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Should You Spend 3 Months’ Salary on an Engagement Ring?
While it once served as a popular guideline, the 3 months’ salary rule no longer reflects modern financial priorities or relationship dynamics. Today’s couples are more likely to approach an engagement ring purchase with practicality, transparency, and personal values in mind.
While the salary rule for engagement rings may feel outdated, some people still find it helpful:
- It provides a starting point: For those unsure where to begin, the rule offers a benchmark to initiate budget planning.
- It emphasizes the significance of the purchase: Following the rule may reflect a desire to express commitment through a substantial investment.
- It simplifies the budgeting process: If you’re looking for a clear-cut number, the rule eliminates guesswork.
Despite its familiarity, the 3 months’ salary rule has several limitations:
- It ignores individual financial circumstances: Debt, living expenses, savings goals, and job stability all affect how much someone can reasonably spend.
- It may encourage overspending: Blindly following the rule can lead buyers to purchase rings beyond their means, potentially creating financial stress.
How Much Should an Engagement Ring Cost You?
There is no one-size-fits-all answer to how much an engagement ring should cost. Instead of following a fixed formula like the 3 months' salary rule, try this more practical approach:
- Assess your net monthly income: Focus on your take-home pay after taxes to get a clearer picture of what you can realistically afford.
- Set a range based on your discretionary income: Determine how much of your income is available after covering essentials like rent, bills, loan payments, and savings toward larger goals (such as a home, emergency fund, or wedding). Your engagement ring budget should come from what’s left over — not from funds allocated to long-term financial security.
- Prioritize what matters most: Whether it’s diamond size, overall quality, a custom setting, or ethical sourcing, decide where to allocate your budget based on what’s most meaningful to you and your partner.
A few additional factors to consider while calculating your budget are:
- Compare styles and settings: Some styles (like halo or three stone settings) make stones look larger without increasing cost.
- Explore lab-grown diamonds: Lab diamonds offer significant savings and identical optical and chemical properties to natural diamonds.
- Factor in extra costs: Consider resizing, insurance, and taxes in your final budget.
Bottom Line
Spend what feels financially responsible and meaningful for your situation. While the 3 months’ salary engagement ring rule can still be helpful, most couples now treat it as a reference point — not a requirement.
This modern approach encourages flexibility. It acknowledges that many couples now value personal financial health, shared goals (like saving for a home or wedding), and individual preferences over a fixed spending formula.
FAQ
Is the engagement ring salary rule before or after taxes?
The original engagement ring 3 months' salary before or after taxes question has no definitive answer because the rule is not grounded in financial planning. However, most people interpret the rule using pre-tax income, which can lead to budgeting more than they can afford. It's more realistic to calculate your budget based on after-tax (net) income.
What is the origin of the 3 months’ salary rule?
The 3 months’ salary engagement ring origin dates back to a 1930s advertising campaign by De Beers. At the time, the campaign suggested spending one month's salary. By the 1980s, this evolved into the 2-to-3-months' salary rule. It was designed to boost diamond sales, not to reflect sound financial advice.
How many months’ salary should you spend on an engagement ring?
There is no universal rule for how many months of salary to spend. Your engagement ring budget should be determined by your financial situation, partner’s preferences, and long-term goals. Most buyers today spend a specific dollar amount that fits within a larger financial plan.
What considerations are important when budgeting for an engagement ring based on salary?
When using your salary to guide your engagement ring budget, consider:
- Your total debt-to-income ratio
- Monthly expenses and savings rate
- Emergency fund health
- Your partner’s expectations and lifestyle
- Alternative options (vintage, lab-grown, colored stones)
These factors provide a more accurate and personalized approach than any fixed salary rule.
