2-Minute Money Manager: How Much Should I Spend on an Engagement Ring?

Couple Engagement
Photo by YAKOBCHUK VIACHESLAV / Shutterstock.com

Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about engagement rings; specifically, how much you should spend to buy one.

This is a question I should know the answer to by now: I’ve bought three over the years.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “Why Your Next Diamond Should Be From a Lab” and “5 Sneaky Jeweler Tricks of the Trade.” You can also go to the search at the top of this page, put in the word “jewelry” and find plenty of information on just about everything relating to this topic.

And if you need anything from a better credit card to a mortgage, be sure and visit our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Today’s question comes to us from Jonathan:

“I’m getting engaged soon, and my dad told me the rule of thumb is to spend three months’ salary on an engagement ring. My friends are telling me this is dumb. Who’s right?”

I’ve got three things for you, Jonathan:

Thing No. 1: Your friends are right

Your dad’s wrong. The myth suggesting we spend three months’ salary on an engagement ring came from the company controlling diamond pricing, De Beers.

This company is a cartel, meaning it controls so much of the worldwide diamond supply that it can virtually dictate the price of diamonds. De Beers came up with this “three months’ salary” concept years ago. And it’s just stupid.

In my opinion, any company that tries to emotionally shame you into spending three months’ salary on an overpriced product deserves a special place in hell. If you ever hear anyone repeat this ridiculous “rule of thumb,” I want you to tell them what I just told you. In a loud voice.

Thing No. 2: How much should you spend on a ring?

The answer to this question is simple: Spend what you can afford.

Hopefully, you’re going to start reading about diamonds before you start shopping for them. When you do, you’ll learn about “four C’s” of diamond buying:

  • Cut
  • Color
  • Clarity
  • Carat

But let me give you some advice from someone who’s been down this road a few times: Get a flawed stone. Obviously, not one with big, visible flaws. But it’s better to have a bigger stone with minor flaws than a smaller, more perfect stone.

Why do I say that? Because when your bride-to-be flashes that rock — something she’ll begin doing within 30 seconds of receiving it, and will continue doing for months thereafter — every person she shows it to will ask the same thing: “How big is it?” Nobody, on the other hand, will ask, “Is it flawless?”

Thus, bigger is probably better. But never, ever buy anything more than you can afford. Set a budget and stick to it. If she loves you, she’ll love whatever ring you give her.

I’ve done stories with a lot of jewelers over the years. One gave me some great advice I’ll pass along to you. He said, “Don’t get too wrapped up in the four C’s. Look at the diamond. Just look at it. Look at multiple diamonds next to each other. Then, pick the one that looks the best.”

Thing No. 3: Forget mined diamonds

While I still like buying my wife the occasional diamond, I stopped buying traditional, mined diamonds years ago. Now all I buy is lab-grown diamonds. Diamonds grown in a lab will save you at least 30 percent over the cost of a diamond from the earth.

They’re both real diamonds. Lab-grown aren’t cubic zirconium or anything like that; they’re totally real. And other than price, they have other advantages.

You’ve heard of blood diamonds, right? They’re diamonds that are mined with what’s essentially slave labor. While blood diamonds aren’t supposed to be on the market, some still are. And a lot of people are suffering as a result of diamonds being mined this way. When you buy lab-grown, you don’t have to worry about that. Finally, it’s easier to get colored diamonds when they’re lab-grown.

My wife loves purple. A couple of years ago, I bought her a lab-grown purple diamond. My jeweler told me a mined diamond of the same color would have cost at least 10 times the price.

So do yourself a favor and check into lab-grown diamonds.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
5 Ways Your Phone Can Slash Grocery Costs
5 Ways Your Phone Can Slash Grocery Costs

These free apps and websites can help you get cash back on groceries, shop more efficiently or squeeze the most from the ingredients you have on hand.

10 Tools You Need for Financial Stability
10 Tools You Need for Financial Stability

Have these tools and accounts in place so you can weather whatever comes your way.

It’s Worth Paying More for These 7 Things
It’s Worth Paying More for These 7 Things

Sometimes, the difference in quality makes it worthwhile to open your wallet a little wider.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started


Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.