Shopping For A Diamond Engagement Ring? Here Are 5 Financial Tips You Must Know
Sure, we live in an era where it’s cool and trendy to rebel against diamond engagement rings, but remember the dude in Guangzhou who bought 99 iPhones to propose to his girlfriend?
(Coughs) Ex-girlfriend. Yep – after blowing almost 2 years worth of salary, she said no. So yes, modern marriage proposals may come in all shapes and sizes, but the truth is that some girls still prefer diamonds. I mean, come on. It’s literally the stuff of fairytales.
If you think your significant other is the kind who’d like some traditional bling, here are 5 things to watch out for while you shop for that perfect engagement ring.
1. Decide your engagement ring budget
Once upon a time, the “standard” budget to adhere to was 2 months’ salary. This arbitrary rule dates back to the 1980s, and was part of a marketing gimmick by – surprise, surprise – De Beers, who made millions from the campaign.
Almost 4 decades on, I’d like to think that rule is obsolete. If you have earn enough (or have cushy savings) and want to wow your partner with a flawless, 1-carat bling, go ahead. But if it’s because you’re crumbling from societal pressure or feel the need to show off, please think twice. When it comes to budgeting for the engagement ring, you should never feel obliged to pay above your means – especially if it’ll put you in debt.
You’ve probably heard of the diamond’s 4Cs – carat, colour, cut and clarity. These determine how much damage the diamond will deal to your wallet. In general, you can expect to spend between $3,000 to $6,000 for a ring with a diamond of decent grade and about 0.4 to 0.7 carats.
In the next 2 points, we’ll talk about which of the 4Cs we can save money on without compromising the look of the diamond.
2. Pick the desired diamond carat range
Carat is the international unit for diamond and gemstone weight, so naturally, the higher the number, the bigger the diamond. And the bigger the diamond, the most expensive it’ll be.
That being said, don’t stinge on size just because of the cost. You want a diamond that is proportionate to her finger and doesn’t look too big or too small on her. Usually a carat between 0.3 to 0.5 is appropriate, unless size really matters to her, and you’re desperately (over)compensating for something.
Because carat weight has categories, “rounded” carat values like 0.5 and 0.7 will cost much more than one that is 0.48 and 0.68, for example. Assuming all other grades are similar or equal, you could be looking at savings of over $700 for a diamond that is not visibly smaller to the naked eye.
3. Decide what’s an “acceptable” diamond colour
Another of the diamond 4Cs is colour. Since “colour” is caused by impurities in the diamond, a “colourless” diamond is preferred, so don’t go pick ones that are visibly yellow.
That being said, there really isn’t much obvious difference between a diamond graded “D” for “absolutely colourless”, and “F” for “almost totally colourless” (well, to the untrained eye, anyway). But there is a $1,500 difference in their prices, simply because the former is rarer than the latter.
You can use the money you’ve saved to get her family another table at the banquet, because she’s definitely not going to dump you over “minute hints of colour”. (And if she does, you miiiiight be better off without her.)
4. Pick a suitable jeweller to craft your engagement ring
Price is a main concern when choosing a jeweller, but it is the service they provide that often sets them apart.
Firstly, there are the local stalwarts like Soo Kee or Lee Hwa, which ride on their decades-old reputation, and charge accordingly. So if budget is a concern, consider up-and-coming firms like JannPaul and Lovis Diamonds, who are popular because of their eagerness to build their customer base with wallet-friendly prices and a high standard of service. You may even be able to get a discount on your ring setting if you buy a diamond from them.
If you’re limited by budget, you can consider ring-shopping online. This is obviously the cheaper option – on sites like Blue Nile and PriceScope, you can save up to 50% on your diamond – but do note that they come with a huge risk. You’ll always need to “pay first, receive later”, and all the certification and photos in the world won’t compare to the experience of holding it before your eyes.
Also, if the online-bought ring doesn’t fit, you’ll still need to look for a local jeweller to have it resized.
5. Pay for your engagement ring… the right way
Let’s be honest here, how often do we spend thousands of dollars in a single purchase? An engagement ring is one of the few times in your life you’ll get to spend thousands of dollars in a day. You’ll want to make the most of your purchase by getting as many discounts or rebates as possible, and the best way to do so is charging it to your credit card.
You can use our credit card comparison tool to find the best credit card for your purchase.
If you’re considering a cashback card, do note that with the exception of unlimited cashback cards, most cards have a cash back cap of $80 to $100, so you’re not likely to get much discount there. A popular alternative is using an air miles credit card. Just make sure to check that the sum is within your credit limit!
As mentioned earlier, it’s never wise to pay more than you can afford. But if you’ve already decided to get an engagement ring that you don’t have enough cash to pay for, here’s a tip: When it comes to credit cards, never pay just the minimum sum. Credit card interest rates are ridiculously high and the last thing you want is to start your life with an ever-increasing credit card debt looming over your head.
If you must, consider taking out a personal loan. Personal loans have interest rates that are significantly lower than any credit card’s, and since you’re going to be making repayment in monthly instalments, there won’t be any surprises when you receive your bill.
Most banks allow you to loan at least 2 months salary, which is just enough to afford that engagement ring.
Do you have any other tips for buying engagement rings? Share them with us.