You don't need to spend three months' salary on an engagement ring—here's what to do instead

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One in five people who plan on getting married feel expected to spend between $5,000 and $10,000 on an engagement ring for their future spouse, according to TD Bank's recent Love and Money survey, which polled 1,753 U.S. adults.

Despite these societal pressures, a majority of respondents (59%) say they still only spent between $500 and $2,500 on their partner's ring — a far cry from the three months' salary conventional wisdom often dictates. In fact, the typical American puts down just two weeks' salary, according to the New York Times.

Following that three-month guideline, a person earning $61,937, the current U.S. median household income, would have to spend around $15,500 before taxes on a ring. That's significantly more than the $2,500 maximum a majority of respondents reported actually spending.

Clearly, the three-month rule is no longer the norm. Here's what experts say about where these societal pressures come from and how you can take a smarter approach to saving up for your significant other's engagement ring.

Where do these societal pressures come from?

The unrealistic, and sometimes stress-inducing, expectations about how much you should spend on an engagement ring have many places of origin.

The three-month rule stems from a marketing campaign the De Beers diamond company ran in the 1930s that sold the idea that true love and commitment could only be shown if a man spent a month's salary on his wife's ring. In the 1980s, that expectation grew to two months' salary, and later, three months' worth, wedding website The Knot reports.

Here's how much Americans think you should spend on an engagement ring

Social media also often causes people to compare rings and proposal stories online.

"It's the Instagram and Facebook society. The first thing that someone does when they get engaged is post a picture of the ring," says Ryan Marshall, a certified financial planner at Ela Financial Group.

Knowing the ring will be shown off to friends and family can cause added stress in the buying process, Marshall says. Will it live up to their standards?

It's the Instagram and Facebook society. The first thing that someone does when they get engaged is post a picture of the ring.
Ryan Marshall
certified financial planner at Ela Financial Group

Pop culture and media also play into how society views marriage and engagements. It's common for celebrities and other well-known public figures to drop millions on massive diamond rings as a way of displaying their wealth or financial status. Take Jennifer Lopez, for example. Her ring cost her husband, Alex Rodriguez, an estimated $1.8 million, at least — a fact that was heavily publicized.

That's all in addition to the pressure of choosing a ring that's worthy of your significant other. "For many people, they may start to feel like spending more money is a sign of more love or more affection than if they spent less," says Kaleb Paddock, a certified financial planner at Ten Talents Financial Planning.

Despite these pressures, there is some good news for young people: If you aren't interested in spending thousands in order to propose, you're right on trend. More and more young people aren't buying high-cost engagement rings and a majority think one should cost less than $2,500, according to a 2019 survey from TD Ameritrade.

How to decide how much to spend on a ring

When determining how much to put toward your partner's ring, it's best to "simply ignore any salary metrics" and focus on what you can realistically spend, explains Malik S. Lee, an Atlanta-based certified financial planner at Felton and Peel.

Marshall agrees. He sees "far too many people spending too much on an engagement ring, and then, they have very little money left for their other financial goals, such as home buying."

For a more manageable salary metric, Paddock advises his clients "to spend no more than 5% of your salary on an engagement ring." For those earning $61,937, the U.S. median household income, that's about $3,000.

It might behoove you to keep the price reasonable if you are not looking to cut back on the wedding itself. Far too often people will come out of weddings in debt, but if you plan ahead properly, you may minimize that.
Malik S. Lee
certified financial planner at Felton and Peel

It's can also be smart to figure the cost of an engagement ring into your total wedding costs, Lee says. In 2019, the average U.S. wedding, including the engagement ring, cost $33,900, according to the latest Real Weddings study from The Knot.

"It might behoove you to keep the price reasonable if you are not looking to cut back on the wedding itself," Lee says. "Far too often people will come out of weddings in debt, but if you plan ahead properly, you may minimize that."

How to save smarter for your partner's engagement ring

No matter how much you decide to spend on a ring, it can still be a big purchase. But there are several savings strategies that can make the process easier.

Start by "setting up a separate account that is earmarked for the ring," Marshall says. "Within this account, put any extra money saved or earned."

Saving small amounts consistently over time can go a long way. Say you're paid bi-weekly and decide to deposit $40 per paycheck into your ring fund. That's $80 a month, and after one year, you'll have $960 put away.

If you don't want to manage bi-weekly deposits, you can also "create an automatic direct deposit through your employer," says Lee. "Using this strategy can help safeguard any savings goals from things like impulse buying, procrastination and inconsistency," he adds.

Millennials don't want diamonds

Additionally, look for ways to tighten your budget and limit unnecessary spending. Packing your lunch, cooking dinner at home and taking public transportation (rather than car services), can help you spend less and put more toward your ring fund.

But, remember, if you can't reasonably afford the ring you want, you shouldn't push the price you're willing to pay too far.

Avoid turning to short-term solutions, such as using a credit card or digging into your retirement savings, to cover ring costs. You should always think about what will be best for both you and your partner financially before taking on any high-interest debt.

And if you can't afford your partner's "dream ring" right now, Lee says you shouldn't be discouraged. "As a married man myself, someone wise once told me not to go too big because if you are married long enough, there is a great chance that you will be upgrading their ring or buying a new one anyway at some point," Lee says. "After 13 years of marriage, needless to say, they were right."

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