Man Proposing to GirlfriendAn engagement ring is an instantly recognisable gift symbolising love, devotion, lifetime commitment and a romantic promise of marriage. So, how much should you spend on an engagement ring? Should you be waving goodbye to up to three month’s salary, or searching for a supermarket bargain?

It was not until after the war in 1947 that any particular price expectation was defined – DeBeers tried to boost diamond sales with the slogan ‘diamonds are forever’ and by suggesting that the equivalent of one month’s income should be spent on the engagement ring. This multiple later increased to two months’ income – in fact there are now many sources which suggest an expectation of up to three times the monthly income!

Of course, in today’s economic climate, this is simply not possible for many people. Remember also that buying the engagement ring is probably the first cost of many wedding related expenses, as most couples foot the wedding bill themselves these days. Ultimately, the amount you spend is up to you, and has to be decided on your own personal circumstances.

The symbol of love, devotion and commitment is the most important thing – it matters much less whether you save up 3 month’s income for a glittering rock, or you don’t spend a penny and use a family heirloom (like Prince William!).

Where to spend?

Engagement Ring In BoxThe best places to find good value jewellery is in the large city jewellery specialists, such as the Birmingham Jewellery quarter or London’s Hatton Gardens. By all means, buy from reputable online dealers but do bear in mind that some diamonds are bought from countries whose governments invest the profits in a less than ethical manner, so consider carefully the sourcing of your diamond.

Don’t give in to pressurised sales pitches and special offers – decide on a budget first and stick to it. Avoid impulse purchases, instead compare prices and don’t be afraid to haggle.

But if I spend more, I will be making a good investment for the future?

The original base value of any ring is marked up – often at least 100% plus VAT – to cover the shop’s décor, staff, heating, insurance, rent and so on. In addition to this, your investment has annual ownership costs such as insurance as well as annual maintenance required under the guarantee terms and conditions.

This means that even a high quality engagement ring may take decades to be considered as even a reasonable investment in true financial terms. The theory that a diamond ring is an investment seems to stem from the wartime era, as a last resort, the engagement ring could be pawned (for much less than it was worth).

Save or borrow?

If you know you are going to propose, then start saving now! Work out how much you can afford to put by each month, look at how long you have and hey presto, there is your budget. Historically, saving for the ring proved to the bride-to-be’s family that their potential son in law could save for their future home.

For those with good financial control and a good credit rating, when you have saved enough make your purchase using a credit card that offers cash back (and pay off the balance in full before any interest is accrued). Another benefit of buying using a credit card is that you automatically get consumer protection in case the company you are buying your ring from goes bust.

If you take out credit to buy your engagement ring without saving first, make sure you can afford the repayments, that you choose a card with a low APR and that you pay it back as fast as possible. An engagement ring should not saddle you with a lifetime of debt!

Insure your ring

Given that the average UK salary for 2011 is £26,200, three month’s take home salary would be in the region of £5,000! Even if you spend one month’s salary or less, you will undoubtedly want to insure your ring. Many home insurance policies will cover this, but check that your ring does not exceed the value for items taken out of the home, or that you do not have to separately insure jewellery items. You can also find specific engagement ring insurance. Whichever route you take, it is advisable to take photographs of the ring, its valuation certificate and receipt. Keep the documents in a fire proof box in your home and the photographs somewhere safe away from home.

But I still don’t know how much to spend?

It is true, no one wants to be seen as skimping on an engagement ring. The industry knows this, and plays up to it when encouraging people to spend more than their budget. Don’t get sucked in by the marketing hype – expensive does not necessarily mean that it is more beautiful. Which do you think your bride-to-be will be more interested in – a sparkling diamond that costs more than you can afford, or your romantic proposal to spend the rest of your lives together?

While a month’s salary is a useful rule of thumb, it is more important to stick within a budget that you can afford. The Beatles were quite right – “I don’t care too much for money… because money can’t buy me love”!

Diamonds are forever – how to know if you are getting good value

Engagement RingThe most popular engagement ring is a diamond solitaire. If you plan to buy one, make sure you understand the basics of diamond ratings so you get the most value from your hard earned cash.

Cut: The most common shape is the round cut, but others include the emerald, the pear, the marquise, the princess, the oval and the heart shape. The quality of cut determines the brilliance and sparkle of the finished stone.

Colour: The most valuable and rare colour is white (colourless). Jewellers grade absolutely colourless diamonds with a “D”. Anything up to a “J” is considered colourless to the naked eye. Diamonds with a very strong and distinct colour are extremely rare and are called fancies.

Clarity: Also known as “nature’s fingerprints”, diamond inclusions look like small clouds or feathers but are usually invisible to the naked eye. The best rating is IF (internally flawless), the worst I3 (imperfect 3). As long as the stone is graded SI1 (Slightly Included 1) or better the clarity of the diamond is considered fine.

Carat: The average size of most engagement-ring diamonds is somewhere between one carat and half a carat –i.e. 100-200mgm. (Do not confuse carats with karats, the unit of purity for gold).

Choose carefully

Of course, if you are buying the ring before the proposal, you need to be fairly confident of your bride-to-be’s personal tastes and ring size. Make sure you check with the shop that an exchange is possible, the time-scale you must do this in, and that there is a fairly wide range of alternative styles to choose from within your budget. much depth as you are able to ensure you get the best value, regardless of budget.

A brief history

Although betrothal gifts date back as far as Roman times, it was not until the 20th century that the diamond engagement ring became commonplace. Indeed, before the end of the 19th century, the bride-to-be sometimes received a sewing thimble as a promise of marriage!