How can you put a price tag to love? Engagement ring is a token of love!

You may ask, but if you are setting out to buy an engagement ring for your loved one, we can assure you that the best thing you can do for yourself, is set up a budget. Here are the why’s and how’s.

Why do you need to budget

A wide range of engagement rings are available in the market today. Starting out from simple designs that cost a few hundreds of dollars, there are styles that are available in millions of dollars too. In order to make the best choice of ring from the vivid range available, we suggest you set your budget. Here is a list of more reasons to reinforce that decision.

• Many shoppers will vouch that if you go shopping for a diamond, without a budget, you often end up paying more than what you are comfortable with.
• If you do not decide a price range, often sales people at jewelry stores will decide it for you. They will then show you expensive stones and you will end up paying much more.
• If you have a budget, you can easily shop around, compare different diamonds and rings within the budget and end up with a better deal.
• Finally, with a budget, you will be clear about the balance between the savings you need, the other unavoidable expenditures you have and the amount required for your diamond ring.

How much money to budget

It is really difficult and absolutely personal decision on how much money you must budget for your diamond ring. For some the figure of $400 may seem reasonable, while there may be many who find the figure outrageously low and cheap. While deciding how much money to budget is a personal choice you could go by the industry baseline of setting aside two to three months of your salary. You can opt to use your country’s standard for deciding your budget; other parameters like your salary, savings and upcoming expenses will also be useful.

Country standards for budgeting: Buyers will be surprised to note that the standards for budgeting money for engagement rings vary from country to country. In the United States, for example, setting aside two to three months of salary is considered ideal. However, industry leaders in the UK assure you that the guideline is just one month’s salary and you can get a good diamond ring in that range. The market of Japan tells another story and insists that buyers spend not less than three months of your pay. You can also consider to save 15% to 20% of your annual salary for the engagement ring.

Advanced budgeting rules: With a basic headstart with your country’s guideline, you can next set out an advanced budget too. Keep a tab of your annual income and if your wedding is close, calculate how much you can save up till that date. Next calculate your regular unavoidable expenses (you don’t want to starve without food), wedding budget and other large expenses. If there are the wedding costs followed by an extravagant honeymoon, you may want to save some funds. Plan for other expenses too, like if you plan to move into a new apartment or buy a vehicle at the same time. Subtracting the expenses from the savings will give you a fair idea of the amount you have. If this is not enough, you can also consider financing plans. You can also consider various financing plans to back up your purchase. In such cases, do consider where you will get the financing from and what kind of monthly payments are suitable. You also need to consider how secure your job is and whether a too-expensive purchase can prove dangerous.

Understanding the diamond market: Also keep in mind that not only is the range of diamonds at different prices vivid but an extensive array of stores that cater to your needs are also available. It is thus important to understand the market of diamonds, which encompasses the following.

Understanding the average diamond cost: While the average cost for diamond ring changes from time to time, many jewelers are of the opinion that couples across the world spend approximately $3000 to $5000 for their diamond engagement ring (link to range of engagement rings) purchases. With many couples getting married at an older age, when they are financially well settled, people have more disposable incomes at hand to spend on important jewelry.

Understanding what makes diamonds expensive: Cut, color, carat and clarity are the four main factors that determine the quality and thus the cost of a diamond. Besides this, there are factors like flaws and inclusions that are known to bring down the price of diamonds. educating yourself as much as you can about the diamond market through the diamond tutorial can thus be of help.

Understanding your partner’s tastes: Your budget will also reflect your partner’s taste. If your partner prefers a large rare shape of diamond solitaire, it will cost you more money. However small diamond settings often cost lesser. If your partner is seeking a specific kind of diamond, check out its price at online stores and budget accordingly. If you fall in the segment where you are seeking a large lavish diamond for less, you can compare wholesale loose diamonds and get them customized.

Right tools: Just like any online market, the diamond market also offers buyers a range of tools that make purchasing easier and profitable. Tools and indices by IDEX like its Online Guaranteed Diamond Transaction tool are vital to serious diamond buyers. The Rapaport Index is also a must have for those who want to get the best deal. Which jeweler: Prices often change with the seller. If you are planning to buy your ring from a designer or from a special store, it can cost much more. However a similar design can be purchased for much lesser at an online store. You will therefore need to budget accordingly. Reading a few store reviews can help you decide a good online store that gets you more value for less.

Hidden costs: While you budget just for the ring, keep in mind that some hidden costs may also come up. It is advisable to budget for a little extra amount that can be used for a more expensive metal for the ring, insuring the ring, shipping or customizing. Additional services like engraving, embellishing or adding accents may also increase the cost of the ring. The hidden costs you must however avoid are those that come with salespeople pressurizing you to spend more than what you are comfortable with. Also avoid buying rings that have attractive monthly payment policies, but can put you in debt over the time frame.

Questions to ask yourself while budgeting for an Engagement ring

Once you gone through deciding whether you can afford a diamond ring and have asked yourself how to budget for a diamond ring, there still remain certain questions to ask yourself while budgeting and financing. While these may not seem important right away, reading through them will surely help you while making that transaction.

Should I use financial plans?

 Some online stores also offer useful policies and payment plans that help making your payment easier. Reading about the policies and warranties at different stores may help you ease up your budget. However, you will also need to keep in mind the total time needed to pay the ring off, the rate of interest and your job security over the time period.

Should I get the engagement ring appraised?

Getting your diamond engagement ring appraised by proper authorities like the AGS may not seem useful at the outset, but may profit you on the long run. These are the benefits availed from appraising your ring. 

• You authenticate the value of your diamond
• Useful if you plan to insure your diamond purchase
• Useful in case you need to resell the ring
• Can be used as a proof of ownership and be presented to the police in case the diamond is stolen
• The document can make customs declaration made easier during trips made abroad with the diamond.

Should I get the diamond insured?

While budgeting for an expensive diamond, many customers also prefer to insure their diamond. This often costs extra and needs to be budgeted for. If you are doubtful whether you must get the diamond insured or not, consider these factors. Insurance helps to,

• Provide coverage during theft, loss, mysterious disappearance and damage.
• Avail of either repair or replacement depending upon requirement.
• Issues such as missing stones, antique jewelry and loss outside a certain region may however not be covered.

Finally budget an amount that you are comfortable for an engagement ring. Romantic impulses often make many go overboard with their purchases. But spending more than what you can afford can cause friction in the relationship and lead to differences between you and your partner. Irrespective of whether the budget is large and impressive or small and meaningful, it is important that you are able to purchase a good ring within your limits. Don’t make the mistake like the many buyers and educate yourself about the important 4Cs of diamonds. Shop with trusted names only and if you are in doubt, experts at Gemisimo are here just to help you through.