A long-standing “rule” has been that an engagement ring should cost someone three months’ salary. But, the truth is there is no one-size-fits-all rule to choosing how much money to spend on a ring—or how to spend it. It all depends on a person or couple’s individual situation.
With a reasonable budget and pay-off plan, though, financing an engagement ring can be a great option for those who don’t have the full cost of an engagement ring upfront, or don’t want to make a large one-time payment. And to learn about engagement ring financing, we consulted financial therapist Amanda Clayman, Valerie Madison store manager Liz Ferris, and diamond expert Dan Moran.
Meet the Expert
- Amanda Clayman is a financial therapist. She is certified in financial social work and received a master’s degree in social work from Hunter College.
- Liz Ferris is the head of sales and store manager at fine jeweler Valerie Madison in Seattle.
- Dan Moran is a diamond expert and the founder of Concierge Diamonds in Los Angeles.
Here’s what you need to know about paying your ring off over time and how to budget for the splurge.
What to Know Before Financing an Engagement Ring
“If [you are] purchasing a ring and have no idea how [you are] going to pay for it, it’s unaffordable,” says Clayman. “If making payments is going to cut into other things that are really important, [it’s unaffordable] … This could be the straw that breaks the camel’s back.”
She continues, “There’s so much social meaning attached to [engagement rings]. We feel like we can communicate our net worth with them.” But, it’s important to remember that an engagement ring symbolizes the intent to enter a marriage, and in a marriage financial transparency and responsible joint decision-making matter. So, spending all your savings on a ring may seem romantic, but you can risk setting yourself and your fiancé up for a tough financial start. It might be more of a gesture to buy a ring you can really afford so that the two of you can plan for future purchases. “Balance romance with practicality and think about having a convo about affordability.”
On that note, Ferris recommends taking your life stage into account before purchasing a more expensive ring. “Finishing grad school or closing on a house may mean there’s a smaller budget for a ring right now but that doesn’t mean you can’t choose something meaningful and plan to upgrade it in the future,” she says.
Engagement Ring Financing Options
There are a number of ways to finance a purchase like an engagement ring. The most common one is to put it on a personal credit card. Retailers may also offer in-house financing options or through third-party sites like Klarna. Valerie Madison, for example, partners with Affirm to offer financing for online purchases.
“Customers also have the option to use Shop Pay at checkout to break their purchase into four installments. Financing is a great option for couples who have a lot of expenses around a wedding or those with a limited budget. The flexibility of owning a piece now and paying for it over small installments—i.e. the ‘buy now, pay later’ mentality—is becoming more and more accepted and useful,” Ferris says.
Pros and Cons of Financing and Engagement Ring
The biggest reason Clayman sees for financing is when you need or want something now and don’t want to wait until you have the money saved up. Typically, though not always, with financing, comes interest. Clayman says to look at financing tools as just that—a tool to help you pay rather than a solution to not having enough money. “You’re paying a price for being able to adjust the time to one of your convenience,” she says about the tradeoff between paying interest and being able to purchase a ring right away.
She also explains that it’s human nature to be more motivated to pay off debt than it is to save up money ahead of time. It’s an “external push to pay rather than internal push,” she describes.
Another incentive a lot of people have for financing on a credit card is the points. Moran says most customers who are not paying upfront choose to use a credit card so they can take advantage of the points and benefits. However, that can be a double-edged sword, says Clayman. She calls them a “mental shortcut” and says they “obscure our ability to see the cost … we think spending is OK because we focus on benefit rather than cost, which would be interest.” But, if you’re responsible about paying your credit card bill each month, you should be good.
On the flip side, paying in full has its benefits too. Moran says his store as well as other engagement ring vendors offer discounts for customers who pay via bank wire, Zelle, or check.
“My advice would be to see which payment method benefits you the most—a discount or the incentives offered by your credit card,” he offers.
So, how much should you spend on an engagement ring—whether financing or not? The median budget for engagement rings among Americans was $3,000 in 2021. And, Moran says that’s actually where the price range typically starts for customers who choose to finance. Those who spend between $3,000 and $10,000 at his store, he says, tend to opt for financing options, while those with a budget over $10,000 tend to be people who have a lot of disposable income and can pay cash. But, statistics aside, experts all agree that a budget is something only you can land on.
Moran does offer a trick of the trade, though: “Picture an amount to spend on an engagement ring that you think is uncomfortable for you—an amount that would be too much,” he advises. “Now take off 10 percent. Still too much? Take off another 10 percent. Keep doing that until you get to a number that you feel is reasonable. Remember, an engagement ring should cost enough to make you think twice about the commitment you’re about to make, but it shouldn’t cause you financial duress. That can cause resentment in the relationship and that’s a terrible way to start a marriage!”