This is actually one of the easiest questions to answer. Quite simply. An Engagement ring should cost exactly what you feel comfortable paying. Do not spend 2-3 months salary if you don’t have to, or you can’t afford it. Those are just marketing ploys by the big companies trying to make you feel like less of a person if you don’t pay as much as you possibly can.
However, don’t confuse paying what you can afford, to not paying what the diamond is actually worth. Another words if your budget says you can only spend $1500, then you need to work with that cost by balancing the 4cs of the diamond the best you can within your budget. Do not think you will find a 1 ct round vs2 / e color diamond plus an engagement ring setting for $1500. Most likely it will not happen. Our best advice is not worry about the quantity or how big the center diamond is, and instead concentrate fully on the quality of the diamond.
Personally speaking, I would rather have a .75 F/G color / VS2/SI1 diamond that is absolutely clean to the naked eye and have a beautiful white color that sparkles with immense brilliance, than to have a 1 ct diamond that is H/I in color (which is yellow tinted) and SI2 in clarity (which show inclusions to the naked eye). People will oooh and ahhh over the .75 diamond, however people will not have much to say to you if the diamond you just gave your fiance is a yellow/ black carbon invested diamond that does not sparkle.
Now that may be an exaggeration there. But you get the point. Work within your budget, not someone else’s budget. But the BEST diamond you can, NOT the biggest. If you go with quality over quantity you can never go wrong.
Also remember, you are most likely just starting out. Why pay above your means for an engagement ring that will only put you in debt. Instead pay ONLY what you can comfortably afford, and use the savings on the wedding, honeymoon, or even on a downpayment on a house. You can always upgrade later.
To sum up. How much should you spend on an engagement ring? Whatever you can comfortably afford.