American couples spent an average of $5,764 on their engagement rings in 2017, according to a study by The Knot. But spending that much or more won’t guarantee you the perfect ring. What’s more, it’s possible to get the perfect ring and not spend close to that amount.
We’ve put together five engagement ring tips to help you find the right ring, regardless of your budget.
5 engagement ring tips you need to know
When it comes to engagement ring shopping, “you have to balance the value of what you’re getting against the price,” said Dan Moran, founder of Concierge Diamonds. But unless you’re in the jewelry business, it can be hard to know where that balance is.
Before you start shopping for a ring, here’s what you need to know.
1. Don’t base your budget on a rule of thumb
A common recommendation in the jewelry industry is to spend two months’ salary on an engagement ring. It’s not surprising that came from an ad for De Beers, a diamond company.
According to Moran, that approach is irresponsible. “It’s completely unreasonable to expect that everybody can spend two months’ worth of income [on a ring],” he said. “And if you’re making a million dollars a year, does that mean you have to spend close to $200,000 on a diamond? No.”
Instead, Moran recommends a different method to his clients: Think of a number you’d be uncomfortable spending on a diamond and then take off 10%. If you still feel uncomfortable, take off another 10%. Keep doing that until you land on a budget that works for you.
Moran also recommends setting your budget before you set foot in a jewelry store or start shopping online. Otherwise, you could develop what he calls “Best Buy syndrome.”
“It’s like when you go into Best Buy shopping for a 42-inch TV and then see that the 50-inch TV costs only a little bit more and the 55-inch TV is only a little bit more than that,” he said. “In the end, you’ve bought something you didn’t intend to buy and spent more money than you intended to spend.”
2. Know how you’re going to finance the ring
If you haven’t already thought about how you’re going to pay for the ring, none of these other engagement ring tips matter. Paying in cash is ideal because it doesn’t involve going into debt. But that’s not always possible, especially when you also have a wedding and other things to pay for.
It’s important to consider all your options before you go ring shopping. For example, the average personal loan interest rate is 10.22%, according to the Federal Reserve, and getting an unsecured personal loan won’t require you to put down collateral.
Alternatively, a credit card with a 0% introductory APR promotion could help you avoid interest altogether. But if you don’t pay it off before the promotion ends, you could be stuck paying a higher interest rate on the remaining balance.
Whatever option you choose, do your research and find the one that works best for your budget.
3. Don’t get too caught up in grading
If you’re shopping for a diamond ring, the grading can get complicated. Diamond experts use “the four C’s” to determine diamond prices:
- Cut: The way the diamond is cut can affect how much light it reflects. A well-cut diamond can make up for mediocre color and clarity.
- Color: When diamonds form, an impurity or defect in the diamond’s structure can cause it to have color. The less color a diamond has, the more it sparkles.
- Clarity: Most diamonds have tiny blemishes, also known as inclusions. Fewer and smaller inclusions mean better clarity.
- Carat: This is the weight of the diamond. A carat is one-fifth of a gram.
Jewelers might have specific recommendations for color, clarity, and cut. But what matters most, said Moran, is how you see the gem.
“There’s no hard-and-fast rule about what you have to get,” he said. “Everybody’s eyes are different, and beauty is in the eye of the beholder. It doesn’t matter what a salesman sees, and it doesn’t matter what a gem lab sees. It only matters what you see.”
As for what carat you should choose, it’s important to note that the price correlates exponentially with the weight. So, as the gem’s weight increases slowly, the price can go up quickly.
4. Get the right certification
A diamond certification is a document you receive from a third party that describes the gem and its characteristics (think the four C’s). The idea is that a disinterested gem lab doesn’t care whether you buy the diamond, so it has no reason to inflate the value of the diamond to make a sale.
But that’s not always the case, according to Moran.
“There are the several hundred gem labs in the world, [and] I would say 95% or more of them are nonsense,” he said. “They’re in the pocket of some jewelry store and have every motivation in the world to be very generous in their grading.”
To ensure your diamond’s certification is reputable, Moran recommends:
- Gemological Institute of America
- American Gem Society
- European Gemological Laboratory USA
- International Gem Institute
It’s also important to note that each gem lab has its own grading standards, so two diamonds with certificates from different labs won’t be an apples-to-apples comparison. But each lab has internally consistent standards, so comparing two gems with certificates from the same lab is preferable.
5. Get a custom-made ring
It’s not easy to find discounts on diamonds, but it’s possible to save money on your engagement ring by choosing a custom-made option instead of picking one out of the showcase at a jewelry store.
According to Moran, jewelers often have to borrow cash to stock their inventory, and they pass on the interest costs to the customer.
“If you get a ring custom-made, there is no carrying cost,” said Moran. “When a client orders a ring, I’m buying the gold that day, I’m buying the diamonds that day, and I’m delivering it that day. I don’t have a carrying cost to pass on, so my cost basis is lower.”
You also can save money by shopping for an engagement ring online. But with no expert guidance, you could end up getting a lower-quality ring than if you were to have a jeweler custom-make one for you.
Start the next phase of your life right
An engagement ring is a big deal to a lot of people, so getting the perfect one without overpaying can help you start the next phase of your relationship and life on the right foot.
As you follow these engagement ring tips, you’ll be in a better position to get the right ring for your significant other without crippling yourself financially. And if you’re planning to use a personal loan to finance your ring purchase, compare several personal loan companies to make sure you get the best deal.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|