How much to spend on engagement ring?

When I first considered the process of proposing to my girlfriend I had to strike the right balance between buying her a ring she could be proud to wear and not spending too much money that I would not be able to help pay for the wedding or our first home.

Buying an engagement can be expensive. Rings and diamonds are pricey. But you don’t need to break the bank to afford a great ring.

If you are like me you thought on a continuum:

  1. The cheaper the ring, the more money I save buying it.
  2. The more expensive the right, the happier my fiance will be.
  3. How do I strike the right balance and find a happy medium?

There used to be a belief that you should spend roughly 3 months wages on your engagement ring. That belief is a very general rule of thumb, and frankly is outdated. That rule also didn’t stipulate if that was 3 months of gross or net incomes.

Here is a breakdown of how to think about your income, hours worked per month, gross income, savings rate, and how much 3 months of net income would equate to. 

This charge only covers money you make by working and overlooks additional capital you might generate through investments or previous savings.

Look your hourly rate up on this graph and see how much 3 months of net income equates to. If you are making $30/hour, for example, 3 months of net income is equal to $2,880. 

The average engagement ring in the United States is around $5,500.

Hourly RateHours Worked Per MonthGross IncomeSavings RateNet Income (after taxes and other savings)3 Month Net Income
$20160$3,200.0020%$640.00$1,920.00
$25160$4,000.0020%$800.00$2,400.00
$30160$4,800.0020%$960.00$2,880.00
$35160$5,600.0020%$1,120.00$3,360.00
$40160$6,400.0020%$1,280.00$3,840.00
$45160$7,200.0020%$1,440.00$4,320.00
$50160$8,000.0020%$1,600.00$4,800.00
$55160$8,800.0020%$1,760.00$5,280.00
$60160$9,600.0020%$1,920.00$5,760.00
$65160$10,400.0020%$2,080.00$6,240.00
$70160$11,200.0020%$2,240.00$6,720.00
$75160$12,000.0020%$2,400.00$7,200.00
$80160$12,800.0020%$2,560.00$7,680.00
$85160$13,600.0020%$2,720.00$8,160.00
$90160$14,400.0020%$2,880.00$8,640.00
$95160$15,200.0020%$3,040.00$9,120.00
$100160$16,000.0020%$3,200.00$9,600.00
$105160$16,800.0020%$3,360.00$10,080.00
$110160$17,600.0020%$3,520.00$10,560.00
$115160$18,400.0020%$3,680.00$11,040.00
$120160$19,200.0020%$3,840.00$11,520.00
$125160$20,000.0020%$4,000.00$12,000.00
$130160$20,800.0020%$4,160.00$12,480.00
$135160$21,600.0020%$4,320.00$12,960.00
$140160$22,400.0020%$4,480.00$13,440.00
$145160$23,200.0020%$4,640.00$13,920.00
$150160$24,000.0020%$4,800.00$14,400.00
$155160$24,800.0020%$4,960.00$14,880.00
$160160$25,600.0020%$5,120.00$15,360.00
$165160$26,400.0020%$5,280.00$15,840.00
$170160$27,200.0020%$5,440.00$16,320.00
$175160$28,000.0020%$5,600.00$16,800.00
$180160$28,800.0020%$5,760.00$17,280.00
$185160$29,600.0020%$5,920.00$17,760.00
$190160$30,400.0020%$6,080.00$18,240.00
$195160$31,200.0020%$6,240.00$18,720.00
$200160$32,000.0020%$6,400.00$19,200.00
$205160$32,800.0020%$6,560.00$19,680.00
$210160$33,600.0020%$6,720.00$20,160.00
$215160$34,400.0020%$6,880.00$20,640.00
$220160$35,200.0020%$7,040.00$21,120.00
$225160$36,000.0020%$7,200.00$21,600.00
$230160$36,800.0020%$7,360.00$22,080.00
$235160$37,600.0020%$7,520.00$22,560.00
$240160$38,400.0020%$7,680.00$23,040.00
$245160$39,200.0020%$7,840.00$23,520.00
$250160$40,000.0020%$8,000.00$24,000.00

Personally I earn a bit more than average but wanted to spend my money on Bitcoin and a house. I also prefer to save more than 20% of my paychecks for future rainy days. You have to make a decision that aligns with your financial needs and the desires and values of your future partner.

Engagement rings are an investment in love, not an investment in an appreciable asset. This is because rings, like cars, suffer from wear and tear and looks and styles change.

While it might be helpful to tell yourself that buying a ring is an investment, you might be better off telling yourself that you are investing in the values of your loved one.

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