You’ve found the love of your life and you'd like to take your relationship to the next level. That means one thing: it's time to buy an engagement ring for your forever partner.
At this point, there’s a lot of questions to answer, including diamond size, whether to opt for natural, earth-mined diamonds or lab grown diamonds, can you negotiate the price of an engagement ring, etc. These all boil down to the big question of - how much money should you spend on an engagement ring?
There is a widely cited “rule” that you should spend three months’ salary on an engagement ring. This stems from a 1930s De Beers advertising campaign that convinced men to spend roughly one month’s salary on this purchase.
By the 1980s, one month’s salary was no longer the rule. It turned into two months. And today, many believe that a minimum of three months’ salary is a good starting point.
But Is It True?
Before we go any further, remember this: an engagement ring is all about love and commitment. While money always comes into play, it’s the thought that matters.
Let’s start with a few examples based on the three months’ salary rule:
- Annual income: $30,000 – Cost of ring: $7,500
- Annual income: $60,000 – Cost of ring: $15,000
- Annual income: $120,000 – Cost of ring: $30,000
In Canada, theaverage cost of an engagement ringis $3,500.
For most people, that’s a far cry from three months’ salary. Think about it this way: $3,500 breaks down to a monthly salary of $1,166 or an annual income of roughly $14,000.
In other words, most people aren’t spending three months’ worth of salary on an engagement ring. In fact, with anaverage Canadian earning$54,630/year or $4,553/month, they aren’t even spending what they earn in one month.
Societal Pressure Can Weigh Heavy On Your Mind
Societal pressure is unrelenting. You see what your friends are paying for engagement rings. You see celebrities sporting rocks the size of a baseball, so much larger than the average carat size for an engagement ring. And of course, your online search turns up one “rule” after the next.
Additionally, internal pressure and stress have the ability to wear you out, cloud your judgment, and lead you down a dangerous financial path.
These tips can save you from caving to societal pressure:
- Don’t associate the cost of an engagement ring with love or affection: It’s easy to believe that spending more shows the other person how much you care. This isn’t true. It’s all about your love for each other.
- Don’t try to keep up with the Joneses: You don’t have to match the engagement ring that your best friend purchased for their partner. You don’t have to keep up with all those Instagram influencers who are showing off their sparkling diamonds. Do your thing and let them do theirs.
- Do your research: It’s a common misconception that you have to spend tens of thousands of dollars (or more) to purchase a high-quality engagement ring. Do your research to learn more about your options. For example, if you’re buying a diamond engagement ring, cut, colour, and clarity always come into play.
So, What’s the Answer?
Even with all this information, you may still be wondering if you should spend three months’ salary on an engagement ring.
Here’s the best answer we can provide: it depends!
If you’re on a tight budget and three months’ salary is out of the question, don’t push your financial limits.
Conversely, if you’re comfortable spending three months’ salary or more, it’s perfectly acceptable to do so.
You don’t have to adhere to any rule when buying an engagement ring. Do what’s best for you, your financial circ*mstances, and of course, that special someone in your life. Also, don't forget that there are other expenses that will follow a proposal, most notably your wedding bands and the cost of the big day.
Whatever your budget may be, we’d love to help! Browse our engagement rings in Toronto, or view ourlatest creations on Instagram. Please contact us toschedule a virtual or in-office consultation.
We look forward to meeting you!
FAQs
If you're on a tight budget and three months' salary is out of the question, don't push your financial limits. Conversely, if you're comfortable spending three months' salary or more, it's perfectly acceptable to do so. You don't have to adhere to any rule when buying an engagement ring.
Do people really spend 3 months salary on engagement rings? ›
Earlier, people spent their three-month salary on engagement rings as it was a popular notion. The cost of living back in the day was indeed much lower, and people could afford to spend 3 months' salary on a ring. However, times have changed and millennial couples don't generally follow this rule.
How many months of income should you spend on an engagement ring? ›
You Should Spend Three Month's Worth of Your Salary on a Ring. "There is a long-standing cultural tradition of spending two to three months' salary on an engagement ring.
How much is 3 months salary pre post tax engagement ring? ›
1) The Three Months Gross Salary Rule
There's really no rhyme or reason why a man should spend three months of his gross salary on an engagement ring, let alone two months. After taxes, three months gross is equivalent to about 1/3rd his take home pay. Imagine if the man makes $650,000 a year, a top 1% income.
Who came up with 3 months salary for engagement ring? ›
According to The Knot the true origins of this theory comes from a De Beers marketing campaign back in the 1930s. Not only did they convince the world that diamonds are the ultimate symbol of love, but they also informed the public opinion that a diamond's cost is directly proportional to salary.
Is $2000 too little for an engagement ring? ›
The study found that nearly half of all respondents are spending between $1,000 to $4,000 on their engagement ring, so the average cost truly varies. This data highlights that while some may opt for more expensive rings, many people find more affordable options that suit their budget and preferences.
What is a realistic engagement ring budget? ›
While engagement rings are a pricy investment, the usual cost tends to be below $10,000, with a national average of $6,000, according to The Knot's 2022 Jewelry and Engagement Study.
How much should I spend on an engagement ring if I make 50000 a year? ›
To put that number into perspective, the three-month rule means that someone making $50,000 per year ought to spend $12,500 on the engagement ring. If a budget of three months' income seems like too big of a stretch for your lifestyle, you've got plenty of company.
Is $20000 a lot for an engagement ring? ›
The answer to whether $20,000 is a lot for an engagement ring depends on your personal financial situation, preferences, and what you believe the ring represents. It's a significant amount of money for many people, but it's essential to find a balance that aligns with your values and budget.
Is $3000 a lot for an engagement ring? ›
Is $3,000 Enough for An Engagement Ring? Yes, $3,000 is definitely enough for an engagement ring. You can get a beautiful, high-quality diamond and a setting with this budget.
In fact, 9% of ring shoppers are spending under $1,000. It's important to note that $6,000 is a national average taken from respondents all over the country and is influenced by a multitude of factors, one being region.
What is the 2 month rule for engagement rings? ›
You may have heard of the "two-month rule," which suggests you should spend two months' worth of your income on an engagement ring. While this may be what you have heard, the reality is that there is no set rule on how much money you should spend on an engagement ring!
Should a man spend 3 months salary on an engagement ring? ›
It's known as the "three months' salary" rule, and it implies that a buyer should put three months of their salary toward a sparkler for their future spouse. For context, The Knot's 2023 Jewelry and Engagement study found that the average cost of an engagement ring in the US is $5,500.
Is $5000 enough to spend on an engagement ring? ›
The national average cost of an engagement ring hovers around $5,000, but prices can vary significantly based on factors like the cut, carat, clarity, and setting of the diamond. Being informed about the average costs at a jewelry store will help you determine the baseline for what you might expect to spend.
What is the rule of thumb for engagement rings? ›
Two Months Salary
The two-month salary payment system means spending two months of your salary on a ring. So, if your yearly salary is $45,000, you'll spend $7,500 on your engagement ring. This is the most popular system for calculating how much to spend on an engagement ring.
What is the average amount spent on an engagement ring? ›
According to a 2022 study from Credit Donkey, most couples reported wanting to spend between $1,000 and $5,000, though the average cost of an engagement ring was around $5,225.
Is $20 000 too much for an engagement ring? ›
An engagement ring budget of $20,000 is much higher than the median amount spent on diamond rings. While $6,000 is the national average cost of a ring, everybody's financial situation is different.
