Setting a budget

[domer]

While I know this post will probably evoke a number of different opinions, I figured the members of this site would be best suited to give me an "objective" view on the questions I am about to pose. Basically, I''m approaching the big purchase, and it''s time for me to lay down some financial guidelines. I''ve heard over and over again from my girlfriend how she just wants me and how the ring does not matter in the slightest, but I also know she loves diamonds, and I''ve caught her gawking with admiration at large stones especially. I''m a quality guy myself, so I''m looking for a way to balance the two, and define a decent budget. Let me start off with a little background...

Over the past 3 years, I''ve been saving with pretty much one primary focus...to propose to the woman of my dreams. I was able to save $25,000 over that period of time by living with family and watching my spending, and had always intended to spend it all on her ring/proposal. I do have to say I am a little concerned that if I do end up dropping that much, she''ll be upset with me for spending money that much money and not saving anything. So I''ve arbitrarily cut the budget down to $18K for the diamond, and $20K for the setting and proposal. However, I''m worried that I may still be overdoing it with my zealousness to surprise and wow her. I''ve formulated in my head that I would like to try to get to around 2ct and within the G-H, VS1-VS2 range on an AGS Triple Ideal, Hearts and Arrows diamond, in an attempt to knock her socks off with the size and sparkle, while giving me the satisfaction of knowing I purchased a great stone. I know I may not even be able to get to those specs without raising my $18K budget, but I want something really impressive that will also allow me to sleep at night knowing I got a good deal on a great rock.

So here''re my questions to you. Is this budget unrealistic and financially irresponsible? It''s a great deal of money, but it is after all, only money, and I only plan on doing this once. Plus, I won''t be taking on any debt, and it''s not money I am relying on for my well-being. If the budget is a little high, what would do you think would be more reasonable? And what would you sacrifice? Drop the size a bit? Maybe dip into an I color or a modest SI1? Also, how import do you think it is to balance cut and color (something like a G/VS1) instead of going for something offset (say, I/VS1)? I''d like to stick with my cut constraints, but I guess anything COULD be flexible at this point. I know all of this is "a personal decision", but I still would like to hear what you all have to say. Basically, I''m just trying to determine if I''m being unreasonable in the eyes of an objective audience.

Thanks in advance!

 

[valeria101]

That's plenty for something hovering between 2 and 3 cts. Many would argues that diamonds stop being white at I-J color and eyeclean at SI1-2. Of course, there are plenty of buyers who can perfectly motivate why E-VVS in not good enough, but I am just writing this to make sure that you also know this. After all, the relation between those grades and the look of the tone is not all that straightforward (as in D-F=white, SI=included) and it is not in the "eye of the beholder either".

Did you get to look over a few 2cts stones? Oh, and weight is not the only determinant of size: cut is second... Anyway, a good place to spend an afternoon learning about diamonds is a certain site of GoodOldGold. Nice theory there (maybe they are a little harsh on color grades, but also sell quite a few J-Ks).

If you want that budget to look small, of course you can: this is what diamonds and jewelry is good for. If you want to construct a nice ring, well, that's a different matter, hopefully.

For example, on popular take around here is that cut comes first, color second and clarity third when considering the visual impact of those Cs. So, instead of I-SI why not E-F SI? And branded cuts are not the only diamonds with good light return either, although paying some premium for a good RBC cut makes some sense. In your shoes

, I'd start a broad search with E-G color, SI, 2-3cts, H$A to excellent non-branded cut (some vendors do this kind of ranking and the HCA 'theory' helps test their criteria). even if the idea of starting with the vendors listed on this site may sound like a self-servig argument, I bet you'd find a selection of suitable stones. This would be a place to start. Of course, I am writing these not knowing what your search has been like until now...

PS seems to be most efficient at narrowing dowm people's choices starting from a post containing a few diamonds already selected by the prospective buyer (of course, no need to mention where the things are from). Once you have two-thee diamonds you like, show them (the stats) and a long thread will be guaranteed to follow.

 

[magna2]

domer,

Is your budget realistic? No one except you can determine whether $20K for diamond and setting is reasonable or financially responsible. It is determined by your financial situation and plans. You are the one that sets your own priorities - but should be discussed with your intended since once married your money is also her money. If the $25K that you have saved in the last three years represents the majority of your savings, my recommendation to you would be to lower the budget for the e-ring. There are many other expenses to follow in the course of planning for marriage.

If you are trying to impress her then go for as much wow factor as possible. Frankly, I don't understand your need to impress her but that is a different subject matter. You mentioned that you spied your girlfriend looking at large diamonds and thus came to the conclusion that she wanted something large. Well, I frequently go to car dealerships and look at exotic cars but that doesn't mean that I like to drive one - my Honda(s) will do fine. I could afford a Hummer and admire its' brute looks but I would not buy one - but that is a personal decision.

This goes the same for diamonds. While I could have afforded a much more expensive diamond than the one ended up I purchasing for my wife, my priorities dictated that I go with something more modest in size and price. If I were in your shoes, which I am not, I would go with either the 1.65 ct/H/SI1 H&A GOG diamond or the 1.706 ct/G/VS1 diamondideal diamond that aljdewey has identified.

Determine what is important to you and how much you are willing to spend within your discretionary funds and still meet/fullfill your financial goals. Your budget may very well be reasonable and sound but only you have all the information to make that decision.

 

[hoorray]

Hi Domer,

Women have different opinions on how large their "dream stone" should be, based on age, location, what their peers have and personal style and preferences. There was a poll recently on this topic by Mara, and I think 55% said between 1 and 2 c, with slightly more than half of those below 1.5.

Once again, only you know the right thing for the two of you, but I think you can get plenty of WOW factor and still save a little money from your budget with a slightly smaller stone, and slightly lower clarity. (I like vs2 since it is so safe, but some si1's are eye clean and great deals). Al's suggestions look like some winners! Maybe something like that 1.7c would be a good way to go. It's still going to be quite the stone!

Starting out a new life together is an exciting time with plenty of challenges. Having some extra savings can make a big difference.

Good luck and congrats!

 

[yngdaniel]

I'm concerned that you've spent 3 years living frugally in order to save up money and all you get out of it is a diamond ring. I'm a finance guy by trade, and am pretty conservative with my finances in general, just to put my opinion in perspective.

This represents the great majority of your savings, I say don't do it. Do not spend a 'great deal of money' on a ring. $20K for a ring is cool if $20K represents a small portion of your overall wealth, if $20K isn't a large amount to you. For example, $15-20K goes a long way towards a downpayment on a home, a home you and your intended do not have.

You can get an absolutely gorgeous ring for far less than your budget, I did.

 

[chris-uk04]

I would cut your budget down to 10K tops. You are going to have plenty of other expenses when you get married, like a house down payment, romantic honeymoon, and wedding rings.

Your girlfriend isn't lying when she says she wants you. Of course, all girls want something they can be proud of, but if they really love you they don't expect you to go extremely overboard. Try to forget the bling bling attitude of bigger and flashier. Keep the cut "ideal" as I believe a better cut will return the most sparkle for the buck. Girls seem to be concerned about the amount of sparkle most imporantly. A good cut will also make the diamond seem bigger too.

DeBeers says two months gross salary, so you should DEFENITELY not go above that because that's the diamond company telling you how much to spend. (it's like Ford saying you should spend a year's salary on a car.)

You have said it's only money, but remember it's only a sparkly rock. I'm in the same shoes you are and my budget is going to be about $7000 total. (It's hard to save up 7K in cash!)

Perhaps look at a 1.4 carat stone : 1.37 carat -6.7K

Then you can get some a 2K setting in platinum and side stones. She'll go nuts. The trouble is finding the best value for that one big stone. Remember the price will jump when you hit 1.5 carats or 2.0 carats, so look just slighty under that.

 

[fire&ice]

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On 12/11/2003 4:39:06 AM domer wrote:

So here're my questions to you. Is this budget unrealistic and financially irresponsible? It's a great deal of money, but it is after all, only money, and I only plan on doing this once. Plus, I won't be taking on any debt, and it's not money I am relying on for my well-being. If the budget is a little high, what would do you think would be more reasonable? And what would you sacrifice? Drop the size a bit? Maybe dip into an I color or a modest SI1? Thanks in advance!----------------

If this is all your savings then, *Yes* to the irresponsible question. Sorry to be so brutal. Marriage is tough enough without adding financial strain. You *must* have a safety net in the form of savings. True, you will have expenses like down payment for a house, honeymoon & various miscellaneous expenses for the wedding. But, also consider something unexpected, like loosing your job or an OOPPSS - baby, or other unforseen & unplanned expenses.

I'm with Chris - 10k is a healthy budget. I would aim for close to a 1.5c - bigger than average - stand out from the rest size. G/H VS2/SI1. It's doable for 10K leaving some for a nice setting.

Besides, if she covets big rocks, there are always anniversaries & special occassions to come. Looking forward to things in life is part of the journey.

just my 2c. We were frugal when we were young. Didn't get the new fancy cars right away or the big house right away. You don't just make money. You accumulate wealth. It pays off later in life & gives you a certain financial security that you can unplug from the rat race at any time. That's what I call freedom.

 

[kimong]

Just my opinion, but have you thought of asking her what she wants? I mean it will be less romantic but you could propose to her with a "place holder" ring that's cheap or funny (like a plastic one) and let her know that's it's not her final e ring and that she can choose what she wants.

I mean, being a female myself, I always wanted to pick my own ring as no matter how much my bf tried he would've never guessed what I wanted. Believe me, nothing would be more exciting for a girl than to shop for her own e ring!

In the end your money will be hers too so she may not what to spend it all on a ring. I know my bf's budget and it looks like what I want is around £1K less which is fine with me cause it will just go in paying for our wedding.

Also, not sure what size her fingers are but a huge rock can look silly (read OTT) on small fingers! I've got really tiny fingers so around the 1 ct mark is the most I'm getting.

Good luck anyway!

 

[chris-uk04]

Following up Kimong’s statement, try to get a feel for what she would like subtly, but I wouldn’t go for the ring-pop proposal. I don’t think there’s any romance in letting her shop for her own ring. It won’t be “less romantic” it will be completely utterly unromantic. Some girls who are into diamonds might want to pick, but most girls want the guy to get it because it is coming from him. Part of the whole gift is the effort involved in getting it. Besides, you are doing the research and self education. If she has no education, it will be hard for to understand why a better quality 1.3 carat diamond might look better and bigger than a 1.7 carat diamond of the same price. Then arguing might ensue. Just the £0.02 of a guy in the same shoes as yourself.

 

[Summer]

Lots of good ideas and thoughts here. Another approach might be to go shopping locally (without your gf) and just choose something appealing to you and then see what size, color, and price it is. This would give you some frame of reference to then go on line (if this is how you want to purchase) and look for those similar specifics. This could help determine your price point. Good luck to you!

 

[Hest88]

Are you going to continue living with your parents after the engagement? After the wedding? Will the wedding expenses be paid for by you or by your/her parents?

I'm assuming all the money you've been saving has been going toward this $25k and that none of it has been going into another "bucket" for future living expenses. If that's the case, and speaking as a woman, I'd be a little let down to have an incredible ring and proposal, then realize that that meant we couldn't get married for another three years while you saved up $25k again for our wedding, and then waited another 3 years while we saved up for the downpayment for a house. I think it would be more romantic to say, "I saved up a bunch of money for your ring, your proposal, and our future life together."

I'd suggest you get a GF or her sister to figure out what her ideal ring really is, and use as little as you can to get that for her. Then come up with a less lavish proposal. There are plenty of ways to have a great proposal without spending $20K minus the $2k you want for the setting. I think it's really sweet that you've sacrificed all this for your love, but think of what a great payoff you can have if you didn't spend all the money immediately!

 

[glitterata]

I'm with the folks who think it's a bad idea to blow all that money on a diamond. It's your savings over three years. You've had to live with your parents to save it up, so you're not financially established in the world. And, most important, you think your girlfriend wouldn't want you to spend the money on the ring.

You're about to start a life together in which your money belongs to both of you. This would be a GREAT time to practice making a decision TOGETHER about how much to spend on a major purchase. I think you should talk to her about the budget, even if you eventually select the ring yourself.

If you're worried about the surprise, you could propose with a pretty CZ or a gemstone ring and tell her you'll buy her a diamond engagement ring as soon as you set the budget together. Or you could buy her a ring with a smaller diamond from a place with a 100% upgrade policy and offer to upgrade at once if she wants you to spend more of your savings on the ring.

If it were me starting out, I would be appalled if my boyfriend blew a large percentage of his savings on a ring, rather than something truly useful, like a house, education, investment for our future. I would not feel comfortable with a man who was not financially prudent. However, she might not feel the way I do. It's really, REALLY important to make sure you and she can get on the same page about money, or you will have trouble in your relationship.

 

[fire&ice]

Ditto everything Hest88 said.

She may indeed want a more modest ring.

 

[canadiangrrl]

Don't do it.

I just became engaged. We are not just starting out. And I would still be horrified if my fiance had spent 20k on a ring. Especially if he had been scrimping and saving all that money for years...

Find out what your girlfriend likes. Hest is right - your GF might have modest, frugal tastes (if so, you're in luck.)

 

[Mara]

Spend whatever you feel you should on this ring. Practicality? There is no such thing in my opinion when it comes to sparkly diamonds. The whole thing is very unpractical. You saved with this intention in mind. You sound like you are kind of young, so chances are the fact that this represents all your savings isn't as big of a deal as if you were say 40 with no retirement fund or 401k and wanted to drop your entire savings kitty on a ring. Not that this means go out and spend the entire $25k on a ring! Because you won't need it

But the whole practicality thing IMO tends to fall out the door on a forum like this. This may be the most important thing to you right now...if you can afford it and not sacrifice something around the corner (like a house) then go for it.




That said, I wish we had spent $15k on my ring! At the time we spent less and we thought it was a big deal. But he paid it off in 3 months no problem. Damn! Should have gotten that 2c right off the bat. Now we are buying a house and a few thousand is a drop in the bucket, it's funny how your priorities change. That is why I think you should do what you have been planning to NOW. Later who knows what you may have wished you had done with the $--you will be planning a wedding, moving etc. You can only live in the moment and know you cannot regret it later with a purchase like this IMO.




It's your decision and in the end you do what you want with the money. I personally think that you should get something around 1.75c if you don't really know what she wants, that way its slightly shy of 2c which can be overwhelming to some women, and over the typical marks like 1.50 etc so it will definitely be some serious bling bling.




That said, I would go to G/H and SI (eye clean) for this ring to really get the most bang for your buck. You could probably get something around $13k for with those specs, H&A and then spend about $2k on the setting if you so desire. That puts you at around $15 and you've got the $10k extra as a cushion if you should need it--so your savings isn't entirely wiped out.




I'm not a huge saver. I'm a shopper. A smart one though.

I tend to feel like there is a nice balance between spending and savings, and god only knows if I'll be around later to reap the benefits of saving anyway, so I am a firm believer in making oneself happy TODAY and not worry about next month. Next week maybe.

Of course now that I am older and about to become a homeowner, that view is slowly changing....but it sure was fun while it lasted.

 

[domer]

I definitely agree with mostly everything you all have said. Let me just offer a brief background on the situation so you don't all think I'm some freeloader living with my parents and fantasizing about overly lavish jewelry as a means of getting a girl

We've spent much of the last 3 years doing long distance, and I've lived with family members for 2 of those years as a means of funding my frequent travel expenses, and as a means of saving for our engagement. Needless to say, travelling out to New York every other weekend for the better half of our relationship was rather costly, and I guess you could say I paid rent to the airlines

Still, I was able to save up a good deal of money, while also contributing significantly to a 401(k) and IRA, as a means of saving for our future. Granted, it's retirement money, but compounding interest is a beautiful thing! So no, I won't be blowing ALL of my savings on this purchase, but a good deal of my discretionary savings.

That said, all of you have made great points about finding better values for a little less, and I think setting a more realistic budget of $10-$12K will allow me to still knock her off her feet, without breaking the bank. She's always said she doesn't want much...I think most of what is driving my desire for bigger and "better" is my own personal fixation on always wanting to spoil the hell out of her, even though she doesn't ask for or need it. Then again, while I won't be spending it on her engagement ring, having the money saved for "us" could be just as romantic. Luckily, her family is pretty traditional and will most likely be blessing us with the gift of a wedding, but there are always other expenses that it will be nice to have saved for, as you all have pointed out.

As for the ring, I think I'll stick with my initial position on getting an amazing cut, and sacrifice more along the lines of size (sticking more closely to 1.5ct) and clarity (VS2 or a solid eye clean SI1). I think I'm probably going to just give her a gorgeous diamond in a 6-prong platinum solitaire setting, and go with a recommendation I heard off of a previous post. After I have propsed, give her the option of choosing any setting of her choice. I feel that my strengths are in research and analysis, and I'll be able to find her a great stone online for a great value. As for a setting, it's more a matter of preference, and rather than choosing a setting I think she will probably love, I'll get her a nice 6-prong for presentation, and leave the final decision up to her.

 

[pqcollectibles]

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On 12/11/2003 1:37:53 PM canadiangrrl wrote:

Don't do it.

I just became engaged. We are not just starting out. And I would still be horrified if my fiance had spent 20k on a ring. Especially if he had been scrimping and saving all that money for years...

Find out what your girlfriend likes. Hest is right - your GF might have modest, frugal tastes (if so, you're in luck.)

----------------

As I was scrolling down the page, reading the replies, I kept wondering when I'd see CG say, "Don't do it."

As an old married broad of 23 years now, I have to agree with everyone else. Don't do it. Set a realistic budget for a nice ring. Thinking back, it my hubby had said he'd spent $10K on a ring, I think I woulda died. Of course in my day it was more like $4K-$5K.

There are far too many unknowns to blow your entire savings on an e-ring and the proposal.

Just my $0.02 worth.

 

[Robyn12]

$25K sounds like a lot to me... I don't think most women would want you to spend all or most of your savings on a ring... I think you could get a VERY beautiful ring for a lot less, and put some of that money toward something else for your future together.

FYI, according this survey, the average price of an e-ring is around $3,600... So even if you spend half of what you are considering, IMO, you are still being VERY generous.

http://money.cnn.com/2003/05/30/pf/saving/weddings_costs/

Good luck to you though, in whatever you decide!

 

[DEVO]

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On 12/11/2003 9:01:32 AM yngdaniel wrote:

I'm concerned that you've spent 3 years living frugally in order to save up money and all you get out of it is a diamond ring. I'm a finance guy by trade, and am pretty conservative with my finances in general, just to put my opinion in perspective.

This represents the great majority of your savings, I say don't do it. Do not spend a 'great deal of money' on a ring. $20K for a ring is cool if $20K represents a small portion of your overall wealth, if $20K isn't a large amount to you. For example, $15-20K goes a long way towards a downpayment on a home, a home you and your intended do not have.

You can get an absolutely gorgeous ring for far less than your budget, I did. ----------------

I agree. If this is something you can afford to do then more power to you... but if it isn't then your gf (IMO) will appreciate something for a lot less and use the money for a downpayment on a house, honeymoon, etc. That would be the smart and wise move.

 

[Mara]

Wise schmise.

That $3600 average cost is probably entire US which means that farmers in the Midwest are included with the elitist snobs in NYC...so the average isn't necessarily accurate for everyone....it's more about what's appropriate in your area and for you. Plus with all the 1c $1999 specials in the mall....I am not surprised that people only spend average of $3600. In reality a decent well-cut stone can cost more as most of us know.

 

[stumpy]

Just get her an EightStar...

 

[Hest88]

Domer, I think that's a very wise plan. If I were your GF I'd be impressed enough with that plan to marry you!

I'm also glad you have money saved up for retirement. As you said, though, that's really not liquid income. I don't even think of the money we have in our 401(k) or in our brokerage account as "real" money--which makes it easier to be frugal.

 

[DEVO]

I missed your 2nd post domer,

That sounds like a great plan.

 

[fire&ice]

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On 12/11/2003 2:26:42 PM Hest88 wrote:

Domer, I think that's a very wise plan. If I were your GF I'd be impressed enough with that plan to marry you!

I'm also glad you have money saved up for retirement. As you said, though, that's really not liquid income. I don't even think of the money we have in our 401(k) or in our brokerage account as 'real' money--which makes it easier to be frugal.----------------

Hest88 - I'm just loving you today.

Domer, in the early years of your life cash on hand can really make some great investments for your future together. You can not use your 401k or IRA for those (although you are smart to start early - believe me it adds up). One does not just make money. One accumulates wealth. It's a snow ball effect. 10K will get you a very nice engagement ring. Leaving some for the investment into your future together. Nothing puts more strain on a marriage than financial problems.

 

[domer]

Very wise advice, indeed, from all of you. Thanks again for the help.