How Much Should an Engagement Ring Cost?
When you’re in the market for a ring, here are some things to consider:
- How much you need to set aside for your wedding and honeymoon,
- Where you live—prices vary a lot,
- Your current and predicted income,
- Your savings and your other expenses,
- Your partner’s input—they may have their own ideas
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 quarter of women want input on the ring budget.7