How Much Should I Spend on a Engagement Ring

Common sense dictates that the amount you spend on a diamond ring will depend on:

  • how much cash you can spare without getting into enormous debt
  • how much you love your future wife
  • whether or not you consider a diamond ring an investment

Let’s discuss each of these factors so that you can weigh the pros and cons of spending $1,000.00 or $18,000.00 on that diamond.

Factor # 1: How much cash can you spare without incurring debt?

When shopping around for a diamond ring, remember that it’s not the only expense you have to worry about. Buying a diamond ring is just the beginning of a string of expenses that will color your life once you pop the question. Of course we’re not counting the many dinners, movies, picnics, surprise gifts, birthday, Christmas and New Year’s bashes that you’ve spent for your sweetheart prior to THE question.

We’re just taking into account the costs for the engagement, wedding and honeymoon, going forward. Okay, talk has it that an average wedding these days in North America with a guest count of 150 and a reception party in a hotel could cost anywhere between $25,000 and up. If you’re planning a real grand wedding with a live orchestra, fancy favors, ornate invitations, an Eiffel tower wedding cake and vintage champagne, then the modest expense of $25K has already tripled.

So if you do go ahead and purchase a diamond ring that costs close to $5,000 or $10,000, what will your cash flow look like by the time the wedding party is over and you’re back from the honeymoon? If you’re planning to raise kids right after that idyllic escapade, you’ll need a house, or at least pay rent while you’re house-hunting.

Your credit card company has upped your ceiling limit so that you can really splurge for this next exciting chapter of your life, but do you honestly think that getting into debt right before settling down is wise? Won’t that set a precedent? Something like a tiny voice inside you is saying, “heck you’re in debt anyway, why not buy a house with a pool and stretch that debt further?”

Perhaps it’s time to watch Oprah when she does those personal bankruptcies series. Some of the couples who confess to their overspending just tear your heart out.

Before you pay the jeweler for that diamond ring, just keep saying over and over again: this will add to my debt if I’m paying for it with a credit card.

Like we said it’s only the beginning of a long string of expenses…

Factor # 2: How much you love your future wife

Oh sure, love is a many-splendored thing, but love is also blind. Unless you stipulate in the pre-nuptial agreement that you get your diamond ring back should there be a divorce, that ring will belong to her 100% once you slip it into her finger. That’s one.

Two, if you’ve been a cheap date while you were in the getting-to-know-you stage and your idea of a fun date was to take her for the early bird special in a Chinese restaurant, then she deserves only the best diamond ring as a gesture of your love and to compensate for the times you didn’t splurge on her. If there’s anything that a woman can sniff a mile away, it’s a cheapskate.

We’ll repeat: if you love her unconditionally, and you believe you’ve found your soul mate, then please open up your wallet and buy her a beautiful diamond ring that will bring tears to her eyes, pledge undivided loyalty to you, raise your children, do your shirts, make home-cooked meals the way your mother made them, drop you off and pick you up at the airport, and forward your emails to wherever you are.

Back to the question: how much does one spend on a diamond ring? A $5,000-$10,000 ring should “cut” it.

That much she deserves.

You love your future wife, that’s settled. Let’s talk about how the diamond ring might serve as your personal statement. First, you want to express your love in quantifiable terms. That’s fine. Second, you’re buying an expensive diamond ring because you know there’s a sense of pleasure in giving, and you want to feel the pleasure of seeing her wear it 365 days a year. What her friends and family will say about the ring – the oohhs and ahhs – will be music to your ears. They’ll see you as a generous and respectable gentleman who puts a premium on his future partner. After all, love is a rare and priceless commodity. Third, you want the ring to remind her of your love and commitment because you probably will forget to say ‘I love you’ when life gets hectic and you’re away on business most of the time. When that sparkle catches her eye, she’ll think of you. The ring is the symbol of your life together.

We remember an anonymous saying about love and diamonds being like a poker game: “Love, like a poker game starts with a pair; with her getting a flush, him showing a diamond and both ending up together with a full house.”

Factor # 3: Whether or not you consider a diamond ring an investment

Very few commodities these days appreciate in value. Your BMW, iPod, VCR, GPS and skis all go down in value when used. It seems only a house and a diamond ring don’t depreciate, unless of course both are neglected over time or, the house and jewelry markets experience a crash.

Still, jewelry is considered a sound investment by many. The idea, however, is to obtain good value at the time of purchase. To determine if the ring is of good value, you’ll need to have it appraised. Your insurers will also provide clues as to whether you paid value for it because the insurance premium will probably be steep. Certified and accredited jewelers are also a good bet. Gather as much information as you can.

Guard yourself against unrealistic expectations, however. Don’t buy a diamond ring thinking that it will double or triple in value in a few years like a blue chip stock. The only time that can happen is if you buy the famous diamond collections (like what Burton gave to Taylor) and the previous owners were as star-studded as the stones they wore.

We’re not sure if your banker will want to take the diamond ring as collateral for an exceptionally large loan. And when you max out your credit cards, we don’t think the credit card companies will take the diamond and write-off your debt. What they’ll probably ask you is to sell the ring first and then pay any outstanding amounts on your card with the proceeds of the sale.

Sky’s the Limit if…

You’re an independently wealthy entrepreneur, you have stocks and bonds and a private jet. You own castles in Europe but don’t live in them too long because you jet-set to Monaco and gamble away your money without flinching if you lose, or fly to Macau every now and then to wheel and deal. You have a fund that will last you seven lifetimes plus provide for your great grandchildren many times over. You’ve got the Midas touch, everything you touch turns into gold. You’re money-smart, investment-savvy and you’ve got the brains that even Isaac Newton would envy. Money is coming in everyday and you don’t even know why. You’ve lost track of receivables because they’re coming in droves.

Is that your profile? If it is, what to spend on a diamond shouldn’t be such an agonising question for you. We’ll simply recommend that you spend as far as your ego will take you!

She’s one helluva lucky gal…



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