For the longest time, I considered smartphones as just toys of sorts, but I’ve finally seen the light. They’re a necessity, just like your car, home internet, or any other expense—and you should budget for upgrades accordingly.
You probably play games on your smartphone and use it to browse social media or watch YouTube videos, but those are really just secondary features. Think about all the tasks that you perform on your phone that are actually kind of important.
You use it to call and text family and friends to stay in touch. You use the camera to take pictures of your kids or pets to have lasting memories. You may even use your phone partially for work purposes—and no matter how you might feel about your phone potentially keeping you connected to the office, it’s a really useful tool.
Hell, your phone might be your only way to get online if you don’t also have a computer, which is actually becoming more common than you might think.
Depending on how you use your phone, it might possibly be one of your most important possessions, so it’s time to start actually seeing it as such.
I try to live a frugal life (and sometimes fail miserably at it), but I have a monthly budget, and in that budget I assign a certain percentage of my paycheck only toward things that I absolutely need to pay for, either regularly (mortgage, bills, subscriptions, etc.) or at some point in the future (car repairs, home improvements, etc.).
I simply leave out things that aren’t needed, like eating out, going to the movies, etc. Instead, whatever is left over after accounting for necessary expenses is earmarked as discretionary money that I can spend on whatever I want. And if that runs out, then I just don’t get to eat out anymore.
For the longest time, smartphone upgrades have always sat in that discretionary category. Furthermore, I’ve always thought of upgrading my smartphone as just something that would come along whenever I had the spare cash to do so—I never really had a financial plan in place for when my current phone either broke or just became so old that it was no longer usable.
In other words, I have a financial plan in place for when my car breaks down or I’ll need to buy a new one, so why not have a similar plan for my smartphone? I work from home and use my smartphone more times per day than my car, so why put such little emphasis on the importance of the phone?
Now, I’m not saying that you should go out and buy the latest and greatest smartphone every single year when a new one comes out—not everyone needs or can afford to buy flagship phone after flagship phone.
What I am saying, though, is that your current smartphone will crap out at some point and new technology is constantly improving, so do you have money set aside for a new phone to replace it or upgrade it when that time comes? If not, you should start budgeting today for the future day when your phone ends up biting it on the floor of a parking deck or you want the latest and greatest smartphone camera to record 4K baby videos.
How should you do this? How you budget and allocate your money is up to you, but here are some pretty straightforward ways to approach smartphone budgeting:
- The best and simplest thing to do is put away a certain amount of money every month into a savings account. The amount will depend on how much you want to spend on a new phone and how often you plan on upgrading. So if you want to stick to a $500 limit for a used phone every two years, you’ll want to save about $21 every month. Obviously, if you want to buy brand new models, you’ll spend more, so you’ll need to put back a bit more money every month. You get the gist.
- Take advantage of a good 0% financing deal. This is actually what I did when I decided to upgrade to the iPhone Xs from the iPhone 6s. But of course, there’s nothing quite as simple and stress-free as already having the money to pay for a new phone up front and not worry about making payments. If you’re using a 0% deal, make sure the payments line up with what you would have saved that month for a phone anyway.
- Sign up for an upgrade program. Most major carriers offer some sort of upgrade program, as does Apple. You’re technically financing, but you pay a monthly fee and you get to upgrade to the new iPhone (or whatever new phone comes out) every year as long as you turn in your old device. They typically cost a little bit more than a straight 0% financing deal on account of bundled AppleCare or other insurance.
If you do end up going the 0% financing route, you can do what I’m planning to do and pay off your phone in 18 months (or however long the term is), but continue to save that monthly payment in your savings account. Then, in another 18 months, you’ll have the money to upgrade phones again without having to deal with banks and financing. Plus, it’ll save you from getting a hard pull on your credit report.
Of course, come up with whatever plan you’re most comfortable with. The real point here is: treat your smartphone like an investment in better photos, a smoother experience, and access to the newest technology and repare yourself financially for when that time comes where you’ll need to upgrade phones. Put a personal plan in place now so when your phone bites it or you desperately want a phone that doesn’t feel like an old potato, you’ve got a spot right in the budgt for it.