Diamond Budget: Shoppers Buying Guide

How much money should you budget for an engagement diamond ring? There is no single answer to that question because everyone’s situation is different. For some shoppers, $500 is the maximum they can spend and of course, there are celebrities who can and do spend millions on an engagement diamond ring. The diamond industry has set a guideline of two months salary for what to spend on the engagement ring. Interestingly, this is the guideline for the United States. In the United Kingdom, the guideline is one month’s salary and in Japan, it is three months salary.

The budget that is right for the diamond shopper depends on a variety of issues and the wise shopper assesses budget considerations before making their purchase decision. In fact, carefully evaluating the budget before starting shopping will help ensure that an impulse purchase does not become a financial nightmare.

Here are some of the questions diamond shoppers should ask themselves before starting the diamond shopping process.

How much money do you have saved now and what can you expect to save before your target purchase date?

If you are going to finance part of the purchase price, where are you going to get the financing and what monthly payments can you afford? Do you have a job and is your job secure?

What other new expenses are you planning in the near future? Do you need to buy another car, how much and how soon is the wedding and honeymoon, are you planning to move to more expensive housing, do you have student loans or credit cards that need to be paid off? These major financial events often occur soon after a marriage proposal.

A key for a successful marriage is for a couple to work together in setting financial objectives and budget. However, often the engagement ring is a surprise and therefore is a big budget decision made without consulting the girlfriend.

Once the diamond shopper has determined their budget, some other considerations might influence what they actually spend on the diamond engagement ring. A man in love often has a desire to show the extent of his affection by spending more than he can really afford. While spending more money does not ensure a stronger relationship or commitment, the romantic impulse often overwhelms logic for the man who has decided on who he wants to take as his partner in life.

Pressure on the diamond budget can also result from feeling guilty if the woman has indicated that a large and therefore expensive diamond ring is important to her. If family, friends, or associates have large diamonds, there is intense peer pressure to compete on diamond size even when there might be great disparities in disposable income or age. The pressure to prove his love with a more expensive diamond than he can afford can lead to not only financial hardship but also friction in the relationship.

Once the target budget has been set, the shopping challenge is to find the best diamond that meets the diamond shopper’s requirements while staying within the budget. While the diamond is usually the biggest portion of the ring’s price, shoppers need to remember the mounting cost and applicable sales tax.

There are many ways to reduce the price of the diamond engagement ring in order to stay within the budget. Education and research can help determine the optimal combination of size, quality, beauty and convenience for just the right diamond ring. Shoppers who walk into a jewelry store and purchase based on impulse and do not do their due diligence in advance, will likely pay a high price premium and run the risk of making an expensive mistake in terms of quality and beauty.