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How much should you really spend on a diamond ring?

So you’ve found your other half, your boo, your life partner and you’re ready to put a ring on it.

Engagement rings are a big investment, both financially and romantically so it’s important you make the right choice.

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While the commonly-quoted guide is to spend the equivalent of two to three months’ salary on a rock, it actually isn’t so black and white, CEO of diamond consultancy Diamond Pro, Michael Fried told Yahoo Finance.

The average couple spend $6,143 on an engagement ring, according to a 2017 Australian online survey.

But if buyers are smart they can save thousands on diamonds that look identical to top-quality rocks, he added.

Where do you start?

“In order to get the best bang for your buck, you need to ensure that you know exactly which quality you are getting,” Fried said.

“There is no point purchasing a D color, flawless clarity grade (the highest respective grades for those qualities).

“You can purchase a lower graded diamond that will look identical to the “perfect” diamond to the naked eye. And you will save oodles of dough while doing it.”

He said buyers should consider diamonds in the HI colour and SI1/2 clarity range. According to the Gemological Institute of America (GIA), Flawless diamonds (FL) are the best, while SI1/2 diamonds often have small flaws generally invisible to the naked eye.

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Given most diamonds are graded using this metric, brand-name diamonds are often accompanied by a needless markup.

“Don’t get caught up in all the marketing for brand name diamonds,” Fried said.

“Diamonds that come from the poshest stores are the same thing as diamonds from a reputable online retailer like James Allen or Blue Nile.

“That premium you are paying for is just the packaging. Sure, Tiffany’s blue box is iconic. But is it worth paying double for your ring to get the box?”

The same goes for differences in carat, or weight. One carat refers to 200 milligrams and price-per-carat increases exponentially with the weight.

Spending thousands more for differences in weight should really be thought through, Fried said.

“Don’t spend more for a diamond unless you can significantly increase the noticeable size difference. For example, it may be worth spending an extra $2,000 if you can get a 1.50ct diamond over a 1.25ct diamond.

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“But I wouldn’t spend $2,000 to go from 1.25ct to 1.30ct. Nobody can actually see the difference in size between a 1.25ct and 1.30ct.”

Check the certification

It’s a lot of money, so you want to make sure the diamond is certified. Fried recommends GIA certification as it’s generally the most well-respected and has no financial stakes in the sale of the diamond.

“When buying a diamond worth more than $2,000, the diamond must have a GIA certificate,” he said.

It’s also worth checking that your diamond hasn’t financed conflict. The 2006 film, Blood Diamond highlighted the role diamond mining in Sierra Leone, Angola and the Congo had in financing war efforts.

According to the World Diamond Council, 24 per cent of the world’s diamonds come from riverbeds and the ocean floor. The extraction of these stones is known as alluvial mining, and an estimated 1 million African alluvial diamond miners are carrying out this labour, often to the detriment of the environment.

Young children may also be carrying out this labour, impacting their health and education prospects.

Diamond Pros puts the percentage of informally-sourced diamonds at 15 per cent, in line with the World Diamond Council’s figures.

Conflict-free diamonds may also be tainted with human rights abuses, even if they’re not directly funding conflict, Diamond Pros added.

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They suggested ethically-minded consumers consider lab-created, recycled or Canadian diamonds.

However, according to Diamond Pros, the “optimal solution” is the Kalahari Dream. This is a venture by De Beers – the world’s peak diamond company – which provides diamonds sourced only from reputable African mining companies.

Let’s be reasonable

It’s worth noting the guideline to spend two or three months salary on a ring was devised by De Beers itself, with diamonds for engagement rings a reasonably recent phenomenon.

In the late 1940s, De Beers launched its “A Diamond Is Forever” advertising campaign. It’s been credited with the massive global increase in the percentage of first-time brides who receive diamond engagement rings.

In fact, between 1940 and 1990, that percentage in the US shot up from 10 per cent to 80 per cent.

Described as the slogan of the century by advertising publication, Ad Age, prospective buyers should ask themselves how much they’re buying into the advertising and whether their loved one even wants a diamond.

Younger buyers are also beginning to lean towards lab-created and alternative stones as individuality and price-conscious mindsets take effect.

For whatever stone, you should factor in your income, expenses, savings and possible wedding plans into your decision. It may not be as traditional, but discussing the rock prior to a proposal can also be a smart and romantic move.

The bottom line is that your loved one wouldn’t want you to bankrupt yourself for a ring.