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The Cost of Putting a Ring on It

A proposal is an important step in a relationship, so what steps should you take to find the perfect ring?

By Joey Acquanita

An engagement ring can be the ultimate sign of love. However, the cost can set you back a few paychecks. If you are like me and have no idea about the diamond industry, it can be a daunting task diving into the four C’s and other variables that constitute a “quality diamond”. Let’s break down some of these variables for all of you out there thinking about getting down on one knee.

Joey Acquanita is a financial advisor at Family Legacy Financial Solutions, a fee-only financial advising firm based out of Cary, NC. When he's not writing for Retirement Daily, he enjoys playing and watching sports and spending time with his family.

Joey Acquanita

What does he/she want?

Depending on your significant other, they may be very particular in what they want, or they may want to be surprised. If they want to be surprised, I suggest reaching out to close friends and family to get an idea about what they might like. For example, they may want a particular color band or cut. Also, you are going to want to know the size of the ring. That sunset proposal on the beach might not be ideal if the ring is too tight to put on, wouldn’t it? Once you can gather the general information, you can really start digging into the rest.

The 4 C’s of Diamonds

Cut: Round, Princess, Cushion, Emerald, Marquise, Oval, Radian, Pear, Asscher, Heart.

Until about a week ago, I had no idea how many ways you could cut a diamond. You can also add accents and other gems or more diamonds to the ring itself if you wanted to go with a flashier look. There are plenty of articles online to learn more about what professionals say about each cut and whom they look best on. The most common out of these are the round cut, radiant cut, cushion cut, oval cut, and marquise cut.


A diamond carat is essentially the size of the stone. To give reference, 1.00 carat weighs about .20 grams. This will be the most obvious factor of the stone since the size of the ring is the most visible to the naked eye. The bigger the ring, the more carats, the more expensive it is going to get. The average ring purchased in the U.S. weights between 1.08 and 1.2 carats although millennials tend to spend less on engagement rings than previous generations.


A common ranking system grades how colorful, or colorless, the diamond is. Historically, the colorless a diamond is, the higher quality and more expensive it will be. The GIA, Gemological Institute of America, grades diamond from D to Z, with D referring to the most colorless.


The GIA also put together a nice chart to help us less educated figure out which diamonds are of the highest quality based on blemishes. The chart reads as follows:

  • FL (Flawless) 
  • IF (Internally Flawless)
  • VVS1 (Very, Very Slightly Included)
  • VVS2
  • VS1 (Very Slightly Included)
  • VS2
  • SI1 (Slightly Included)
  • SI2
  • I1 (Included)
  • I2

From top to bottom, flawless is utter perfection in the world of diamonds. Think of diamonds in the FL category as the Beyonce of clarity. It’s also important to note that VVS2-IF are diamonds with inclusions that are naked to the human eye but can possibly be seen with 10x magnification.

To wrap this up, the most expensive rings will have lots of carats, D color, and FL clarity.

Earth versus Lab Grown Diamonds

This has been a hot topic in the world of diamonds, however the price of these two diamonds is drastically different. Long story short, earth-grown diamonds are diamonds that are found in the Earth where lab grown diamonds are manufactured in a controlled environment and contain the same chemical and physical attributes as earth-grown. The GIA grades and certifies both diamonds as equals. The only difference is that earth-grown diamonds contain tiny amounts of nitrogen since they are created under the earth’s crust over years. Lab grown diamonds sell at about a 30-40% discount!

The Ring Itself

After you pick the stone, you can also choose to get fancy on the type of ring and style you wish to hold the diamond. Most stores will have different metal bands such as platinum, white gold, yellow gold, or rose gold. On top of that, there are different styled rings that can add some flare to the ring. Or you can just go solitaire with the setting and let that diamond glow.

The Financial Side

I know this is a lot, so let’s break down an example. I can go on some websites such as Brilliant Earth or James Allen and click through ALL these variables to get a quote on how much this would cost.

I suggest getting quotes from a bunch of different vendors just to get an idea of what your price range is. Some of these companies even offer payment plans but be wary of these deals. You should really investigate the fine print before signing up for one of these although they may seem intriguing. The best option is to pay in full what you can offer in cash. James Allen, a popular online retailer, even offers a full reimbursement if you buy a ring twice its value, and this offer never expires. For example, let’s say you can only afford a $2,000 ring right now, you can return that ring in the future and get a $2,000 voucher if the ring you purchase is at least $4,000.

The general rule of thumb says you should spend at least two months’ salary on an engagement ring. To be honest, just do you. You know your significant other and this symbol does not have to be the flashiest if your financial situation is not in the best condition right now. Also, lab grown rings have shown to have less resale value over time. Simply put, another gem can just be grown in a lab. But the look of the ring will be exactly like that of an Earth-grown diamond. For the sake of everyone reading this, I hope you do not have to sell the ring, but it is important to note.

Your Game Plan For Buying an Engagement Ring

  1. Figure out your significant other’s expectations. You can contact friends or family to get a general idea of what he or she might want. 
  2. Do your homework! Start contacting vendors and get quotes on several types of rings to see what fits in your budget. Also, you should consider return policies. I once saw a proposal rejection at Central Park in New York City. The financial advisor in me thought, “I hope he has a 30-day return policy.” 
  3. Another consideration is figuring out how you want to propose. Is a public setting ideal, or should you find a more secluded spot and time? 
  4. Bargain a little. Some of these online retailers can be set on their price and there is less negotiation. However, if you go to a local store, you may be able to get a sweeter deal. I would stay away from the chain stores and find an independent jeweler who may have more leeway in the price. Also, these local spots typically allow you to customize your ring more if you were really trying to go all out. 
  5. Put the money down! Although diamonds are not true investments as we would think of real estate or stocks, you are investing in your future with another individual. You should take some serious time to consider all these ring variables, how you want to propose, and how much is in your budget.

Enjoy the experience! Hopefully, you will only have to do this once. One store I went to even offered some beer or wine while we were waiting for a sales rep. Full disclosure, I am not telling you to shotgun a beer at your local Mom and Pop jewelry store, but this should be treated as a festive event.

About the author: Joey Acquanita

Joey Acquanita is a financial advisor at Family Legacy Financial Solutions, a fee-only financial advising firm based out of Cary, NC. When he's not writing for Retirement Daily, he enjoys playing and watching sports and spending time with his family.

Advisory services provided by Family Legacy Financial Solutions, LLC, a Registered Investment Advisor. Investment Advisor Representatives of Family Legacy Financial Solutions have a fiduciary duty to act in the best interests of our clients and to disclose any conflicts of interests and any associated fees.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals (Family Legacy Tax Solutions, LLC) for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. This site is published for residents of the United States only. Not all of the products and services referenced on this site may be available in every state and through every representative listed.

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