Money Talks, So Should You

6 tips for buying an engagement ring

Marie Gentile
by Marie Gentile, Staff Writer (@dimespring)

Getting down on bended knee and asking for your sweetheart’s hand in marriage is perhaps the most nerve-wracking moment of your life. A close second is picking out the ring. Before you start sweating bullets or make a crazy impulse buy (step away from the pear-shaped diamonds), know that you’re not in it alone. We talked with experts and picked up a few diamond-bright tips for picking out a ring that will perfectly symbolize your love, commitment and financial savvy.

INFOGRAPHIC: Most expensive U.S. cities for dating 

1. Set a budget
Remember, your soon-to-be fiancée hasn’t taken the “for richer or for poorer” vow yet, so don’t scare her away by buying a ring you can’t afford. Set a budget for yourself. We’d all love to take a spare-no-expense approach, but remember that this is a financial transaction, and the bottom line counts.

The rule of thumb says to spend the equivalent of three months’ salary on a ring, but there are no hard-and-fast rules, says Janece White, vice president of Chubb Personal Insurance. Look at your income, figure out a payment plan, and pick a reasonable price range, which may be more or less than three months’ paychecks.

2. Shop, shop and shop some more
Think of this like buying a car. Research prices and products online, and compare jewelers like you would dealerships. Ask friends and family for recommendations. Read online reviews of customer service. This is one of the largest single-item purchases you’ll make in your life, so you want to trust the people you’re dealing with, White says.

It’s also important to recognize that all jewelers are not created equal, says Travis Lejman, a graduate gemologist at the Gemological Appraisal Laboratory of America. Independent, retail and online jewelers will offer different warranties, upgrades and return policies. Independent jewelers may even offer a little more wiggle room where price is concerned, Lejman says. In some cases, you can negotiate 10 to 15 percent off the listed price, if you’ve done your homework. 

READ: Three smart financial habits to develop in your 20s

3. Start with the stone
When buying an engagement ring, you’re actually purchasing two things  a stone and a setting. The stone, or the main diamond, is what accounts for the majority of the cost, even if the setting includes smaller diamonds. You can buy the setting and stone together as a pre-packaged deal, but you probably won’t be getting as much for your money. That’s because once the stone is set, you’ll have a much more difficult time telling the quality of the diamond, White says.

Instead of picking out a pre-set ring, focus on the stone. This is where the four C’s of diamonds come into play: cut, color, clarity and carat. Take all of those things into consideration to find the highest quality diamond. Then, and only then, should you move onto the setting. Keep in mind, you can always go back to the jeweler at another time and pick out a new setting should your tastes change or your pocketbook allow, White says. The stone is the main investment piece, so that’s where you should put your money.

4. Know what you’re looking at
Examining the quality of a stone can be tricky. We’d recommend bringing along a buddy, but if you’ve done the research and are up to the task, try White’s “business card trick”: She recommends taking a business card and folding it lengthwise so the white part of the card is showing. Then, line up a few different loose stones inside the crease, so the card acts as a white background for the diamonds. That way, you can see the individual cut, color and quality of each stone. Even two stones graded exactly the same can look very different when compared side by side.

SLIDESHOW: Top 10 cities for credit scores

5. Focus on cut
We mentioned four C’s, but one ranks above the rest: cut. Don’t confuse cut for shape, says Harris Botnick, president of Worthmore Jewelers. The “cut” we’re talking about actually means the symmetry, proportion and polish of the diamond, or in layman’s terms, the shininess. Botnick recommends that, with the jewelers permission, you look at the diamond in natural daylight, rather than the showcase lights.

“That’s how you’ll be seeing it every day, and if it sparkles in natural light you’ll ultimately be happier with the ring,” he says.

We don’t expect you to be able to examine the intricacies of each diamond, but pay attention to how much light and brightness come through the stone. The more light, the higher the quality of the diamond. Also, stay away from imperfects close to the surface, which interfere with the light of the diamond, White says.

6. Protect your investment
The average cost of a one-carat diamond is $5,000. Should your ring be lost, stolen or broken, that money will go down the drain unless it’s protected. Even if you wait a while before giving it to your significant other, the first thing you should do after you purchase a ring is buy insurance. Don’t assume the ring will be covered by your homeowners or renters insurance, which usually covers only up to $1,000 for lost or stolen jewelry, White says.

Another way to protect your investment for the future is to get an appraisal, a certificate stating the quality, carat, color, shape and clarity of the stone. You’ll typically get one of these from your jeweler along with your bill of sale, but you should also get a second opinion from an independent appraiser or graduate gemologist.

Once you’ve put the ring on her finger the hard part is over, but make sure you maintain the ring. Remember to take it in to the jeweler at least once a year to make sure the prongs are tight and to get the ring cleaned and polished. Usually the jeweler you bought the ring from will do this for free.

Our final piece of advice: Save the romance for the proposal. When it comes to ring-buying, make sure you stay grounded; don’t get swept away by the first pretty thing that catches your eye. Do your research, make a smart investment, and keep these tips in mind before you put a ring on it. 

Marie Gentile is a personal finance reporter and content producer at Dimespring. She has a bachelor's degree in journalism from Marquette University. A native Midwesterner, Marie is now living in Atlanta and adjusting to life below the Mason-Dixon.