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How much should you spend on an engagement ring?

Mediafeed logo Mediafeed 9/15/2021 Anna Davies
a close up of a person: engagement ring © engagement ring

You may have heard that you should spend anywhere from one to three months’ salary on an engagement ring. But these rules of thumb (formulated and advertised by the diamond industry) are now considered pretty outdated.

Instead, it can be a good idea to consider not only your income, but also your savings, current debt, living expenses, other costs involved in planning the wedding and (bottom line) what you feel comfortable spending.

How you plan to pay for the ring can also impact how much you can afford to pay for it. Options include paying cash, using a credit card, financing the ring through the jeweler or using a personal loan. And each payment avenue has its pros and cons.

What follows are some guidelines that can help you figure out how much you should spend on an engagement ring, as well as how you may want to make the purchase.

Related: Handling a financial windfall

The average cost of an engagement ring

According to The Knot’s 2020 Jewelry and Engagement Study, the average cost of an engagement ring is around $5,500.

While that number may represent the average, the amount couples actually spend on a ring varies widely. In The Knot’s study, 25% of respondents spent between $1,000 to $3,000 on their engagement ring, and 11% shelled out less than $1,000.

Why do rings vary so much in price? The cost of an engagement ring depends on a number of factors, including the size and quality of the stone, where the gem was sourced, how the gem is set and the type of metal chosen (such as yellow gold, white gold or platinum). There may also be mark-ups that come along with a popular brand name.

Diamond engagement rings, sourced from a mine, tend to be the most expensive choice. But there are many other less costly options, such as lab-grown diamonds, moissanite (a lab-grown gem that looks like a diamond), and semi-precious gemstones (such as tourmaline, morganite and aquamarine).

Whether you’re in the market for a large, eye-catching dazzler or a more dainty design, the good news is that these days there are ways to accomplish almost any look for a range of price points.

How to pay for an engagement ring

While paying in cash can be the simplest (and often the cheapest) option, it may not be feasible for all couples. Below are some other payment options that you may want to consider, along with their pros, cons, and potential costs.

Financing an engagement ring through your jeweler

Many jewelers offer financing options, but just because you’re buying from a jeweler does not mean you have to use the financing they offer. It can be a good idea to take note of the following:

  • Promotional offers: Some jewelers offer a 0% introductory interest rate during a set period of time. But after that period of time, interest rates may be quite high.
  • Down payment requirements: Some jewelers may require a certain percentage down payment prior to financing.

Financing through a jeweler directly may make sense if you’re confident you can pay back the loan prior to the end of the promotional period. As with any loan, it’s likely that there will be a credit check prior to being approved for financing.

Buying an engagement ring with a credit card

Putting a large purchase like an engagement ring on your credit card can be a simple solution at the moment, but may become a financial headache in the future. Here are some things you may want to consider before getting out the plastic.

  • Interest rate: Putting the engagement ring on a card with a relatively high-interest rate means that the ring will end up becoming more expensive over time. You may also want to keep in mind that many credit cards have a variable interest rate, which means the interest rate at the time of purchase could rise over time.
  • Credit-utilization ratio: A large purchase like an engagement ring may mean using a significant percentage of credit available on your card. Having a high credit utilization ratio may negatively affect your credit score.
  • Rewards and protections: Some buyers like putting large purchases on credit cards because of the consumer protections offered by the card. They also may want to take advantage of the rewards offered by the credit card company. Those rewards, however, may only be worth it if you can pay the amount back in full at the end of the billing cycle or during a 0% interest promo rate.

Using a personal loan to finance an engagement ring

A personal loan is another avenue for making an engagement ring purchase. A personal loan from a bank or other lender may have a lower interest rate than a jeweler financing program. A personal loan also works differently than a credit card or financing a purchase. With a personal loan, you’ll get the money in your bank account, and pay the jeweler as though you were paying in cash. You would then pay back the loan in monthly amounts set out in the loan agreement.

Here are some things you may want to consider before using a personal loan to pay for an engagement ring:

  • Interest rate: In many cases, a personal loan interest rate is fixed, meaning it doesn’t change after the agreement has been signed. This means that you know exactly how much you will need to pay back for the length of the loan.
  • Loan terms: You may have an option to pick the length of the loan. Shorter loans may mean you’re paying less interest over time, but you have larger monthly payments.
  • Loan costs: There may be fees associated with the loan, including an origination fee when the loan begins and a prepayment penalty if the loan is paid before the end of the agreed-upon term.
  • “What if” scenarios: Some lenders provide temporary deferment for people facing financial hardship, such as a job loss.

The Takeaway

Spending between one and three month’s salary for an engagement ring is a long-standing tradition, but these days there is no one-size-fits-all formula. How much you spend on an engagement ring is a very personal decision and will depend on your current and predicted income, current debt, expenses, savings, and preference.

If paying for an engagement ring upfront in cash isn’t feasible, you may want to look into different financing options and compare their pros, cons and costs. Your jeweler may offer financing, for example. Or you may be able to take advantage of a credit card that has a 0% or low introductory interest rate and pay the balance off before the rate goes up.

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This article originally appeared on and was syndicated by

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