Many of my friends feel compelled to own the latest and greatest phone (usually the iPhone) as soon as it hits the market. Every time a new model is advertised, they are the first in line to hand over the big bucks for the phone upgrade.

I’ve never been in that line. My lifestyle allows me to wait until my phone is exhibiting signs of failure before I shell out the big bucks for a new one. However, when I’ve reached that time, I have usually purchased the latest available model.

When I last needed to replace my phone, I expected to purchase a nice popular new phone for the discount price of around $200, along with a new 2 year contract with my phone carrier.

Once I arrived at the phone store, I learned that the carrier had changed their system to one that didn’t include contracts. Instead, they lease your phone to you at the full price with a 2-year payment contract.  At the end of the contract the phone becomes yours to keep. At the end of the 2-year term, I will have paid them nearly $700 for my phone.  As long as I don’t run down to the phone store for a new upgraded model, my phone bill will drop by $27 per month.

I look back at the decision to enter that agreement with a fair amount of regret. I realized that I don’t need the latest and greatest phone. I would have survived very comfortably with an earlier model which I could have picked up on Amazon or another source for much less. In fact, today, I could purchase the exact phone I currently have for $250, just over a year after I originally acquired it.

What benefit will I receive for spending top dollar on the new phone upgrade?

I don’t know why you may have purchased new phones.  For me, it’s usually because of the camera, speed, and battery life.

I like having a good camera on my phone because it’s my only camera, and I always have it with me. Even if I had a nice fancy camera, I wouldn’t likely carry it with me everywhere I go.  I’m probably not going to have an extra camera in my pocket or in a case around my neck when I come across a situation or subject that is worthy of photographing.

I’m frequently with my grandchildren, and I like to travel, hike, and see new things. Nearly every day, I’m glad that I have a good camera on my phone.  It’s important to me that when a Kodak moment presents itself, I’m prepared. The camera on the phone offers the best preparation for that I can think of.

Every year, cameras on phones are becoming more sophisticated and powerful than before. I’m able to adjust many of the settings on my phone’s camera very similar to a DSLR. I can get good photos in conditions that may not have been available before and I can create effects that I may not have previously.

Besides the camera, I have found that after time, the phone slows significantly due to apps and downloads. I can spend significant amounts of time cleaning and deleting, but that never seems to bring the phone back to its original speed. It’s so much better to have a phone with more memory and faster processing speeds.

Finally, there is battery life to deal with. The more things a phone will do, the more battery life comes into play. Some of the newer phones have placed emphasis on technology that extends battery life.

Is there an earlier (and cheaper) model that will fulfill my phone needs?

Truthfully, the phone that I replaced was very adequate for what I do with a phone.  I replaced it because the charging port was beginning to malfunction.  Everything else about the phone was great.  It had a good camera and I really liked using it.  I received many compliments about the quality of the photos I took with my phone.

Two new updated models had come out after the phone I was replacing.  I could have purchased a one-model upgrade for about $200 instead of getting the two-model upgrade for $700.  I bet I would have barely noticed any difference from the newer model that I purchased.

What could I do instead with the extra $500 premium that I’m about to blow on an upgrade to an amazing new phone?

Since I’m in the process of paying down debt, I likely would have used it for that.  Finding an extra $500 to pay toward $50,000 of debt doesn’t sound like much, but every little bit helps.  We paid our debt down from $105,000 to where we are today by finding a few hundred dollars here and there to add to the snowball.  By the way, using that $500 as an additional payment on your credit card that carries a 15% interest rate would save you an additional $75 in interest over the next year.

I could have purchased a round-trip airline ticket to visit my brother who lives across the US from where I live.  I only see him about once every 2-3 years, and would love a chance to get over there to see him again.  I’ll go see my brother again next year when I’m out of debt and I can pay cash for the airline tickets.

I could have added the money into my Stash account.  The past year has been especially good for equity investments.  I would have seen a nice increase in my investment during that time.

I could have paid for a year of fees for a fitness club membership.  I considered getting a membership, once, but decided that I would rather spend those membership fees on a bicycle, instead.  Then I paid down debt with the money instead of buying the bicycle.

The latest phone model is a “want”, not a “need”.

If you are honest with yourself, you will agree that it’s really cool have have the latest and greatest, but realistically, it makes perfect sense to scale it back.  Delay the purchase a year, or buy the previous year’s model.  You’ll be money ahead.