CHAPTER 3 | ABOUT THE MONEY

One of the Big Questions for most men buying an engagement ring is ‘How much should I spend?’ And, whenever I am asked this question, my answer is always the same – spend only what you are comfortable with. A key message of this whole book is to set your own parameters; there are no rules. Do not spend more money on this ring than you can afford, or want to spend.

Think creatively about financing, set some realistic expectations and go for quality over quantity. Last of all, don’t forget the insurance.

Read on - or Download Chapter 3 as a pdf to read at your leisure.

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SUMMARY

• You, and only you, should decide what you want to spend on your ring. Ignore salary-based ‘rules’ – it’s all just marketing

• Go for quality over quantity and set your expectations realistically – designers are not magicians but there are ways to design around budgets

• Think about financing and factor in financing costs

• Check your insurance options – a general policy may not be the best choice.

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SET YOUR BUDGET

So yes, this ring is very important, but she will value even more the care and attention you put into finding her a unique ring she will love. You need to feel happy about what you are spending on it. This is not being unromantic or parsimonious, it is purely practical.

You do not want to wake up the next day, next week, or next year, and regret having spent too much money on a piece of jewellery. Worse still, if you ever resent the expense, she will notice. Giving freely with love is an even better feeling than receiving, so you have to be entirely happy about it. Apart from anything else, you don’t want to be in hock to the bank years later or when there is a wedding and a honeymoon to be paid for too.

What you spend on your ring has to fit in with your values as well as your bank balance. It is something which will last forever, so it is probably worth going for quality over quantity, or at least recognising that you can’t get a silk purse of a ring for a sow’s ear of cash. Always set your priorities and be honest with yourself and realistic about what is possible. If your budget is limited and she wants a humungous rock then it all might have to wait a while.

So, before you go looking, decide how much you want to spend and write it down. Do not allow this figure to creep up, no matter how persuasive the salesperson or how beautiful the ring. Set your budget in stone and get the best you can within that limit.

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PETER'S STORY

I had a very inventive client who knew just what sort of ring his girlfriend wanted. He wanted her to have that ring, but he did not have the budget to pay for it, and the plan was that they would be getting married just a few months after he proposed. He could see a lot of expense down the line, but he also wanted her to have the best he could afford. For them this meant that it was going to be platinum and diamonds all the way.

Being a practical man, he had a great solution to this. I designed exactly the ring she wanted, which included a big diamond surrounded by smaller stones, and we made the ring in platinum with all the little diamonds in the halo and down the shank – but the wheeze was we put a large cubic zirconium (fake diamond) in the middle.

This was all done in secret. When he proposed she was bowled over and loved the ring. He did tell her what he had done, and that the plan was to buy the diamond to go in the middle on their first wedding anniversary, when he had saved up enough to pay for that too. She was thrilled and thought that was a great way to do it; they didn’t tell anyone else, and no-one knew or guessed.

So everyone was really happy. She got the ring she wanted, he could afford to pay for it, her mum was super impressed and no-one was any the wiser!

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QUALITY VS PRICE

Whatever you do, don’t make the mistake of compromising on the key elements which are of greatest importance to you just to save a couple of hundred pounds. Make savings elsewhere in the wedding plans – flowers last a day, this ring is for life.

Cutting corners on the important stuff is one of the key mistakes people make when buying a ring, so I have devoted Chapter 4 to the whole subject of the Common Key Mistakes.

HOW TO PAY - FACTOR IN THE FINANCING

There will be a lot more expenses to think about over the next couple of years after she has said ‘Yes’. There will probably be a wedding to plan and save for, you may be saving for a deposit on a place of your own, or even planning a family. So think carefully about the future and the best way to pay for your ring in the medium term.

This is likely to be a significant expense on anyone’s scale, and although we are used to paying for larger items on our credit cards, if you can’t pay off the card in a very short time it is an expensive way to finance your purchase. At the time of writing, banks typically charge 16–25 interest per year on credit card balances, and perhaps a bit less for overdrafts or loans.

Some retailers offer financing arrangements, even 0 financing arrangements, but credit financing is expensive for retailers too. If it sounds too good to be true, it usually is – that 0 deal will already have been factored into the price of your ring.

To offer any form of credit arrangements legally, even to refer a client to a financing organisation, the retailer has to be registered under the Consumer Credit Acts. This is designed to protect people from themselves, but as an unintended consequence it does disadvantage the smaller independents. Registration is an expensive and uncertain business so many smaller retailers and designers are unable to offer this service to their customers, however much they would like to.

If you are thinking of using a credit card, an overdraft, a loan or any other form of financing, you need to know how much interest you will pay because that is part of the cost of your ring. If you have a budget of £3,000 and you will be charged £500 interest while you pay off the financing, you only have £2,500 left to spend on the ring. And even if you keep reducing the balance, interest accrues on all your purchases, not just on the old balances. If you are saving for a wedding, a home or a family, how will those repayments impact on your future plans?

There are of course credit card deals where you are not charged interest for the first six months or so, but these are fast disappearing. Clearly they are designed to get you hooked into that provider so that you end up paying their inflated standard interest rate in the end. But if you know that you can pay the ring off in six months, or however long the deal lasts, and you know you are pretty disciplined about those sort of things, then that could be a good option for you.

It may seem a bit old fashioned in our culture of instant gratification, but you might decide to save up until you have enough to pay for the whole thing, or most of it, before you propose. That could mean putting off your engagement for a while, but at least you won’t have the expense hanging over you after the event. It will also give you time to do your research and plan just exactly how you are going to propose to make it that truly memorable event. After all, if you are going to spend the rest of your lives together, maybe a few months of saving up isn’t the end of the world.

INSURANCE

This seems as good a place as any to remind you about the important matter of insuring your ring as soon as you have purchased it. Choose your jewellery insurer carefully. Adding it to your household policy is not always the best option, and it is well worth considering a specialist jewellery insurer.

Most household insurance policies have a limit on the value of any single item, so if the value of your ring exceeds that limit you would be as well to take out specialist insurance.

Your jeweller may offer a service or be able to recommend a good company, otherwise they are easily located online.

Many general insurance companies use the large jewellery chains when settling claims for lost or stolen jewellery. They do this because they have negotiated a discount with those suppliers. This is why claimants are often pressurised into using that chain to replace their lost valuables. If you want to be able to replace your ring with an exact replica in the unfortunate event that it is lost, do check the terms your general insurer will offer before you add your ring to your policy. If you do not agree to use the specified jewellery chain to replace your ring, you will probably find that your general insurance company will reduce any financial settlement by at least 20 of the insured value. If you insist with them on using your own designer or independent retailer to replace a lost bespoke item they will attempt to negotiate the same discount with that supplier and you may end up having to pay the difference.

In my experience, specialist jewellery insurers do not do this. As long as you have proper valuation documentation from your original jeweller or designer at the time of purchase and have kept your valuation for insurance purposes up to date, specialist insurers are less likely to quibble, faster at settling the claim and more accommodating about replacing your lost items with exact replicas, especially if they are bespoke designs.

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A LOST RING

I designed a very unusual engagement ring for James to give to his fiancée in the spring of 2013, and she really loved it. But while on a beach holiday before their wedding in 2015 she lost it one evening walking back to their hotel. She was devastated, but it could not be found.

I always keep my clients’ design files, so it was a simple matter to create an exact replica of the ring she had lost. I could source the same quality and size of sapphires and an equivalent central diamond. The ring was insured under James’s general insurance – the only problem was that the price of gemstones had gone up.

Before commissioning the replacement, James wanted to be sure his insurance company would cover the cost. In short, they wouldn’t. James had not updated the insured value of his ring, and although his policy stated replacement cost, his insurance company would only honour that if he went to one of their approved suppliers who would not be able to recreate the exact ring they had lost. The best he could achieve was a cash payment of just 80 of the insured value. So, even if gem prices had not risen, he would have had to supplement his insurance settlement to fund the replacement ring. To add insult to injury, they also increased his premiums. Needless to say, James changed insurers at the first opportunity.

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CONCLUSION

The theme of this chapter is that you, and only you, should decide what you want to spend on your ring. So-called traditional rules of one or two months’ salary were created by advertising campaigns and should be treated accordingly.

Set your own budget and stick to it. There are inventive and creative ways to achieve what you want without taking you out of your comfort zone, but you do need to be realistic about what can be achieved. Consider a two-stage option if the budget doesn’t match the aspiration at this stage – there will always be anniversaries when you could upgrade.

Think about how you are going to finance the purchase, and factor any financing costs into the total or it could end up being an expensive purchase for what you are actually getting.

On the subject of things financial, do check your insurance options thoroughly as well. Just adding your ring to your existing household insurance may not be the best way to do it. You might find that a company that specialises in insuring jewellery offers better cover if you do have the misfortune to lose the ring or damage a stone. General insurers have exclusive deals with the multiples in which they get a discount; specialist insurers are more likely to pay the full cost of replacing a designed ring with an exact replica.

Read On – Chapter 4 discusses the Common Mistakes that many people make, and can easily avoid, if they read this.

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