How much should you spend on an engagement ring?

Written by
Peter Dunn

I'm actually angry at myself for addressing this question. Sounds odd, but I try not to weigh in on "wedding stuff." No offense, but people lose their minds over weddings. I feel fortunate that Mrs. Planner made our wedding about the marriage, and not the wedding itself. The engagement ring is the beginning of the madness. Oh, and it generally is quite mad.

Let's start this discussion with a simple question: how much money should you spend on dinner tonight? Weird question, isn't? Let's say you make $86,000 per year, how much should you spend on dinner tonight? Hmm, still weird. Let's say that you also have $45,000 in student loans, what's the best amount to spend on dinner? Eh. Okay, let's say that you have $8,000 in your savings account, what do you think now? Yep, this is stupid. It's impossible to answer the orignal question, even with all of the additional information.

Let's try a different angle. How much do you love the woman you are trying to marry? Do you love her $500? Do you love her $5,000? Do you love her $50,000? What?!?!? You don't love her $50,000? Jerk. Okay, so that didn't work either.

Let's go the "traditional" method? How much money do you make over a two month period? $6,000? Perfect. That's exactly how much money you should spend on your girlfriend's engagement ring. Knock knock. (Say: Who's there?) Someone is dumb, do you know. (Say: Someone is dumb, do you know who?) Anyone that has ever measured the size of your jewelry purchased with the size of your income. In other words, the "two months salary" method is the stupidest thing I have ever heard. In what world does it make sense to gauge the affordability of a "sign of affection and commitment", based on your income? America. That's the world. Yet, it still doesn't make sense.

I can't even begin to tell you the number of times that I've been helping a family with their finances and this topic comes up. Yet, it comes up three to ten years after the ring was purchased. Why? Because in many cases, that's how poor the decision was. It has long-ranging effects some ten years later. Seriously.

We must take a different approach. Would you like to spend $10,000 on a ring for your lady-friend's finger? Or would you rather use that $10,000 as a part of a downpayment on a home that you, your lady-friend's finger, and the rest of your lady-friend can live in?

Unfortunately, at the moment you decide you want to look for a ring for that special lady, time freezes. You are at the mercy of your current financial snapshot. Are you broke? Then you can't afford a ring, yet you will most likely use credit to buy one. This debt will most likely be paid off over a several year period. This debt will prevent you from doing more important things. If you have a few thousand dollars saved, then you can use some of that money for a ring. If you use too much of it, then you won't have an emergency fund. And what about paying for the wedding as a couple? Well, that's a whole other blog post. But if you are going to pay for the wedding, then in my opinion, you should spend even less on the ring.

The reality is this whole conversation sucks. Whether we like it or not, there are "expectations" revolving around how much money you should spend on a ring. And if the thought of this discussion has you not wanting to get married, you wouldn't be the first dude to feel that way. When your girlfriend tells one of her friends that she is engaged, they will immediately ask to see the ring (right after the optional dolphins sounds). Why would anyone want a man to put the financial future of his marriage at risk over something silly like a ring?

And for those people that say an engagement ring is an investment, then sell it. Sell your ring. What's it an investment in? Your relationship? Precious metals? Diamonds? It's not an investment.

Money isn't for hoarding. Money is for spending, whether you spend it now, or save it for spending in the future. However, that doesn't mean that you should spend money on things that don't make any earthly sense. By the way, I have the answer to the question on how much you should spend on tonight's dinner: two months income. Bon appetit.

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