How much should I spend on an engagement ring?
That's the question posed from a reader to Jeffrey Levine, director of advanced planning at Buckingham Wealth Partners, in this episode of Ask the Hammer.
The answer: First, throw out the rule of thumb that would have you spend two times your monthly salary on a ring. In fact, don't focus so much on the dollar amount at all, said Levine.
And consider spending more of your money on, for instance, a down payment on a house rather than an engagement ring. Of course, it's a personal choice.
And when it comes to cut, clarity and the size of the stone, Levine says it's better, in general, to have a high-quality diamond that is smaller "because of the wow factor generally comes from that sparkle."
Prioritize the cut and more importantly, the clarity over the actual size of the stone, he said. A smaller stone with a good cut and high quality can actually look bigger than a larger stone that lacks the clarity there, said Levine.
And lastly, be very careful where you shop. If possible, go direct to like a diamond broker. "That may be your best bet in terms of getting a more affordable or more reasonable price," he said.