Whether your newly-engaged friends have been showing off their rocks or you’re the one with the flashy ice on your finger, engagements always drag an elephant into the room: How much did that ring cost?
The Average Person Is NOT Spending Two Months’ Salary On The Ring
Traditional grandmother wisdom says that the ring-buyer should spend two months’ salary. But, according to industry analyst Ken Gassman, the average diamond engagement ring cost $3,150 in 2009. Interestingly, that amount is down about $300 from the previous year. Since the average person isn’t making less than $20,000 per year (which they would be if $3,150 were two months’ salary), it’s clear that grandma’s rule no longer holds.
What Else Could That Money Get You?
We’re not saying that you shouldn’t buy an engagement ring, but we also don’t think it’s wrong to play with conventions every once in a while. For example, one of our friends asked her boyfriend for a vacation fund rather than an engagement ring. More and more couples are putting the extra money from the engagement ring toward goals that they can save for together, such as the down payment on a home or the wedding itself. Of course, if you invested that money in an IRA instead, you’d wind up with over $22,000 in the end.*
We’re not saying you should skip buying a wedding ring, though you should consider all your options.
Diamond Alternatives: Less Or More?
We’re not saying you should skip buying a wedding ring, though you should consider all your options: The Jewelry Information Center has reported a trend toward brilliantly color stones, which includes both colored diamonds and other types of stones. These rings, made with stones like sapphires and rubies, are often less expensive than standard diamonds, but they vary widely by cut and design. “The price, like that of a diamond, is completely dependent on quality and rarity,” said jeweler Michael C. Fina’s Teegan Conti.
To give you a sense of which stones cost more, we compared rings with the same style but different stones from Tiffany & Co. We know that these are very expensive rings, but we wanted to demonstrate relative value:
The Most Important Thing Is To Talk Openly
This rule doesn’t just apply to engagement rings. Money is the number one thing that couples fight about, so it’s crucial to be open about your expectations. If you view the engagement ring as an important tradition, it’s important that your partner knows that. Make sure to openly discuss how you plan to save for these big purchases as a couple, to prevent misunderstandings later on.
Of course, if you’d just as soon go on a vacation instead, make sure to express that, too.
*If you are 25 now and retire at 65, calculated at an inflation-adjusted 8%.