I agree with others, with the engagement ring it should be about what they feel comfortable spending. I have to be honest, while I wanted to buy the best ring I could for my then girlfriend (now wife, approaching 27 years in june), I also would be a bit put off if she had been upset that we didn’t spend a fortune on it (among other things, at the time, definitely didn’t have a fortune, wasn’t making much). I later bought her a nicer ring she really cherishes (friends of mine own a jewelry store, guys are artists and I knew I wouldn’t get ripped off, plus they use Canadian diamonds), and that is always an option as finances improve.
The one word I have to say is be very careful, there are a lot of people who are legitimate and give fair value, but the industry is rife with those trying to rip off people. Even GIA certifications may not mean much, they end up coming down to ‘a matter of opinion’, people who bought a diamond, told it was x level of clarity and so forth, had it appraised later by other people, found it wasn’t what they claimed, sued, and lost…47th street in NYC is famous, but my wife worked for a wholesale Jeweler in that district (not in diamonds), and when she needed to replace the stone in the original ring, which disappeared, the people who owned the store had the manager go with her to certain places, he was a certified gemologist, because so many are quite honestly either charging you more than they should or are ripping you off with crap quality.
Mall stores and chains are generally honest, but you also are paying a big markup going through them, retail jewelry has markups that boggle the mind (for example, my wife worked for a gold jewelry wholesaler, that supplied to chains like Zales, and a bracelet with a unique design Zales was then promoting was running close to 400 retail, my wife could get it for 60 wholesale…so when they run those “40% off sales”, it still is huge markup:).
I also would after buying the diamond get it appraised by several appraisers, which may give you a more real idea of its value, primarily to be able to figure out what to insure it for. Some diamond sellers are honest enough, that when you get the ring appraised, it will be more than they charged you (my wife’s replacement that I bought her was 5500, it was appraised by 2 other appraisers at 7k), but in any event it is good to have that when getting it insured.