Where did this rule come from? It had to have been from the diamond industry or women. According to so and so, most American’s don’t have an emergency reserve deep enough to sustain more than two months expenses. Assuming your monthly expenses are less than your monthly income, it seems safe to say that if you have a two month emergency reserve you're close too or have the two month minimum to purchase your prospective wife’s engagement ring. It seems that America is able to scrimp and save for matters of the heart but not matters of the home. I was recently at a Tiffany’s looking at engagement rings and found several lovely rings. One ring reflected two months gross salary, another ring reflected two months salary after income tax but not after-tax withholdings, and the last ring represented two months net pay. I couldn’t help but think about the opportunity costs of buying the two month gross pay ring. That kind of money is a down payment on a house or investment property in most parts of the country or can help contribute to a nice nest egg in our out years. Although the sales woman at Tiffany’s mentioned my girlfriend would look at the ring not less than 1,000,000 times in her married life (odd statistic), I think the 1 ½ month net pay ring will have to suffice for now. After this post though, I wonder what the answer will be after my girlfriend discovers I was examining opportunity costs when buying her engagement ring. She can blame socketsite.com. They're very good at examining opportunity costs.