Is That New Smartphone a Smart Thing to Buy?
October 10th, 2011
We’ve all been there. We sign up for a new $99 per month calling plan to get that flashy Smartphone with all the latest features, and then we get a bill for $140 once all the fees, taxes, and usage charges are added.
That is $40 not available for other necessities, $40 that may have been needed for the car payment. Without more transparency from vendors, how do we save money to create a six-week to three-month financial cushion since we don’t know how much things will actually cost?
Reading the fine print in any contract can help. While looking at that beautiful new Smartphone, it can be easy to visualize how much our lives will be “improved” by having it. How much simpler everything will be when we can check our email from the bus stop, read a favorite blog on a break from work, or check the calendar when planning a party. Not to mention how good that Smartphone looks and feels! This dreamy, wonderful part of the buying experience is to be savored and enjoyed.
But… before signing the contract, all of us need to start putting our collective feet firmly on the ground, know that we are in control of these decisions, and understand how a new luxury item will affect our financial lives. For instance, what are the data usage charges? How much music can be downloaded in a month before we need to stop paying the electric bill to afford it? Then there are the more personal questions to ask: “Do I need this added luxury in life right now, or can I save money for six months and buy the even more sleek and fast Smartphone next year?” More importantly, “Will this item really make me happy? More happy than $140 worth of heat in winter or movies with my kids?”
The same questions could be asked about cable or satellite programming – Do we really need thirty movie channels? How about two or three different subscriptions to online television and movie streaming?
The other place where spending is hard to quantify is with cash. A nonfat macchiato with a double shot may cost $4, which feels insignificant when we hand over the cash each morning. Add it up over a year though, and daily gourmet coffee can cost up to $1,200 a year. Hmmm…. gourmet coffee or the 46” LED television? Or more responsibly, gourmet coffee or an extra mortgage payment?
In these financially uncertain times, we all need some luxury, some fun, some time to live in the moment, free of financial worries. The question isn’t about choosing whether or not to enjoy luxury items, it is about understanding the true cost of luxury and choosing which luxury will give us the most joy.
