How Much Money Should You Spend on a Wedding Ring

There are times in everyone’s life when a major purchase is necessary, one that far eclipses anything they are used to spending. Most of these occasions are joyful, but some of them are also surrounded by certain traditions and unwritten spending rules which can leave the inexperienced purchaser a little confused.

In this guide we’ll give you some tips on buying right during these moments, answering questions such as:

  • How Much Should I Spend on an Engagement Ring?
  • How Much Should my First House Cost?
  • What Should I Spend on my First Car?
  • And More

And if you like this article be sure to read our guide on the average cost of a wedding and how you can spend less.

How Much to Spend on First House

House Spend

The average cost of a house in the US is around $200,000, but what that actually get you varies greatly depending on where you are in the United States.

As far as affordability is concerned, experts recommend that your mortgage payments should not exceed 30% of the amount that you take home each month.

It is possible to increase this, and if you’ve been living on high-priced city rent for years and you’re used to losing half your paycheck to that rent, then you may get away with it. But there are bills and maintenance to consider when you own your own home and the ramifications of not meeting those payments are much higher than when you are renting.

If your take-home pay is $5,000 every month, this means you should not get a mortgage higher than $1,400 a month. According to a mortgage calculator based on August 2018 rates, a 30-year fixed mortgage and a down-payment of 10%, that would get you a house worth $200,000 exactly.

In other words, to afford the national average house price, you need to be able to pay $20,000 upfront and earn $5,000 a month.

If you don’t have any more in your savings, then it’s time to start saving. Take a look at or guide to the best savings accounts as well as our tips on saving lots of money.

One of the worst things you can do is submit to a drastically reduced downpayment, as your interest rates will skyrocket and it’s a mistake you could be paying for forever.

How Much Money Should You Spend on an Engagement Ring?

How Much Money Should You Spend on an Engagement Ring

The “rule of thumb” concerning how much you should spend on an engagement ring has changed somewhat over the years and in some cases it changes depending on who you ask.

It is generally between 2 and 3 months, but the difference between the two could be thousands, so that doesn’t really help.

The truth is, you should focus less on the price tag and more on the quality. The last thing you want to do when looking to create a new life with someone is bankrupt yourself before you even tie the knot. There will be bigger expenses ahead (such as everything else on this list) so rein it in.

If you spend some time searching you can often find massive deals on jewelry, and if you’re willing to haggle (few buyers do) then you can save even more. It’s not unheard of for customers to buy rings that are 80% to 90% off their original retail price.

It's also important to remember how much money you're dealing with. It’s common for buyers to work in percentages, which is to say they won’t care about paying 5% or 10% more if it means they are getting something fractionally better. But when the stakes are this high, that 5% could be a week’s wages!

The end goal here is not to get the most expensive ring, but to get the one that will impress your partner the most. A little savvy shopping can go along way.

Also, don’t let the jewellery stores and fancy commercials trick you into thinking that most women are getting engagement rings worth $15,000 and up. The average amount paid for an engagement ring in the United States is actually between $5,000 and $6,000.

What Should you Spend on a Wedding Gift?

How Much Money Should You Spend on a Wedding Gift

Convention suggests that you should spend more on a wedding gift if that person is closer to you and if they have spent a lot of money on the wedding. But finding the exact amount can be tricky and when you’re struggling with mountains of debt, it can also be a little terrifying.

Generally we would recommend $30 to $50 for distant friends and co-workers, up to $80 for distant relatives and over $100 for close friends and family.

But as with our advice on how much to spend on an engagement ring, it’s not necessarily about the money, it’s about the gift itself. There are gifts that look like they cost half what they did, and gifts that look like they cost twice as much.

If you want to save yourself some money, don’t give cash or a gift card and search the bargain aisles instead.

How Much Should you Spend on a Car?

Car Spend

First cars are usually bought before a house. In fact, they are often bought before most of the things on this list. That’s something you need to keep in mind, because the last thing you want to do is blow your entire budget on a car and get yourself so heavily into debt that you can’t get a house, an engagement ring or anything else you want in the future.

If you’re buying your first car and don’t have any financial stability or home, then it’s better to scrape what cash together you can and buy used. If you have that security, then you can look into auto loans to get something a little more substantial.

The general rules when buying a car on loan are:

  • Don’t let the total payments exceed 5% of your gross income.
  • Make a downpayment of 20% or more.
  • Make sure the length of the loan is no longer than 5 years.

What Should You Spend on a Wedding Ring?

Wedding bands are generally a lot cheaper than engagement rings. They are a sign of solidarity, not prosperity. Wedding bands are just that: bands. They don’t come adorned with huge diamonds and other jewels, and unless you’re buying gold mined by unicorns in Narnia, you shouldn’t be paying more than a couple of grand for the very best bands.

And in reality, you don’t need to pay more than a few hundred. The gold in these bands is worth hundreds, not thousands, and if it’s a plain band you want you shouldn’t be spending more than 3 figures a piece.