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forget the $She'll LOVE whatever you pick, trust me.
All of our budgets are relative anyway
Tiffany's has a healthy mark up, that's why I said $5k isn't all the much there. You can get the same quality elsewhere for less which means a bigger stone for the same $.
I'd go for a solitaire. A solitaire is great because if a girl doesn't like something about a ring, it'll be the setting. A solitaire pretty much guarantees happiness, you can't go wrong in my opinion.
Now, you seem old fashioned-ish. . . what if you got her the solitaire and for the wedding you let her choose her wedding band/setting to change it to?
My DH and I are pretty old fashioned - same age as well, and we did this. It was great!
Now you just need to decide on shape!
If she's not trendy I'd stay w/ basic shapes, round is always popular. I have round, I had princess before, but round now. Asscher is also really beautiful.
Things to remember, cut is KING. If you find an ideal/excellent cut stone you can afford to go lower in color.
For example, you could get a 1.10crt H COLOR stone if it's an excellent cut instead of a .96 F COLOR.
It's okay to go to SI1 in clarity because these stones ARE eye clean, neither of you will see problems in an SI1.