How Much Should You Really Be Spending on a Diamond Ring?
Anyone who thinks proposing is straightforward clearly hasn’t popped the question. Choosing the right setting and the right timing can put enough pressure on you—long before you even start considering the ring itself. Speaking of which, do you know what style of ring your partner prefers? Their ring size? Their thoughts on gold versus rose gold versus platinum?
Then there’s the cost. Determining how much you spend on the ring is not an easy feat, but it ultimately comes down to finding out what you can afford without compromising your long-term savings.
What Are the “Rules”—and Where Did They Come From?
As you start researching, you’ll likely stumble upon a number of spending parameters dictating how much should be spent on an engagement ring. Some will say it’s one month’s salary, others say two, or even three. But where did these rules come from?
Believe it or not, diamonds weren’t used on engagement rings until after the Great Depression. Having suffered significantly during the worst economic downturn in history, diamond company DeBeers ran an international campaign promoting diamond engagement rings that should be worth a specific portion of a person’s salary—and this varied in each country. In Japan, they recommended spending three months’ salary, versus one month’s salary in places like the U.K. The campaign’s arbitrary rules—and the underlying status symbol they reflected—seemed to help the diamond ring trend stick. While only 10% of engagement rings had diamonds at the start of this campaign, 80% did by the end of the 20th century.
Over the years since the campaign, a three months’ salary rule was introduced to the diamond ring market in the U.S. In Philadelphia, for instance, where the average monthly salary is just under $5,000, that could currently mean spending an average of $15,000 on the ring. But in February of this year, the New York Times estimated that most people ignore the rule and actually spend only two weeks’ salary on their rings. For the average Pennsylvanian, that would mean spending $2,500. That’s still a lot of money—and before you pay that much, it’s important to consider the financial goals you and your partner have set for yourselves and make sure you’re not impacting those in any way.
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How to Prepare
As you get ready to start shopping, there are a few things you can do to better prepare and make sure that you choose the best option for both you and your partner.
1. Check in with Your Partner’s Priorities
Planning out a proposal often relies on the element of surprise, but that doesn’t mean you can’t talk about it with your partner beforehand. Try and figure out what their expectations or preferences are for an engagement ring by asking what they think about a friend’s engagement ring, for instance. And make sure you know how much they think you should realistically put towards it. When updating your budget as a couple, have a conversation about how much money should go towards personal purchase decisions or gifts.
2. Visit a Jewelry Store
Visiting a jewelry store might feel like an intimidating prospect—especially if you’ve never spent so much money on one small item before—but it can help you identify what it is you’re looking for and where that sits from a cost perspective. This is an important step to help you set realistic expectations about what you can afford—whether you’re willing to put three months or two weeks of your salary towards a ring—and how you can make that happen.
3. Make a Monthly Budget
Once you’ve landed on the type of ring and how much you’re willing to spend, set up a budget and put a specific amount aside each time you receive a paycheck. If you have a Star Savings account with Citadel, you can open up a free sub-account dedicated to this matter. This will help fit this large expense into your existing long-term financial plans and help you build a timeline for the big day.
Citadel knows how difficult it is to find the balance between being excited for your upcoming proposal and having to plan the logistics and finances of it all. We’re here to help. Contact us to learn more about how we can support you in saving for your engagement ring.