Making Your Dollars Go The Farthest

Part 4 of 6 in the engagement ring series  

Remember those times when we were given an allowance and got to go spend it at the toy store?

For me, it was those times when we would take our allowance and walk up to Wally World.  For us, that was Wal-Mart.  (You know you are a city when you have a Wal-Mart!)

But we would take our 30 bucks and head up Johnson Ferry to the Wal-Mart.  Sometimes stopping at the Shell on the way to get a slushie for the last half of the walk to Wal-Mart.

Once we got to Wal-Mart, the decisions had to start being made.  But first, we stirred up a little trouble in the sports section throwing the footballs.  Or maybe trouble brewed in the toy gun section as we made a ruckus shooting all the toy guns.

But eventually, we would have to head home and we didn’t want to head home empty-handed.

Choices had to start being made.  How far would our 30 bucks (or maybe now 28 bucks after the slushie) go?

At this point in our life, the decisions that we made were solely based on how much joy they would provide.  It was such a simple way of life.

We need to determine if we wanted to get the GI Joe, the NERF football, a pack of baseball cards and a set of pogs.  Or did we want to go the route of getting two wrestling action figures and a wrestling ring for them to fight in?  Or maybe we could get the pogs and two wrestling action figures with a smaller NERF football.

Oh the decisions!

We had to give and take and weigh the amount of joy.  Would more joy be felt from more items?  Or did the fewer (bigger) items lead to more joy for a longer time?

We had to determine what was most important to us and then make the purchase.  Sometimes it was that we wanted the biggest possible toy we could get.  While other days, it was more of the stay medium size and go for quantity.

But even before we realized it, we were practicing how to stretch a dollar…things that have now been passed down to others or donated.  But we practiced this idea and didn’t even know it.

Even 20 years later, we are going through the same thought processes.  But instead of determining whether to get the big NERF football or the smaller one with a set of pogs, we are determining whether to get the larger diamond with lesser clarity or a smaller diamond with great clarity, color and cut.

A much pricier decision, but nonetheless the same decision process.

 

Decisions beyond carat…

The real problem with buying a ring is understanding how far each decision on one of the four Cs can take us.

When we went to Wally World, it was easy to do the math in our head (or on our fingers) of what each decision meant.

If we went with the big NERF football, it would cost us 12 bucks, giving us only 18 bucks to spend.  But if we went with a smaller NERF football, it would cost six bucks and this would allow us to spend 24 dollars elsewhere.  This meant we would be able to get the pogs and even something else.

But with a ring, we have no clue what each of the different Cs cost.  It’s hard to determine this when you are sitting in the jeweler looking at these diamonds.

So many different aspects are involved and so many different scenarios could be played out that we really don’t have the time while in the jeweler to make necessary decisions.

I mean, hell, you could look at an excellent cut diamond with a color grade of G, a clarity grade of VS2 and be a 1.01 carat.  Then you could do another iteration of excellent cut, H color, clarity of SI1 and 1.02 carat.

And that is changing three variables and getting two different prices.  And we don’t know which variable caused the difference in price.

So many variables and different combinations need to be analyzed.  This makes it hard to get an apple-to-apples comparison.

That’s what I tried to accomplish for us here.

 

Small versus large – the NERF football guide for diamond rings

Alright, so here is what I did:  I went to Pricescope.com and utilized their search and compared tool to get these prices.

I tried to hold the variable constant in order to make the comparisons as apple to apple as possible.  I only changed one variable at a time.

Then, we will walk through an example of how far your budget could actually take you.

 

Shape

We must start with shape.  The more popular shape for a ring these days is the round cut.  Also, many people choose a cushion cut.  But this is really your lady’s preference.

This is a decision that you will need to work to get, either via your lady herself, or her sister or her best friend.

From a price standpoint, there is definitely a difference.  I leveraged the resources over at bluenile.com for this one.  Given all other aspects the same (color, clarity, cut and carat in the range of 1.00-1.05), they looked for the lowest priced diamond of each shape.

What they found was that the round diamond was the most expensive at about $5,404.  The cushion, on the other hand, was the least expensive $3,799.  A princess diamond was up there with a price of about $4,124 and then an oval diamond at $4,531.

So you can see how the difference in shape impacts price.  This may not be an area you can budge on because your future fiancée will probably want a particular shape.

But the difference between prices from a round to a cushion is nearly 50%!  So, you may want to push your lady down that road!!

 

Cut

Here is an area that, I personally, don’t budge.  I think that this is the MOST important aspect of the diamond.

This is what causes it to shine and bling.  Personally, (more of my preference later) I would only go with an excellent cut.

But utilizing the round diamond as my example, I took a look at the differences in price based on cut.  Take a look at the chart below of three similar round shape diamonds with only a different cut.

diamond cut pricing chart

 

You can see how as we move down the cut scale, the price of the diamond falls.  The example used for the good cut has a different color, but you get the gist of the example.

So, by going all the way down to a fair cut, we could save nearly 20%.  This means we could use those saved dollars to get a bigger carat.  But the question is whether you want your big diamond to have a dull appeal in the light.

That is what you are giving up when you go down the cut scale.

 

Clarity

This is an area I think we can really stretch our dollar.  This is the decision that is looking at how many specs are seen within the diamond.

There is an area of the spectrum that we can really save some money to spend on another C, by also not losing any appeal of the diamond to the human eye.  Because most of the specs (and the reason for lower grades) can only be seen with a microscope.

Take a look at the examples that I pulled for round diamonds and only adjusting the clarity.

diamond clarity cost chart

 

Here I kept everything the same, except the clarity.  We made the cut of the diamond Very Good, but we just wanted to see how changing the clarity impacts the price of the diamond.

And what we can see is that in the middle of the clarity grid (these are ranked from best clarity on the top to worst on the bottom), we can get great value.

Remember that in a past post we talked about the ability to really go down to clarity of SI1 and not be able to see any issues with the diamond from the human eye.

So, if we were to go all the way down to SI1, we could save nearly 50% relative to getting a basically flawless diamond.  This allows us to still get great quality while also being able to save a good chunk of change to spend on one of the upcoming Cs.

 

Color

This is another one of those factors where we can move down the spectrum and stretch the dollar a little bit.

Remember, here is where we are making the decision to how clear the diamond is.  We can choose colorless, which is the best, but we can also get near colorless (we wouldn’t be able to tell the difference) and save some dollar bills!

Here is the example that I pulled by keeping all factors the same with the exception of color for a round shape diamond.

diamond color pricing chart

 

Remember that D-F is the range that is deemed to be colorless.  And G-J are deemed to be near colorless.

This means that we can move down the color spectrum into that G-J range and really save some moolah.  By choosing a diamond with a G color rather than a D, we are saving nearly 11.50% (all things equal).

If we go all the way down to a diamond with a J color, then we would be able to save nearly 22%.

Again, these are the decisions that make a difference in how much we can spend on the other aspects that mean more to us.  We, also, don’t want to make a poor decision with color (or clarity) where the decision actually diminishes the diamond to the human eye.

For me, diminishing the diamond to the eye with a microscope is fine… but not the human eye.

 

Carat

This is the last C, but the one that everyone loves.

We all know that the bigger the diamond, the more it costs. But what I wanted to look at is by just how much more is it. And can we use some of our savings from color and clarity to help get a bigger diamond.

With the below chart I was trying to get an idea on the costs as we increase carats.  I used the round diamond again and tried to keep everything the same.

diamond carat pricing chart

 

In this example, we see how the price goes up as we get a bigger diamond.  Duh!

The only reason that the 2.01 carat diamond is less is due to the cut being good versus very good.

But the bigger point I wanted to show was at the 1.00 versus the 1.01 diamond.  The 1.01 carat diamond is nearly $200 more than the 1 carat diamond.  But we have already seen that we would be able to save much more than this with decisions with the clarity and color.

That means we can use those savings to bump up the carat.  And along the way, we have held the cut the same.  So we are getting the best of both worlds.  Great sparkle with a great size!

 

One last example to hit the point home

I ran one last example to hit home this point.

So take a look at three rings that I pulled and kept everything the same except for carat.

diamond pricing chart 1

 

But say my budget was only $10,000 or $15,000 and I really wanted to get option 2 or 3.

So, I changed those two Cs that we talked about earlier to help get us into budget.  I changed color and clarity.

diamond pricing chart 2

 

And here you can see how, by going down just one notch on color and keeping everything else the same for diamond #2, I was able to get an excellent cut diamond for under $10,000.  That one decision saved me nearly $1,600!

Then in order to get option 3, I was able to go one-step down in clarity and one notch down on color to reduce the price of a 2+ carat diamond by over $5,000!

This is what I have meant about being able to move the levers with the clarity and color Cs to allow us to be sure we keep the excellent cut and increase what we all want to increase… the carat.

 

Putting a bow on it

For some people, they have already been able to determine how much they want to spend and that makes the process a bit easier.  Because you can play the same game we did above and find the best ring for your money.

Others may know what their lady wants from a shape and carat standpoint and we can then juggle the other Cs to get to a price that best fits our budget.

But for others, they may not have any starting point.  Here is what I suggest:

  • Don’t budge on cut. Anchor your decision with an excellent cut diamond and don’t budge.
  • Go with clarity of VS2 or SI1. This gets the most bang for your buck and allows for us to improve carat.
  • For color, go with either a G or H. If you want better that is fine, but you will have to sacrifice size.  I think that staying in this range gives you the ability to really maximize the size.
  • And then play around with carat to find the appropriate size that fits into what you are able to spend.

When you get to that carat option, you have to make the decision of the most affordable price based on one of two things.  How much you already have saved?  Or, given your financial situation are you going to be able to save the amount of money needed to buy the particular diamond in time for when you want to propose to your lady?

That’s how you determine what your goal needs to be for an engagement ring.

Finally, we are able to now walk into that jeweler with a game plan.  With an ability to measure the diamonds just like we did when we were determining whether to get the small NERF football or the big one.

After you make this purchase, be sure to stop and get yourself a slushie… just for old times’ sake, and because you deserve it!