Engagement Ring Price Rules – Should You Follow Them?

rule of thumb for price of engagement ring

You are probably here because you are planning to buy an engagement ring for your proposal but aren’t sure how much you should spend. In fact, you probably heard about the “2-3 month” salary rule or heard conflicting opinions from your friends about setting your budget.

In this write up, we will look at some of the engagement ring price rules that people always talk about. But are these “price rules” applicable to everyone in real life? Or should it be specific to your own situation?

I’ll also reveal tips to help you decide the amount of money you should spend and walk you through the entire thought process. So, let’s cut to the chase and jump right in…

What’s the Average Price of an Engagement Ring?

Before we talk about the common engagement ring price rules that are floating around in the industry, I want to show you some statistics to give you an idea of how much people are spending around the world.

Country/Region Average Engagement Ring Size Average Cost (USD)
United States (US) 1.0 carat $6,000
United Kingdom (UK) 0.6 carats $2,600
Europe 0.5 carats $1,500
China 0.5 carats $2,000
Hong Kong 0.7 carats $4,000
Malaysia 0.4 carats $1,500
Singapore 0.5 carats $2,000

In the United States, the average amount spent is roughly $6,000 but bear in mind that this number is skewed by a small percentage of people who buy very expensive rings. In fact, the majority of US shoppers spend between $3,000 to $5,000 and this can vary depending on where you live.

Now, I know it is human nature to make comparisons against other people. If the average amount is much higher than what you can afford, you shouldn’t feel pressure to match it or get into debt just to finance the purchase.

With that said, let’s take a look at two of the diamond engagement ring price rules that are used by people to set a budget…

#1: The Three Months Gross Salary Rule

cushion cut diamond ring purchase halo white gold

I bought this cushion cut halo ring for my wife with a $3,000 budget.

When it comes to buying a diamond ring, the rule of thumb used in the industry is a 3 month’s salary guideline. This is the rule that most people are familiar with especially if you had done some browsing around or research.

Not coincidentally, this rule was started by a cartel called De Beers who had a monopoly in the diamond mining business. If you obey DeBeer’s rule for spending on a diamond ring, you would be expected to spend at least $15,000 on your ring if you make $5,000/mth.

And you can probably guess that there are flaws in following this price rule since they are established by a company with a vested interest to sell you their products.

#2: The Age Rule

This crazy rule dictates that you buy a diamond ring where the carat size is equivalent to the age of the woman. If the man is proposing to a 25 year old lady, he would be required to buy a 2.5ct diamond ring.

If you are a late bloomer or marrying an older woman, be prepared to break the bank. Marrying a 40 year old woman would require a 4.0ct diamond ring and that’s going to cost you a lot of money.

Realistically, how many people would be able to follow this engagement ring price rule? If you are fresh out of college and planning to get engaged, a 2ct diamond ring is going to be out of reach for most people.

Instead of paying inflated prices at a local jeweler to cover their overheads, consider buying your diamond ring online to get a better bang for your buck. James Allen and Blue Nile are 2 highly recommended vendors to get high quality rings at affordable prices.

So, How Do You Determine Your Engagement Ring Budget?

counting the diamond ring cost

The price of a diamond engagement ring is determined by 2 components: the ring setting and the center stone. If we go even deeper into a granular level, the cost of the diamond would be determined by factors such as the 4Cs and cutting style (shape).

In my opinion, the most important thing you need to is to figure out what your recipient wants and their expectations of an engagement ring.

Why? That’s because the engagement ring is symbolic of your love and commitment to your loved one and if possible, having a conversation would be very helpful. You could also try to get a family member or close friend to find out the information on your behalf.

If you can find out the shape of the diamond they like, the 4Cs of diamond they want, type of jewelry setting (white gold/platinum) and style of setting (halo, pave, solitaire) preferred, that can quickly help you establish how much the ring would roughly cost.

But, What If She Wants a Ring I Can’t Afford?

If this is the case, you should really sit down and have a candid conversation with the recipient about her expectations and what you can afford. Keeping the relationship in mind, it is important that you and your partner manage financial issues together in an open manner.

You could also start off the conversation by being honest that you cannot afford the ring of her dreams with your budget at the present time. Obviously, you want to work out something together and find a ring she likes to symbolize the relationship together or ask if a future ring upgrade would be possible when you are in a better financial position.

Here Are Some Financial Rules Worth Following

affordable cheap 6 prong solitaire diamond ring setting

A simple yet beautiful solitaire ring setting like this only cost $350.

Now that you have a better idea to approach your diamond engagement ring purchase, it is easier to determine what works for you and what doesn’t. You may choose to abide by the “rules”, or not. But whatever you decide, here’s a few things we think are important to keep in mind.

#1: Start saving right away.

As soon as you know you want to propose, you need to begin putting away money and maybe even take up some extra work. The best way to start your life together is on a responsible foundation. I recommend at least six months before the actual proposal, or even sooner if you want to build up your savings.

#2: Don’t propose the second you think of it.

Yes, the temptation is strong to go out and buy the first ring you see, and go ask that special someone to spend the rest of their life with you. While this is a romantic and charming notion, taking some time to save some money and doing your research will help reduce the stress of engagement ring shopping.

This will also give your mind more time to settle into the idea of getting engaged and how different life will be going forward.

#3: Don’t be too cheap.

To be clear, I am not suggesting that you go out and spend a fortune or even a certain amount. This is coming from the angle of being thoughtful and thinking for the long term.

I’m sure you want to buy a diamond ring that’s durable and will last for a long time. Good quality jewelry does cost more because of better material and skilled labor involved in the fabrication process.

For people who are shopping on a tight budget, the last thing you want to do is to be blind-sided into buying the cheapest option you can find in the market.

As an insider in the industry, let me reveal that’s where the scumbags and unethical jewelers lie in wait to prey on unsuspecting consumers who only care about getting the lowest prices.

Summary: How Much Should You Spend on an Engagement Ring?

prices for engagement rings in proposal

In conclusion, there are some “rules” or idealistic goals that some people adhere to when engagement ring shopping. However, you should bear in mind that the 3 months salary rule is created by the industry to make you spend more.

While the average amount spent on a diamond engagement ring is roughly $6,000, this doesn’t mean you need to spend $6,000 on your purchase. My advice is to look at these figures and statistics as a reference instead of them being the rules you need to follow.

You should look at your own personal financial situation and your recipient’s style preferences as a guide to help you make a buying decision.

Finally, take all the time you need to make a wise decision. You have already made a commitment in your heart to that one special person, and now it’s time to make it a reality with a proposal!

Online retailers are usually 30-50% cheaper than local jewelers and offer 100% risk-free shopping policies. If you want a high quality diamond engagement ring at competitive prices, check out James Allen, Blue Nile and White Flash.

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6 Comments

  1. Avatar
    Kyle-
    May 9, 2018 at 2:03 am

    Instead of using a 3 month salary price rule to buying an engagement ring, what about using a 1/4 of the yearly salary (inclusive of bonuses) for the ring? My girlfriend isn’t an extravagant person and I do want to save up some money for a buffer for wedding expenses.

  2. Avatar
    Paul Gian-
    May 11, 2018 at 11:34 pm

    If you are bringing home a lot of money each year and don’t see a problem with spending it in this way, then this may work well for you. Perhaps money is not an object and you just want to know what the normal amount is. A quarter or a little less maybe a generalized rule of thumb to get you thinking. But it is certainly not expected by everyone.

    However, if you are an average person with an average amount of money made per year, you likely do not want to do this. This is a particularly troubling concept if you have other things in mind that you want to save money for. And with marriage coming up, you probably do! These things might include a house, money for the wedding or honeymoon, and other living expenses. It’s also not a bad idea to go into this arrangement with a little bit of savings. So, if you really need to put away a little for a down payment and buy a less expensive ring, do so. You are not required to go with this so-called rule. And most people probably do not follow it, anyway.

    You should also consider the views of your significant other. Perhaps they do desire an expensive ring but you can talk through the details. Or you may be happily surprised that she prefers to spend less on the proposal and more on the rest of your life together.

    Here is a better idea: look at what you can reasonably afford. Reasonably means something that you can save for within your time frame, and without going into debt. Otherwise, you will be stressed and may regret the purchase.

  3. Avatar
    Randy-
    September 15, 2019 at 12:55 am

    I don’t make a lot of money but my girlfriend has expressed interest in an engagement ring from Tiffany. I’ve actually set aside and plan to get a one month salary engagement ring but when I browsed Tiffany, I realized that it wasn’t even enough to get anything of a decent size there. I wanted to buy a 1 carat D color internally flawless diamond on a $6,000 budget but with my budget, I can only get a 0.60 H color IF diamond.

  4. Avatar
    Paul Gian-
    September 16, 2019 at 12:34 pm

    Well, that’s because you are being unrealistic with your expectations and your budget.

    Please take the time to research what is most important to you in a diamond ring. They are color, clarity, cut and carat. You will need to decide which ones matter most to you and which ones don’t as they factor into the cost of an engagement ring. For your case, the carat size and internally flawless clarity grade would significantly jack up the cost of your ring. If you can’t be flexible in any of the 4Cs, then you will have to increase your budget.

    For better deals, definitely look online and in stores, and everywhere else you can. Give yourself some time to shop around before making a decision with this. The more you know, the better deal and quality you are likely to find.

  5. Avatar
    Janet-
    February 19, 2020 at 6:23 am

    The salesperson at Zales told me the rule of thumb for engagement ring prices is 3 months and told me that most of her clients actually spend a little more than that for larger carat sizes.

    What do you think of Zales’s diamond rings and is it a good idea to buy a larger diamond while compromising color and clarity?

  6. Avatar
    Paul Gian-
    February 20, 2020 at 9:41 am

    Many think that engagement rings are about having the biggest and the best. And unfortunately, with diamond rings, the biggest nearly always means expensive. There are good reasons for this, including beauty and bragging rights. But maybe that isn’t your scenario, anyway.

    What should really be considered is the effect that this ring will have on your fiancé, not everyone else. The meaning of this gesture is the driving force. So, whether that gem is large or not, simply get something pretty that she will like and that will show that you are engaged. That’s the point, right?

    As for quality, maybe having a sparkly stone is more valuable to you than a large looking carat. This is actually a matter of personal preference. Now, the quality of Zales rings is often mediocre in my experience. They typically use garbage tier clarity and color diamonds that aren’t certified. If you want to shop there, be prepared to overpay and definitely ask for GIA/AGS certified diamonds.

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