Apple’s recent announcement of the new iPhone 13 is one of several new technical articles recently announced or launched. The Google Pixel 6 and Samsung Galaxy S22 are two other phones that you might want to keep an eye on. In addition to new phones, there are plenty of laptops, televisions, portable items, and other technology that are sure to be on many Christmas shopping lists. If you or someone you love is a tech geek, there are a few things you should think about in your new tech budget.
Most technology articles are depreciable assets
The first thing to remember is that most technology items are depreciable assets. This means that it will lose value over time. To like buy a new car, most technical items will never be worth more than when they were first sold. Just as you could lose a third of the value of your new car the moment you step out of the parking lot, your new phone can lose a third of its value the moment you leave the Verizon or Apple stores.
A new phone
Technological advancement in cellphone technology has been near exponential since the introduction of the original iPhone in June 2007. Every year the phone manufacturers seem to be developing additional features. Larger and livelier screens, larger and more precise cameras and faster processors are just a few of the changes announced each year.
While a new phone today is undoubtedly a lot better than the original iPhone from 2007, these innovations come at a price. The new iPhone 13 has a suggested retail price of $ 699 to $ 1,399, depending on the model. And that assumes that you can actually buy an iPhone at retail price, given the global chip scarcity that is affecting supply chains.
Other new gadgets
Cell phones aren’t the only new devices that a lot of people are interested in. New laptops, tablets, televisions, and portable technology are other things that will have the greatest value they will ever have when they hit the market. If you want to be up to date and always on the cutting edge of technology, then you definitely pay a premium.
Budgeting for New Technologies
Does the fact that most new tech gadgets are depreciating in value mean that you should never buy them? As with most personal financial decisions, the answer is that it depends on your specific situation. Remember the whole thing Point of a budget is not spending money on things that are not important to you so that you still have money for the things that are important to you.
If new gadgets are really bringing joy to your life, be sure to get every newest gadget as soon as it comes out. Just make sure you include it in your budget so it doesn’t ruin the rest of your financial picture. A sinking fund This can be a great way to do this, especially for items that are advertised well in advance of the date they will be available for purchase. If you want to budget $ 1000 on a new phone every year, set up your sinking fund to save $ 83 every month. Then by the time you’re ready for your new phone, you have the $ 1000 you need.
Alternatives to always buy the latest technology
If you’ve decided not to buy the latest version of a particular gadget, here are some alternatives. The easiest thing to do is to take a look at last year’s model. Anyone who wants the version that has just been released will try to sell their previous year’s version. That will lower the resale price and you can potentially get a relative bargain.
Another alternative is to wait a few months. Companies like Apple, Google, and Samsung know that there is a huge market out there looking for the latest product models. They also know that these people are willing to pay anything to get them asap. After a few months it is common for the price to drop between 25 and 50%.
The bottom line
New technologies and gadgets will continue to hit the market at a remarkable rate each year. But just because a new version comes out doesn’t mean you have to be the first to buy it. Remember that most technological devices (including cell phones) write off assets – they depreciate over time. However, if the latest technology is important to you, allow this into your budget. A sinking fund or other high yield savings account is a good place to start saving your money.
Dan Miller (84 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a website that helps families travel for free / cheaply. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.