How Much Should You Spend on an Engagement Ring?

Here's an interesting question: how much should you spend on an engagement ring?

Before we get to the "answer", let's look at some very interesting quotes from the piece linked above.

Let's begin with this one:

If De Beers put the burden on men to buy the perfect stone, Facebook and Instagram have ratcheted up the symbol of love to new levels. Jewelers report that their male customers indicate with increasing frequency their fear of proposing with an inferior ring not worthy of posting on social media. Some men who are especially reticent resort to purchasing "holding rings," temporary tokens of engagement that the woman can later swap for a handpicked ring.

I'm not sure exactly what they are saying here so maybe someone can enlighten me.

Are they saying the guy picks a ring that's generally "ok" with the shop's knowledge that he'll return it later for a bigger/better ring that his fiance picks out?

That's not a bad idea if it ensures she gets the ring she wants and they both agree on it.

If it's because she's going to demand at least 3 carats and there's no way he can make her happy by picking something, then that's out of control IMO.

They then add some very interesting information:

A 2014 Emory University study revealed that a correlation exists between the amount spent on wedding expenses, including the engagement ring, and the success of the marriage. The correlation is actually quite strong, and categorically inverse. Spending $1,000 or less on wedding expenses was associated with the strongest likelihood of a positive outcome and the lowest divorce hazard. Exceeding $20,000 on wedding expenses was associated with a sharp increase in divorce hazard.

Given that money trouble has been repeatedly indicated in previous studies as a leading cause of divorce, the Emory University researchers posit that stretching budgets or incurring debt to pay for a wedding ceremony or ring potentially sets a new marriage on a trajectory toward the kind of financial strain that can lead to a divorce.

Very interesting...

Especially in light of the fact that so many people spend so much on their wedding. 

We spent somewhere south of $5,000 (probably more like $3k), but that was in the stone ages. We'll be married 25 years this fall so it worked for us.

Finally, Investopedia does not answer their own question, but they do say this:

The answer to how much you should spend on an engagement ring is not three months' salary, the amount suggested by De Beers decades ago, nor is it more than your girlfriend's friend's fiancé spent on the ring that racked up all those Facebook likes. Spending less may not make you a social media superstar, but if the data is correct, it could lead to a happier, longer-lasting marriage.

I can't remember how much I spent on my wife's engagement ring but I do know this:

1. I paid cash.

2. The cost was somewhere around two months' salary, but it could have been less.

3. I got the diamond at a wholesaler for a fraction of the cost I would have paid at a jeweler.

4. The ring was appraised at several times its value once we put the stone together with a setting. Somewhere around $25k. Yikes!

I'm not sure what I'd pay these days but something like $5k would probably be my limit. If the woman was upset by that then I think it would be an indication that we were not matched properly.

How about you? Do you have any guidelines or suggestions on what an engagement ring should cost?

Comments

[DIY$]

We've been married 10 years now and spend about $5,000 on our wedding day festivities.

I searched long and hard for the 'right' ring and got it for around $2,000. I remember that I got a 10% discount for paying cash but don't remember if it was $2,000 before or after the discount. At the time, I was still in school and $2,000 was pretty much all I had, but right after we got married I started a job earning $35k so the ring was less than 1 months gross income.

[Apex]

"Given that money trouble has been repeatedly indicated in previous studies as a leading cause of divorce, the Emory University researchers posit that stretching budgets or incurring debt to pay for a wedding ceremony or ring potentially sets a new marriage on a trajectory toward the kind of financial strain that can lead to a divorce."

While there is likely some truth to this reasoning I would posit that there is an even stronger reason. It isn't so much about the money spent on this event as what it says about the way you spend money in general. The more is spent on a wedding and a ring is probably a pretty good indication that one or both of the people have a tendency to both overspend on things in general and to spend money to meet other people's expectations and keep up with the Joneses. After all, a wedding and ring are the ultimate public display of your money values. You invite everyone who is close to you and put on a show. It is supposed to be about them coming to celebrate your marriage but when this kind of money is being spent it is a show being put on for them designed to impress as well.

If you feel the need to spend large sums of money to impress all these people then you are going to do that repeatedly and the money pressures are going continue. So it isn't just the debt from this event. Notice the article didn't say it was only a problem if you went into debt to do this. It doesn't matter if you went into debt, paid with cash, or if mom and dad paid. If you spend too much money on this event then it is an indication of your money values and expectations, and you are likely to do this repeatedly. It will eventually be a problem for your life, your finances, and your marriage.

[Aaron]

I don't think salary can figure into the guideline. What if your salary is $5,000 a month? $15,000 for a ring is silly... What if your salary in inconsistent? Hopefully the man or woman receiving the ring is more interested in what it represents rather than what it cost.

I don't understand the idea of a "holder ring." Do they mean an engagement ring? I'm pretty sure that's what those are for. After I gave my wife a simple engagement ring she told me about what she liked and I was able to make my own decision about her wedding ring. No complaints here. :)