De Beers ads in the 1980s famously told people to spend two monthsâ€™ salary on their diamond engagement rings. In the US, thatâ€™s close to $10,000, based on wage data from the Organisation for Economic Cooperation and Development (OECD).
Now another diamond company has come up with a novel way of devising a ring budget, based not on income, but on how much is left each month.
Mint Diamonds, a Texas-based online retailer of custom rings, says purchasers should be able to pay off their engagement rings within a year. To this end, they should calculate their “net-net” monthly income what remains after a host of common expenses and multiply it by 12. So in 12 months, their disposable income will pay for their diamond.
The formula enables people to budget in a way that takes into account their actual financial situation, rather than just their top line.
“Although the two-month rule may work for some and the simplicity of this theory is attractive, it is flawed because of our unique individual situations,” the company said in an online guide for men looking to buy rings for their fiancés-to-be.
“Simply put, two people making the same amount of money may be able to afford different price points, based on their circumstances,” it added.
A man with a lot of savings and low expenses is in a better position to spend more on a ring than someone in the opposite situation, Mint Diamonds explained.
De Beers’ mantra of two months lasted for decades. This new one may be more appealing to the current generation.