Smartphone Upgrades That Make Financial Sense
Every year seems to bring new smartphones with faster processors, better cameras and exciting new features. While the latest release can be hard to resist, upgrading just because a newer version is available may not always be the best move for your wallet.
A thoughtful replacement strategy can help you get the most out of your mobile device while keeping more money on hand for other financial priorities. Before jumping on the latest model, take a closer look at the true costs and whether an upgrade is really necessary.
Repair vs. Replace
If your phone has a cracked screen, weak battery or another common problem,
fixing it may be much less expensive than buying a new device. Battery replacements and screen repairs can sometimes extend a phone’s life by several years.
On the other hand, replacement may make more sense if repair costs are high, multiple components are failing or the manufacturer no longer provides software or security updates. Compare the total repair cost with the price of a new phone before making a final decision.
Beyond Monthly Payments
Many wireless carriers and retailers advertise new phones for what often seems like a small monthly payment. While these offers can make an upgrade feel more affordable, it’s important to look at the total amount you’ll pay over the life of the agreement. For example, a $30 monthly payment over 36 months adds up to $1,080 in total.
Apple recently introduced a leasing program for its devices where customers make monthly payments and eventually have the option to upgrade to a new model, return the device or buy it. Leasing can help make a new phone more affordable in the short term, though you should check the terms carefully to understand the total cost, any end-of-lease obligations and how the program fits your overall budget.
Also check whether, or how long, you’re required to stay with a particular carrier or service plan. In some cases, paying for a phone over several years could reduce your flexibility if you later want to change providers or plans, or at least confine you to that carrier until the phone can be “unlocked” and used with a different provider.
Make the Most of Trade-in Offers
If you decide it’s time for a new phone, don’t overlook the value of your current one. Many manufacturers, wireless carriers and retailers offer trade-in programs that can significantly lower the purchase price of a replacement.
Compare offers before accepting the first one you receive. Trade-in value can vary depending on the phone’s condition, age and storage capacity, as well as on the company making the offer. Even if a trade-in isn’t available, selling a well-maintained phone privately may fetch a higher price.
Get More Years out of Your Device
A few simple habits may help your smartphone last longer and delay the need for a replacement altogether:
- Using a sturdy case and screen protector can reduce the risk of costly damage.- Keeping storage space available, installing software updates and replacing an aging battery when appropriate can improve performance.
- Avoiding excessive heat and charging practices that place unnecessary stress on the battery can also help preserve your phone’s lifespan.
Consider Tradeoffs
Every major purchase involves tradeoffs. The money spent upgrading a phone today is money that won’t be available for other financial goals, such as building an emergency fund, paying down debt or increasing retirement savings.
That doesn’t mean you should never upgrade. If your phone is unreliable, no longer receives security updates or limits your ability to work or communicate effectively, replacing it could be a practical investment. The key is making the decision based on your needs rather than the excitement around a new product launch.
Keep Your Financial Goals in Focus
Technology will keep improving, and eventually every smartphone will need to be replaced. Taking time to compare costs, evaluate financing options, explore trade-in opportunities and care for your current phone can help you time your switchover in a way that better aligns with your overall needs. If you’re weighing this purchase alongside other priorities, a Financial Professional can help you determine how it fits into your broader financial plan.
Source
https://www.zdnet.com/article/how-long-should-you-keep-your-phone-for/