How much you should spend on an engagement ring depends on a number of factors including your income, financial obligations (i.e. student loans, car loans, living expenses) and how much value you place on tradition. At one time, men were counseled to spend 25%, or 3 months, of their annual salary income on an engagement ring, but based on current census data, most couples spend about 12% or 1.5 months salary, less than half the traditional amount. This figure suggests that a man earning about $50,000 a year would spend $6,000 on an engagement ring.
Saving vs Spending
While the romantic ideal of surprising your future wife with a beautiful ring is lovely, it may be better to sit down and discuss your relationship before you even consider buying an expensive ring. Your future bride might rather save the money and spend it on an elaborate wedding or honeymoon, a down payment on a house, or pay off student loans and personal debts. In these latter scenarios, the money would actually be invested in strengthening your financial future together.
At the end of the day, let’s be honest – Tiffany’s, De Beers, Zales, Kay and Jared spend billions of dollars a year advertising the importance of investing so much money into an engagement ring, when, if you think about it, what kind of investment is this really? Diamonds and jewelry are illiquid assets that you will likely never sell, even if they have significantly appreciated in value.
And if you are so desperate that you end up selling your $5,000 wedding and/or engagement rings, then you probably shouldn’t have spent so much to begin with. Not to mention the fact that if you do approach a dealer to sell your jewelry, no business will pay out the full retail/market value of your jewelry because they need room to make a profit as well.
It’s A Woman’s Choice
Additionally, while diamonds are de rigueur (the custom) for engagement rings, not every woman likes diamonds and some may prefer their birth stone or another colored stone like a sapphire or ruby.
The most meaningful engagement rings are family heirlooms and they are usually a lot cheaper (read: “free”). Family heirlooms have sentimental value that is priceless, so consider using your grandmother’s or great grandmother’s ring if you are hoping for a traditional proposal.
The bottom line is – be smart about how much money you spend on an engagement ring. If you are thousands of dollars in debt from credit card, student, or auto loans, don’t splurge on a ring that is half your annual income, but don’t go to the other extreme and propose to the love of your life with a prize you found in a Cracker Jack’s or cereal box.
Every man wants to give his family the world and spare no expense doing it, but if you are in your 20s and still building your financial stability, be reasonable. Buy something classy and beautiful, and get a diamond with a better clarity rather than larger size.
If you are on a budget, be honest with you fiancée, explain your financial situation and promise to buy her the ring she truly deserves when you both are making more money in your 30s. The true measure of how much you love her is how well you treat her every day, not the size of her ring.
Engagement Rings Are Not That Traditional
What many people do not realize is that engagement rings have been a Western tradition for less than 200 years. The custom does not exist at all in many cultures. In some religious sects or cultures, it is customary for the woman to bring a dowry to the marriage. In other cultures, the man must offer a marriage settlement to the father of the bride.
The idea of engagement rings is largely a commercial one that began in the 19th century as a way for jewelers to promote sales. Diamonds only became traditional after De Beers began mining large quantities of the stone in South Africa in the 1930s and 1940s. Their clever advertising campaigns made it seem as if only diamonds expressed everlasting love.
Buying A Diamond
If you have already decided to buy a ring, consider how much you can reasonably spend and pay cash. Do not put this purchase on your credit card and take a year to pay it off – only buy what you can afford to pay off next month. Chain jewelers that offer in-store credit usually will not give you the best deals on quality rings. While many jewelry stores offer pre-set diamond rings, the best way to get an engagement ring is to choose a diamond and have it mounted in a setting of your choice.
The quality of diamonds varies and it is important to know the four C’s: Cut, Clarity, Color, and Carats when selecting a stone. Carats refer to the weight of the stone and quality is at least as important as weight/size when picking diamonds. Though size does matter, a slight reduction in carats complemented by an increase in clarity can significantly increase the beauty of a ring.
Cut refers to the shape of the stone and the way the facets are placed. The most popular cut is the round cut, followed by the princess cut. The princess cut allows more of the face of the stone to show, which makes the stone appear larger. Other cuts include square, emerald, cushion (usually found in antique jewelry), oval, marquis, and pear.
Although some stones are cut in a heart shape, this is not a traditional cut and may negatively affect the stone’s value in resale. The cut is the reason the light is refracted from the diamond and a poorly cut diamond will not have that “fire” or “sparkle”.
Clarity is a measure of the quality of the stone. Few diamonds are flawless, while most have inclusions or blemishes that affect their value. The GIA Diamond Clarity Grading Scale is as follows, from best to worst quality:
- Flawless (FL)
- Internally Flawless (IF)
- Very Very Slightly Included (VVS1 and VVS2)
- Very Slightly Included (VS1 and VS2)
- Slightly Included (SI1 and SI2)
- Included (I1, I2, and I3)
Flawless stones are the most expensive; internally flawless stones show no inclusions but may have very subtle external blemishes that minor polishing can remove; VVS stones have very small flaws not visible to the naked eye (and even skilled graders may not notice under 10x magnification); and VS stones have flaws that are nearly invisible to the naked eye, though skilled graders may have a good chance of spotting. Stones rated less than VS have flaws that are visible to normal eyesight and affect the brilliance and fire of the diamond.
At one time, most colored diamonds were considered less desirable than blue white stones, but advertising has changed this notion and colored diamonds are now among the most expensive stones. The cost of the stone will depend on the depth and rarity of its color, which may be yellow, blue, pink, purple or brown (chocolate diamonds).The best color rating for traditional blue white stones is usually H or I.
Once a diamond has been selected, the stone must be set in a ring. Settings may cost as little as $100 to $150 or as much as the diamond itself. A plain gold setting with no baguettes or surrounding stones is the least expensive option. More elaborate settings with small decorative diamonds or colored stones can add a cost of $1,000 or more to the cost of the diamond.
Choosing between gold, white gold, and platinum will also affect how much you spend on your engagement ring. High quality jewelers usually sell loose diamonds and will cheerfully educate their customers on the finer points of selecting the best stone. They also have a selection of settings and do not charge for mounting the stone.
Be Honest If You Are Faking It
If you don’t have the money for an expensive diamond, there are a number of cheaper alternatives that have the look without the price tag. Some are as exotic as meteorite stones, while others are as prosaic as cubic zirconia. While these alternatives do not have the allure of diamonds, they can be very pretty and won’t bust the budget.
However, don’t try to pass off a fake as a real diamond since this is a matter of trust between you and your fiancée. This can be especially embarrassing if she unknowingly shows off her ring to a family member or friend who happens to be a jeweler. That is definitely not the way you want her to find out.
An Engagement Ring Isn’t Always Forever
Although the stones may be impervious to damage, rings get lost, fall down drains, or are stolen, so if you buy an expensive ring, it will need to be insured. Standard renter and homeowner insurance policies usually have a limit of $500 to $1,000 on jewelry, so an expensive engagement ring will have to be added to the policy on a rider. There is, of course, an additional charge for the insurance.
Remember that where and what you are now is not what is most important, but where you are going in life is. Although making a financial sacrifice to please your loved one may sound like a grand gesture, financially crippling your future family by overspending on an engagement ring is not.
In the end, it may even be a source of guilt for your future wife. If you are absolutely set on the whole down on one knee, romantic proposal idea, buy the best stone you can afford without resorting to a credit card, or else your payments, like a diamond, may be forever.