Do you have any advice on how much to spend and on what kind of diamond?

As a rule of thumb two months salary is standard, however more or less is also fine for an engagement ring diamond.

Ever since I started the business I had my own ideas on how a diamond should look, to qualify for jewellery:
Colour: a diamond should be more than just white but not necessarily D colour (the best blue white). Anything between the colours 'E' (Exceptional white) and to 'H' (white) is to be considered, E (Exceptional white) ,F (Very very white) ,G (rare white) ,H (white) and even I (slightly off-white)  are all considered very white and once set in a ring, one is hard to tell from the other
Clarity: a diamond should be far better than just eye-clean but should not necessarily be Internally Flawless.  In my view, it is more the nature of the inclusion, than the degree of inclusion that is important. I would for example prefer a white VS2 with an inclusion on the side of the stone, to a more expensive VS1, that has a black spot right in the centre, the very heart of the diamond.
Cut: a diamond should be cut in Antwerp where you can find the best craftsmanship on the market : It's the cut that makes a diamond sparkle!
The setting: the choice of platinum, white or yellow gold is yours and should be based on your personal preference as well as matching your other jewellery.

Regardless of your preference in colour, clarity, size, or budget: Cut comes first.  It is the cut that brings a diamond to life, that gives it its sparkle, its brilliance, its fire. No concessions there. A diamond should be cut within certain proportions, angles and percentages, to obtain the highest grades on certificates.

For further information see Diamonds Glossary.