How Much Should You Spend on an Engagement Ring in 2021?

When you’re in the market for a ring, here are some things to consider:

Spending between one and three month’s salary for an engagement ring is a long-standing tradition. But millennials, generally saddled with student loan debt and high costs of living—and waiting longer to get married—have thrown out this old rule of thumb. Less than half of millennials spend two month’s salary.¹  Instead, they often reallocate those funds into experiences, like the honeymoon or the wedding.

Today, the median American spends about 4% of their annual pretax income on an engagement ring, which roughly equates to two weeks salary.² (Median means middle—there are as many people who spend more as there are who spend less.) That’s still a substantial sum: A one carat engagement ring typically costs around $5,500.³ But most couples have no idea what diamonds cost: they set out to spend between $1,000 and $5,000, yet the average cost of an engagement ring ends up being over $6,000.⁴ Statistically, spending for engagement rings has a long tail: 7 percent of Americans spend over $10,000.⁵

Where you live also may impact your budget. New York City and Chicago boast the biggest average diamonds, at 1.45 and 1.29 carats, respectively.⁶

There’s no one-size-fits-all formula. How much you spend on an engagement ring is a very personal decision. Experts say you should consider your current and predicted income, expenses, and savings, then establish a budget and stick to it. Don’t go into debt just to “keep up with the Joneses.” Consider input from your partner: for example, a third of women want input on the ring budget.⁷

To help you get the most for your money when buying an engagement ring, experts suggest:

Engagement ring spending stats reflect how both millennials and older couples who are remarrying are changing the dynamic of buying engagement rings.

People are getting married later, with more life experience and a more developed identity. As a result, they want greater originality in what they purchase, how much they spend, and how they buy. These expressions of individuality have manifested in several trends: unusual stones, settings, colors, shapes and styles. More couples are opting for sapphire, emerald, moissanite or lab diamonds because they are unusual, affordable, and sometimes more socially responsible (not “blood diamonds”).

Only 70% of millennials stick with traditional diamonds, in contrast to 80% of couples in 1990.^9,10 Older couples getting married for a second time are making a similar shift, seeking unique engagement rings that reflect their personalities.

And the importance of the ring itself is declining, replaced by the proposal and other experiences. More than 50% of women say they’d prefer a fairy-tale proposal over a large engagement ring, and 46% are even willing to split the cost with their partner.^11,12

The best way to buy an engagement ring is to be an informed purchaser. Whether you purchase online or at a brick-and-mortar store, if you’re opting for a diamond it’s important to do your research on the “four Cs”: Cut, Clarity, Color, Carat. And possibly on a fifth “C”—credit.

If you prefer to see and touch a purchase before pulling the trigger, the best way to buy may be from a:

But many believe the best way to buy an engagement ring is via online retailers, where the average cost of an engagement ring tends to be about 40% lower than at local jewelers.¹³ Many diamond websites allow users to search available stones based on their desired mix of the four Cs, and have setting-design features to help shoppers achieve the unique customized rings they seek. However, beware of bogus websites; reputable sites will be able to provide diamond certification which can be cross-checked with tools like Report Check from GIA. Reputable online jewelers will also insure your shipment and offer a customer-friendly return policy.

Experts agree the best way to pay for an engagement ring is with cash. Cash may provide more negotiating power with a jeweler and helps you avoid a possible debt hangover from financing. But a 0% APR credit card with an introductory promotional period that aligns with your ability to pay off the balance is another payment option. This scenario offers flexibility, gives you extra time to pay, and the ability to pay extra whenever you can. It may also allow you to earn rewards or a sign-up bonus, depending on the card terms, since sign-up bonuses typically require a short-term spending threshold.