How Much Should I Spend On My Engagement Ring in 2022?

The Old Adage, Spend “3 Months Salary” on an Engagement Ring

We all know the old suggestion to spend 3 months salary on your engagement ring. Though that gives us a good estimate on how much one should spend on their proposal, the younger generation is becoming noticeably more thrifty. According to this report by P. Smith, the average cost that an American spent on an engagement ring in 2020 was $5,500. This may seem low to you, because the current price of a decent one carat diamond is roughly $8,000. The average price of $5,500 suggests that most people may be buying diamond rings that are under 1 carat, or set with other precious stones, like rubies and emeralds. 

Recent Trends in Spending on an Engagement Ring

The federal minimum wage in 2020 was $7.25 an hour, meaning that someone who works 40 hours a week would be able to save 40 hours x $7.25/hr = $290 per week. Multiply that by 12 weeks (3 months) and we get $3480. Interestingly, the average amount an American spends on an engagement ring in 2020 is actually equal to about 5 months salary on minimum wage. 

According to the report by P. Smith, average spending begins to fluctuate depending on location. For example, people living in the Mid-Atlantic region spent the most, at an average of $7,600 on an engagement ring, compared to those living in the Southwest, who spent the least at an average of $5,200. 

Interestingly, recent trends lead to the understanding that people nowadays are more accepting of engagement rings with gems other than diamonds. For example, rings with other precious stones are ever increasingly popular, such as rubies, emeralds, and sapphires. Not only are other precious gems becoming more popular, simple bands are making a comeback as well. Plain gold rings and simple wedding bands are fashionable now as well and some people may even prefer the simple look of a plain proposal ring. Moissanite and lab grown diamonds may also offer insight into how the average dollar amount spent is lower than you may think. As these synthetic diamonds become harder and harder to tell apart from the real ones, more people are choosing to go with a lab grown diamond and to save the money for a home or their weddings. To a casual viewer, it is nearly impossible to tell the difference between a lab grown diamond versus a natural one. 

How Much Should I Spend: The Hard Truth

The simple fact of the matter is: you should only spend what you can afford on an engagement ring. No matter what type of ring  you choose, your significant other will no doubt appreciate the effort you spent in deciding what ring to buy and proposing with it. If you are comfortable with spending 3 months salary or more on an engagement ring, by all means go ahead; if not, there is no shame in spending what you can afford for your engagement. The spectacle and meaning of your proposal will no doubt be more of a factor than the ring itself. What I mean is you should only spend what you are comfortable with. Do not buy an engagement ring on a credit card without a solid plan to pay it back. I have found it easier and more rewarding to save for the engagement ring, and buy it when you have reached your savings goal. 

What to look for in choosing an engagement ring?

There are a myriad of options to sift through when choosing your engagement ring. From choosing the type of band, the material used (like silver, 14k gold, 18k gold, or platinum), to the diamond itself, it may become disconcerting. The simplest way that I have found is to think about what type of ring your intended will like. If she prefers a simpler style, perhaps choose a ring without too many flourishes. On the other hand, If she likes intricate styles, go crazy with the design of the ring. In the end, the only thing that matters is that she likes the ring.

Where to save money on engagement rings?

If your family has some jewelry that has been in the family for generations, one method I have seen work with success is repurposing the stones into engagement rings. For example, diamond earrings or pendants can be taken from the earring and crafted onto a new band. Another option would be to pick a cheaper material for the ring band, like 14k over 18k gold. The diamond itself should not be an area to consider cost-cutting in. A near flawless diamond will retain value and be much easier to sell if it comes down to it, versus a cheaper, more flawed diamond. 

How to make my proposal ring look better?

One way to make the ring more attractive is to consider the ring box that it comes in. If the ring was purchased from a large retailer, it is likely that they have branding all over the ring box. If it was purchased through a local jeweler, the box is likely poor quality and diminishes the beauty of the ring within. If you are spending thousands of dollars on an engagement ring, why not spend an extra couple dollars to get an unbranded, beautiful proposal ring box that will enhance your engagement ring.  

What to do if she doesn’t like it?

Don’t worry. Luckily, most jewelry will retain some value, unlike cars or other luxury items. Depending on the stone and the type of gold used, you may be able to get 50% of the cost of the ring back. If your significant other doesn’t like the ring you chose, just sell it back to the shop and pick something together that they will enjoy. This is not an uncommon scenario. I have even heard of many couples selling their original engagement ring to upgrade to a more expensive one as their income increases.