Continuing with the trade-off and affordability theme of the last couple weeks (click here for the housing example), today, I’ll cover trade-offs and affordability of electronic devices. Smartphones, tablets, laptops, televisions, Bluetooth speakers and headphones, and ‘Smart’ devices are becoming everyday life for many of us. But we should ask ourselves a couple of questions:
How many devices do we need?
And how often do we need to replace or upgrade them?
For us as a family, even though we have a bunch of devices, we almost exclusively buy devices on the cheaper side, but we take care of them and make them last. We have two laptops, two Kindle Fires, three smartphones, a Roku, a Fire Stick, and one television. I’m probably forgetting a few things, but it is a lot when you list all of them together. Our second laptop was purchased in the event of more ‘remote learning’ this fall, and one of the phones is an older phone that we use to stream music when we are home.
Adding up the cost of our devices
We save significantly on our devices by keeping them for longer, buying them on sale, buying less expensive, or a combination of all three. Here are the ages of our devices and the prices we paid for them:
Smartphones – two are two years old ($150 each) and one is four years old ($250)
Kindle Fires – three years old ($50) and almost 1 year old (a present)
Laptops – one is new ($220) and one is three years old ($730)
Roku – four years old ($35)
Fire Stick – three years old (a present)
Television – eight years old ($350)
For all of our devices, we paid a total of $1,935, which seems like a lot, but if you take step back, that’s less than what it would cost to replace just our smartphones with two new iPhone 12 Pro Max 5G smartphones, currently priced at $1099.99 each, and that’s before you add in taxes, which would tack on another $150.
The Trade-Offs
Electronics have become an essential part of our daily lives, but none of us have to buy the newest, most expensive devices out there. Nor do we have to upgrade them frequently. You have options to get the electronics you need, without paying a ton of money for them. There are price ranges for every type of device. You can buy quality smartphones for under $100, or you could pay upwards of $2,000 for the newest smartphone with the newest features. If you are in the Apple ecosystem, you will pay more for your devices because Apple products generally cost more. Below is a table showing a wide range of smartphones that are available for all of us to buy. The less expensive phones may not have all the bells and whistles of the new phones, but they are plenty capable and will last at least 18-24 months.
| Smartphone | Cost |
| Samsung Galaxy Note20 | $1,199,99 |
| Apple iPhone 12 | $849.99 |
| Google Pixel 5 | $649.99 |
| Apple iPhone SE | $399.99 |
| Motorola Moto G | $99.99 |
| LG K31 | $84.99 |
How much is your phone worth to you?
When it comes to electronics, you probably don’t need the latest and greatest devices. Additionally, if you aren’t currently saving for retirement, you really shouldn’t be buying the latest and greatest devices. What would happen if you get a cheaper smartphone and save the difference for retirement? Let’s go over one example for a smartphone. For our example, let’s say you’re planning on getting a new iPhone 12 for $850. What would happen if you decided to get an iPhone SE for $400 instead, and saved the $450 difference? What if you repeatedly bought a cheaper phone whenever you were going to purchase a new phone? I imagine that smartphones will likely stay part of our lives, well forever, so if you use this savings for 20 years (10 smartphone replacements), you would have over $10,000 extra saved for retirement. If you do this for 30 years, you’ll end up with over $23,000 more.
Wrapping Up
Now, I’m not saying you should completely write-off buying top of the line items, but you should consider alternatives to buying a very expensive phone, laptop, tablet, television, or anything else. The example above, while still allowing you to buy an iPhone, could significantly add to your nest egg over the years. Imagine applying this to other major purchases, like travel, cars, furniture, jewelry, luxury items, etc.
Being conscious of the trade-offs your purchases have could help you change the trajectory of your current and future financial situation, but you have to choose which trade-offs you want to make.
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Great advice. I wish I’d had that direction at a younger age.