The Correct Amount To Spend On An Engagement Ring

So you're ready to pop the big question. Getting engaged is a big moment in your relationship, and it's normal to be a little nervous. One of the biggest concerns people have about proposals is how to get the engagement ring right. More specifically, how to spend the correct amount on the engagement ring.

The old-fashioned tradition says that you should spend at least two months' salary on a ring. If you and your partner value this tradition and have an agreed-upon expectation, there's nothing wrong with this. However the two months' salary rule simply isn't realistic for everyone, and most people are spending a much smaller portion of their incomes on engagement rings.

According to The Knot 2022 Real Weddings Study, the average cost of an engagement ring in the United States is $5,800. While this is a reasonable amount for some, there are still many engaged couples spending far less — and more — than this. Determining the budget for your engagement ring will come down to a few key factors.

What does the ring mean to you?

An engagement ring means different things to different couples. You should decide what it symbolizes for your relationship before setting a budget. For some, an engagement ring is purely sentimental and the monetary value is irrelevant. For others, the ring serves as a financial investment in your future household, in which case the cost matters quite a bit.

The first question to ask is who is getting the ring. In a heteronormative relationship, the man usually gives the woman an engagement ring when he proposes. Of course, not every couple has that dynamic. You and your partner may be exchanging engagement rings, or perhaps the person who proposes gets to give the ring, regardless of gender. Knowing how many rings you're buying and who is responsible for paying for them will help build the framework for your and your partner's budget. 

You'll also need to figure out where an engagement ring sits on your list of financial priorities. Do you want the ring as an emergency nest egg for down the road, or do you have more urgent expenses that need cash upfront? Consider both your current expenses — including debt — as well as important expenses in the near future, such as a down payment for a house. Once you have a clear view of your finances and financial goals, you can find where the engagement ring fits in.

Diamond prices

Diamonds are still the most popular stone for engagement rings. If your partner hasn't expressed any engagement ring preferences, it's probably best to play it safe and stick to a traditional diamond.

Diamond pricing gets a little confusing if you aren't familiar with the jewelry industry. Per the Diamond Prices Index posted by Fairfield County Diamonds, a loose diamond that is less than half a carat is currently worth around $2,000, while a loose diamond that's 5 carats is worth closer to $28,000. Keep in mind that a carat is a measurement of weight, so you can get a relatively inexpensive diamond that's thin on the sides but still has a wide surface area on the top.

Aside from size, the price of a diamond will vary greatly based on other qualities, such as clarity, color, and symmetry. While you could spring for the technically perfect gemstone, it might not be worth the extra money. Let's face it: All diamonds are gorgeous, sparkly rocks. Unless your partner is a professional jeweler, they won't be bothered by barely noticeable imperfections.

If you're budgeting for a real diamond ring, don't forget to factor in other expenses, such as the value of the setting and the cost of insurance. A diamond ring will have a band made from a precious metal, such as gold or platinum. Sterling silver is the most affordable precious metal, but it's also the least durable. As for the insurance, always get a comprehensive insurance plan for your fine jewelry.

Alternatives to diamonds

Diamonds don't fit into everyone's budgets, and many people actually prefer other stones over diamonds. If you're looking for alternative stones for engagement rings to lower your overall costs, you have many options.

Lab-grown diamonds are a great choice if you want a diamond ring that costs less and has none of the ethical quandaries of mining. A lab-grown diamond is a real diamond that's made in a lab environment that replicates the natural conditions that produce diamonds. While a lab-grown diamond is still pricey, it often costs less than half the value of its mined counterpart.

You can also forego diamonds altogether for other attractive stones. Moissanite is a natural gemstone that has a strikingly similar appearance to a diamond. This stone is only slightly less durable than a diamond but comes at a small fraction of a diamond's price. Other popular alternative gemstones for engagement rings include opal, moss agate, and aquamarine. Any natural stone that's softer than a diamond will likely be more affordable.

Synthetic stones are also worth considering, especially if you have a super low budget. For instance, high-quality cubic zirconia is quite inexpensive and has all the shine and sparkle you get from diamonds. With advances in chemistry and engineering, even the cheapest synthetic stones have an attractive look. So if you can't afford any stone that's close to being real, don't sweat it — you can still give your future spouse a beautiful ring with sentimental value.

Save now, spend later

When in doubt, save your money. A fancy engagement ring isn't worth putting yourself and your partner in a bad financial situation. It's becoming more and more common for couples to discuss marriage before getting officially engaged. If the massive diamond ring isn't a reasonable option, you should communicate that to your partner before you propose and find another way to make the engagement ring special.

If you don't feel great about the amount you spend on an engagement ring, remember that you can always upgrade it later on. Modifying the ring or buying a new one is a lovely anniversary gift that will keep the romance alive and make you feel like newlyweds all over again.

The average engagement lasts about a year, but you're planning to be married for a lifetime. Buy the ring you can afford now and focus on your future financial growth as a couple. No matter the size or value of the engagement ring, it will always be priceless to you and your spouse.