Purchasing a wedding ring is a new and exciting process, and should be as joyful as possible. Here at Mint Diamonds, we absolutely love working with you to affordably bring your ideal design to life in all of its magnificence. Although setting a budget is not the most “romantic” part of buying engagement rings, it is a very important step which dictates many other aspects. This is why it is the first step in the process. Once you have established your budget, you will then be able to effectively choose a ring style and diamond shape and size.

You’ve probably heard the old “rule” that you should spend 2 month’s salary on an engagement ring. Although the 2 month rule may work for some and the simplicity of this theory is attractive, it is flawed because of our unique individual situations. Simply put, two people making the same amount of money may be able to afford different price points, based on their circumstances. For example, imagine two people, both making $60,000 per year. The first is 25-years-old, living in a cheap 1-bedroom apartment and has $25,000 in savings. The second is 35-years-old, has 2 children in grade school, an expensive car, a mortgage and only $5,000 in savings. Would you still recommend that they both spend the same amount of money on an engagement ring? I think most people would agree that the 25-year-old could responsibly spend a little more, given his extra savings, lower bills and fewer responsibilities. So what is a formula we can use to determine the amount that is right for “us”?

We think that you should spend an amount that you can easily pay yourself back or pay off within 1 year. What we mean is that, if you pay cash for your engagement ring, then you should be able to easily replenish that amount by saving for 12 months or less. And if you finance, then you can pay off the amount in 12 payments or less. Why? Because this amount will not add a significant amount of stress to your life and will not postpone your financial progress too long, especially at this critical time in your life where you will soon be starting a family.

You can determine what this number is for you by finding your “net-net” monthly income and multiplying that by 12. “Net-net” income is the money you are able to save after paying bills and taxes, and contributing to your savings and investments. For example, if your gross income is $5,000/month and your taxes, bills, savings, and investment contributions = $4,500/month, then your “net-net” income is $500 per month. Multiply that by 12 months and your diamond engagement ring budget is $6,000.

Let’s use our 25-year-old friend from earlier as a case study and evaluate his current financial situation:

In this case, our purchaser has determined a budget of $7,500. He can choose to either pay upfront with a wire transfer or credit card, or finance the purchase with the 12-month, 0% financing we offer through KLARNA. Either way, he will easily have his wedding ring paid off within 12 months. We think financial experts would agree this is a smart plan.