever made!
Gloria says
When my husband proposed and we went out to by the ring I specifically asked for the cheapest white gold diamond ring we could find. Mine cost £100. The ring is just a symbol to show to the world. I feel uneasy when people get hung up about the price of engagement rings as if they quantify the love of their partner for them.
Silas Knight says
I actually agree with you that busting your budget for a ring isn’t the best idea. I think you should spend a good amount of money for a nice ring, but still stay financially stable. Like you said, it’s a good idea to make your own ring budget.
SeizeTheAisle says
Thank you for helping the dispel the old rule! Your goals and your priorities are so much more important than what you are “supposed to spend”. The salary rules for how much you should spend on an engagement ring actually came from a De Beers advertising campaign, although it feels like it comes from some sort of etiquette guide. They even managed to sway popular opinion that engagement rings should have diamonds. It feels like people have been using diamonds as engagement ring stones forever but in the 1930’s (before their ad campaign) only about 10% of engagement rings included a diamond. We ended up bucking the diamond trend and went with a sapphire as the main stone and haven’t regretted it at all.
Elena Tungsten says
For a budget-oriented person like me, I don’t really see the need in spending that much for engagement ring. I just want to be practical in all things. But of course it depends on each person or couple. 🙂