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By By Jean Chatzky

Shopping for diamonds is big business.  Americans spend at least $30 billion a year on the sparkly gems. But most of us aren’t on a Paris Hilton budget to afford some serious ice. “Today” financial editor Jean Chatzky gives tips on how you can get your bling on any budget.
Who's sells the most bling in the U.S.?
It's not Tiffany's or Cartier. It's not even Zales or Kay Jewelers (despite the fact that, particularly this time of year, you can't turn on the television without seeing one of their advertisements). It's — drum roll please — Wal-Mart. That's right. According to National Jeweler magazine, an industry publication, Wal-Mart (and its Sam's Club sister) was the No. 1 diamond seller in America with sales of $2.6 billion last year. Zales was second. Costco was third.

Surprised? I certainly was, particularly when I walked up to the counter at Sam's Club in Elmsford, N.Y., and found a $45,000 diamond solitaire ring in the case. But the fact that you can now find rocks of all shapes, sizes, colors (not only white but pink and yellow) and qualities at these nontraditional jewelers (as well as over the Internet on sites like — Amazon.com and Overstock.com) raises a slew of questions, starting with this one: What do you need to know  what precautions do you need to take — when buying a diamond that doesn't come in a little blue box? Here's the lowdown:

The four Cs are still paramountWhen you buy a diamond, you're buying carat (size), cut (shape), color and clarity. Diamonds have an alphabetized color scale that starts at D and goes to Z. D, E and F are considered colorless and are the best and most expensive. The closer you get toward Z the more yellowish stones look. The clarity scale goes from IF, which stands for internally flawless — the best and most expensive — to VVS, VS, SI and I. V stands for very, S for slight, and I for inclusions or flaws. Only stones graded I have flaws you can see with the naked eye.

Before you buy anything, visit a few stores and look at stones to see what differences in the four Cs look like to your eye. Even buyers who have no intention of buying at Tiffany's often stop there because the education you receive is excellent.

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Paperwork is key
The best diamonds come with papers. According to Richard Tilles, founder and president of SellJewelry and SellJewelry.com, the Gemological Institute of America is one of very few labortories that people in the industry put stock in.

If the GIA says a stone is 1.35 carat round, G color, VS1 clarity, it is. But many of the jewels at Sam's, Wal-Mart and the other mass-market retailers come with paperwork from the International Gemological Institute — or IGI — instead. What are these worth? According to Tilles, not that much. "It doesn't have any credibility in the trade," he says. "Most diamond dealers will look at a diamond graded from the IGI and determine for themselves what they think it is," he said.

IGI president Jerry Ehrenwald defended the IGI's ratings. We guarantee our diamonds to the GIA system," he said. "If someone disagrees with one or our grades, we are always willing to give it to the GIA to make sure we're in agreement. All of our gemologists are graduate gemologists, but we don't rely on one opinion alone."

The value on the certificate is often inflated. One big difference between the IGI certificates and those from the GIA is that the IGI attaches a value. You're supposed to take that value to your insurer and cover your diamond for that amount. But the values are often higher than they should be. One Sam's Club five-stone ring came with IGI papers that put its value at $4,250. The store was selling it for $2,600.

Your risk in insuring it for the higher value is that if it's lost or stolen, your insurer can opt to replace it rather than give you the money. That means they could go back to Sam's and buy a $2,600 ring — after you've been paying premiums on a $4,250 ring. You end up losing. Ehrenwald, however, advises anyone who pays less than the retail replacement value for a piece of jewelry to give both the sales receipt and the valuation papers to their insurer. "That way everyone is covered," he said. "You won't be overpaying for your insurance, but if your diamond is lost or stolen, you'll get an accurate replacement."

Where you buy factors heavily into the priceMark-ups can go as high as 100 percent, Tilles says. In that range, you get some stores that mark-up way over 100 percent and others that don't mark up nearly that much.

Lisa Soloman of Sam's Club said that one reason they're able to sell diamonds for less than other retailers is that they "make their money on membership." Internet retailers that don't have bricks and mortar to pay for can often pass along similar savings.

The bottom line, with a diamond — as with any purchase — is that you should do your very best to understand what you're buying and what you should be paying for. As Tilles notes, "You should love it and love wearing it because jewelry is not a very good investment."Jean Chatzky is an editor-at-large at Money magazine and serves as AOL's official Money Coach. She is the personal finance editor for NBC's "Today" show and is also a columnist for Life magazine. She is the author of four books, including 2004's "Pay it Down! From Debt to Wealth on $10 a Day" (Portfolio). To find out more, visit her Web site, .