The True Cost of Upgrading Your Phone

[EastWest Gal]

We bought iPhones in 2011, for DS’s birthday. Before that I had a blackberry and DS had a flip phone. He was away at college and his phone was always off. We came to visit for family weekend and had to throw objects at his dorm window to get his attention.

The iPhones honestly made a huge difference in our communication. We get new ones when the old ones develop functional issues. DS and I have 12, DH has a 7. Since the phones function as the entire internet, GPS, communication devices with family and friends around the world, they are very valuable. We usually get 3-5 years out of a phone, minimum.

 

[googily]

I am awaiting my Pixel 6, which I will trade in my Pixel 5 for (and hopefully get close to $300 trade-in for). This is in my Blow That Dough category, because there is probably no item I use more than my phone. I can do a fair amount of work from it, I message or video call friends and family from it, I take pictures with it, I listen to podcasts with it, I use it in my car to navigate on road trips and dictate messages, and I can lay in bed and read and reply on message boards, like I am doing right now. And that just scratches the surface.

I'm sure those of you who have little or no use for the latest and greatest tech have some sort of hobby or interest that includes buying things that I can't possibly understand why you'd want to spend your money on them. Like, say, Teslas!

I have the money and my bigger concern is dying before spending a big chunk of my nest egg, so now I buy a new phone every year.

People without a ton of money who still spend $1k on new iPhones would probably be spending it on something else if phones didn't exist.

 

[ShokWaveRider]

I am not part of the Apple following congregation, they are to restrictive for my liking (a Born Techie). However, when w*rking I was issued a 4 ​that I finally gave to my DW when I retired (Phones were issued to us to keep) and upgraded to a Samsung Android Phone. IMHO it was one of the last "sensibly" sized modern phone made and did the job.

The 4 crapped out and I purchased her a similarly sized unlocked 5S from FleaBay DW still has it, yes it is working fine, I did have to put a new battery in it a year ago. Other than that it is still going strong and still fits in a "Normal" shirt pocket. She does not like the new ones and will most likely move to Android when needed, I will cross that bridge later and get her a sensibly sized Android phone when needed.

I am happy with my "Open" Samsung S7. I have lots of Apps that are not from the AppStore, some years old, which could not be installed on the Apple. I also use it to "Talk" to MS Windows via standard Microsoft Explorer and File Managing utilities. The main reason I prefer Android over iOS. No special apps required to transfer files back and forth. MMDV

 

[disneysteve]

I accept the challenge.

Surely a less expensive smartphone is an even better value.

That's a fair point. Yes, I could get a cheaper phone that does all the same things, but that's not entirely the topic here. It was more about spending on a phone vs. investing for the future, and also about upgrading frequently.


I have an iPhone 7. I think they are on 13 now so I'm multiple generations behind. We don't upgrade every time something new comes out. We keep our phones until they die. If I spend $1,000 once every 5 or 6 years, I don't think that will derail our long term financial success. We spend far more than that eating out or going on vacation.

 

[Chuckanut]

I am repeatedly amazed by what people spend on mobile phones - not just the device, but monthly plans.

I've never spent more than $200 on a phone. My monthly plan is $8.

Can you share the plan details?

 

[GTFan]

Meh, there's smart way to upgrade. Last 3 upgrades have been at no cost. Well, ok, just tax. Tmobile has had upgrade offers where you get phone for free after bill credits spread over 24 months. The cost of the phone is also spread over 24 months, so net zero other than tax paid at purchase. Also did an upgrade and paid off phone, then sold phone and put money in my pocket. I continue to get credits so will net to zero for cost and I make money. So overall I'm net with profit after all my upgrades. [emoji41]

Free phone sure, but you pay way more for monthly service than with something like Mint for $15/mo. They get your money one way or the other.

I've said this in other phone threads - get a year or two old new(ish) flagship phone for 50% or more off of retail, keep it until it starts flaking out. Then BYOD to a cheap plan.

 

[GTFan]

True. My iPhone is far and away the most useful and versatile item I've ever owned. It is an amazing resource. It allows me to stay connected with friends around the world, get directions, order food, shop, take photos and videos and share them with others, track my finances and make transactions, make bank deposits, sell on Marketplace and ebay, play games, watch TV shows and movies, check the weather forecast, get the latest news, listen to music and podcasts, save money in various ways, keep track of my work schedule, book travel, track my exercise routine, scan and quickly pay while grocery shopping, attend our bi-weekly staff meetings, browse real estate listings in Florida, and so many more things.

$1,000 for a pocket size device that does all of that? I challenge anyone to show me a better bargain.

Any modern phone does all that, and plenty of them are $300 or less. You don't have to spend $1000 every few years, doesn't matter if it's iPhone or Android.

I agree that it's cheap money spread out over time, but the point is that phones are so good now you don't have to buy a current flagship at MSRP. Ever.

 

[mrfeh]

Can you share the plan details?

telllo.com

Without checking, I think it's 100 minutes talk, 500 MB data and unlimited texts.

My phone has wifi access 99% of the time so I don't need much data.

 

[brett]

My four year old unlocked Moto was purchased new for $110. Works fine, no upgrade plans.

If I wanted the Apple 13 I would buy it. And any plan I wanted to go with it.

It is all about choices. Really, one could decide not to buy any clothes for a few years, not pay the cost for a hot water heater, or internet service. Whatever.

Sure the savings could be calculated, as could the lost 'opportunity cost' to the monies that would otherwise be spent on those items and others.

Think of all the money spent and the lost 'opportunity cost' if you stopped living and moved into a cardboard box below an underpass.

 

[aja8888]

DW has an iPhone 6S bought used a few years ago for $400 off SWAPPA. Still works like new and it's on all day (I have no idea what she is doing with it, but texts from the daughters and granddaughter are part of that). When it "goes", we will hop back on SWAPPA and find another one or two year old turn in iPhone that's in mint condition and buy it.

Me, Motorola G Power, bought new in 10/20 for $175.00 off Amazon. Does everything I need and battery is good for three days, normal use.

Service is Cricket (AT&T), 4 lines $100/month, unlimited everything. The other two lines are me paying for DD and her husband.

All these phones have value for the users and it depends on what you want to get out of them.

 

[finnski1]

I accept the challenge.

Surely a less expensive smartphone is an even better value. I can afford a $1000 phone but I do not see the value proposition. Our Pixels are fantastic and very highly rated at way under half the price. They do everything you listed and have fantastic cameras .

And as an aside if you buy the insurance on these phones, that is an exceedingly poor value in my view.

I accept as well. My phone does all those things as well and cost me $120. That $120 also included a years worth of text and minutes. It is a motorola moto g7 optimo maxx and has been great. Never been an Apple fanatic and still believe, even though they do make great phones, that their best product is their marketing.

 

[HF63]

At home, whenever my son's gets a new phone, members of the family get an upgrade.


I just got an I phone 10x, my mom will be getting my 6 and her helper will finally moved from the Galaxy 2 that used to be my son's first phone. The cost is just a new battery. The Galaxy still works so the lady will probably give it to a relative.



We have lots of winners during an upgrade.

 

[Ready]

I frequently upgrade my Apple products to the latest version because I enjoy them. If I was struggling financially I would not do so. But at this point in my life I’m more concerned about leaving a large sum of money on the table when I’m no longer around, so there is no reason to deny myself the enjoyment of having the latest technology. If I didn’t enjoy it, I would not spend the money on it.

 

[finnski1]

At home, whenever my son's gets a new phone, members of the family get an upgrade.


I just got an I phone 10x, my mom will be getting my 6 and her helper will finally moved from the Galaxy 2 that used to be my son's first phone. The cost is just a new battery. The Galaxy still works so the lady will probably give it to a relative.



We have lots of winners during an upgrade.

That's a great way to look at it. Sounds like a win-win-win situation.

 

[Montecfo]

Any modern phone does all that, and plenty of them are $300 or less. You don't have to spend $1000 every few years, doesn't matter if it's iPhone or Android.

I agree that it's cheap money spread out over time, but the point is that phones are so good now you don't have to buy a current flagship at MSRP. Ever.

exactly right.

 

[aaronc879]

The rule of 72 says at the historic 10% average return it will take 7.2 years to double your money. So how do they figure $1000 grows to $17,000 in 30 years? Shouldn't it only be around half that much?

The Android I bought on sale for $50(marked down from $150 on Black Friday) does everything I need it to do. A $1000 iPhone would be a massive waste of money. So would a $80/mo phone plan. I use Tracfone and spend $125/yr for a year of service and more than enough minutes and texts. I may add $20-30 worth of addition data during the year but that's still under $15/mo average.

 

[finnski1]

The rule of 72 says at the historic 10% average return it will take 7.2 years to double your money. So how do they figure $1000 grows to $17,000 in 30 years? Shouldn't it only be around half that much?

The Android I bought on sale for $50(marked down from $150 on Black Friday) does everything I need it to do. A $1000 iPhone would be a massive waste of money. So would a $80/mo phone plan. I use Tracfone and spend $125/yr for a year of service and more than enough minutes and texts. I may add $20-30 worth of addition data during the year but that's still under $15/mo average.

No they said 30 years. By your example it would be more like $19,800 after 30 years so sounds about right to me.

year 7.2 double to $2000
year 14.4 doubles again to $4000
year 21.6 doubles again to $8000
year 28.8 doubles again to $16000
year 30 comes out to $19800 or so by my calculations.

My tracfone deals comes out about the same as yours and I agree with you completely on those points.

 

[Sojourner]

I frequently upgrade my Apple products to the latest version because I enjoy them. If I was struggling financially I would not do so.

IMHO, this is really what the article was about. People who can't scrape together enough cash to cover a fairly large, unexpected expense—like a $500 car repair—should not be spending $1,000 on a brand new iPhone every few years. And, as we all know, there are a lot of people out there like that. For most folks here at e-r.org, this doesn't apply, so if we want to "blow that dough" on new iPhones, no harm done. Once you've reached a certain level of financial/retirement security, life shouldn't always just be about adding another $X,000 to the pile.

Personally, I buy a new iPhone roughly every five years. I'll be replacing my 7 with the 13 Pro next month, which will set me back about $1,100. Paying that much for a phone (actually, a miniature, portable supercomputer) is a bit painful to think about, but it's a relatively minor expense in the grand scheme of things. I think $18/month is a pretty reasonable cost given what a new, state-of-the-art smartphone can do.

 

[Ed_The_Gypsy]

I'd be far wealthier if I had stayed single and childless.

Me too. But I would have been dead long ago. [emoji16]

 

[aja8888]

Me too. But I would have been dead long ago. [emoji16]

I don't know if I would have been any wealthier, but I sure would have been dead by now!

 

[aaronc879]

I'd be far wealthier if I had stayed single and childless.

It depends on the person you marry. I could be far better off if I married a woman with a good career.
Kids don't have to be very expensive at all. Some people don't lose any money on kids after factoring in the significant tax credits given these days.

 

[kcowan]

Kids, houses, divorces. Yea let's talk about really big expenses. I have considered cell phones a cost of doing business since 1989.

Now if people have one only for special purposes, they are misssing out. Reminds me of my brother saying he could do everything on the dial phone and refused my old laptop.

 

[F.I.R.E User]

I had an iPhone 5S for about 5 years and people made fun of me and were aggressive to me so I could get the latest model. LOL.

 

[aaronc879]

I had an iPhone 5S for about 5 years and people made fun of me and were aggressive to me so I could get the latest model. LOL.

You are around the wrong people. If anyone made fun of me for the phone I have then they would not be around me anymore.

 

[finnski1]

You are around the wrong people. If anyone made fun of me for the phone I have then they would not be around me anymore.

^+1