You may have heard that you should spend three months’ salary on an engagement ring. But that rule of thumb is now considered pretty outdated.
Instead, it can be a good idea to consider your particular financial and personal situation when calculating how much to spend. As a point of comparison, the average cost of an engagement ring is currently $5,200, according to the wedding website The Knot.
What follows are some guidelines that can help you figure out how much you should spend on an engagement ring, along with options for covering the cost.
Key Points
• The traditional “three months’ salary” rule is outdated — spend based on your financial situation, comfort level, and partner’s preferences.
• The average cost of an engagement ring is around $5,200, though many spend significantly less.
• Payment options include cash, credit cards, jeweler financing, or personal loans — each with pros and cons.
• Personal loans often offer lower interest rates than credit cards and give you predictable monthly payments.
The Average Cost of an Engagement Ring
According to The Knot’s 2024 data, the average cost of an engagement ring is around $5,200.
While that number may represent the average, the amount couples actually spend on a ring varies widely. In The Knot’s study, roughly one-third of respondents spent less than $3,000.
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 markups that come along with a luxury 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.
Recommended: How to Plan a Wedding
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 very 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 it may become a financial headache in the future. Here are some things you may want to consider before getting out the plastic.
• Interest rate If you put the engagement ring on a card with a relatively high interest rate and don’t pay it off right away, the ring will end up becoming significantly more expensive over time. Also, keep in mind that many credit cards have a variable interest rate, which means the interest rate at the time of purchase could go up.
• Credit-utilization ratio A large purchase like an engagement ring can 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 engagement ring funding. A personal loan from a bank, credit union, or online lender may have a lower interest rate than a jeweler financing program. Personal loans also typically have significantly lower interest rates than credit cards.
A personal loan also works differently than jeweler financing and credit cards. With a personal loan, you’ll get the money in your bank account and can then pay the jeweler as though you were paying in cash. You then pay back the loan (plus interest) in monthly amounts set out in the loan agreement. One option to consider: You might fold the ring’s cost in other upcoming expenses as part of a wedding loan.
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 have larger monthly payments. Conversely, a longer term loan may lower your monthly payment but have you paying more interest over the life of the loan.
• Loan costs There may be fees associated with the loan, including an origination fee when the loan begins and a prepayment penalty if you pay off the loan 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.
Recommended: Typical Personal Loan Requirements
The Takeaway
Spending three months’ salary for an engagement ring is a long-standing tradition, but these days there is no one-size-fits-all formula. While couples currently spend an average of $5,200 for a ring, ultimately, the amount paid is a personal decision and will depend on your income, 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 such as financing by your jeweler or a personal loan.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
FAQ
How much should you spend on an engagement ring?
There’s no rule about how much to spend on an engagement ring. The old “three months’ worth of salary” guideline is outdated. How much to spend is a personal decision, though it’s worth noting that the average amount is currently $5,200.
How much should I spend on an engagement ring if I earn $100,000?
If you follow the old rule of spending three months’ worth of income, that would mean a $25,000 budget for a ring. But this has largely fallen by the wayside, with couples deciding the amount that best serves their big-picture financial needs and their budget. Currently, the average paid for an engagement ring is $5,200.
Is $5,000 enough to spend on an engagement ring?
There’s really no specific amount that’s enough or not enough to spend on an engagement ring. While the average spent on a ring is currently $5,2000, one survey found that most respondents spent between $2,500 to $5,000. Some couples will spend still less, while others might decide to go much higher. Take time to figure out your budget.
Photo credit: iStock/ljubaphoto
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