Beautiful Virgin Islands

Wednesday, Aug 27, 2025

The True Cost of Upgrading Your Phone

The True Cost of Upgrading Your Phone

Tim Cook, Apple’s CEO, once compared buying an iPhone for $1,000 to buying a cup of coffee a day over a year. No big deal, right? But financial advisers see this differently. By some estimates, an investment of $1,000 in a retirement account today would balloon to about $17,000 in 30 years.
In other words, $700 to $1,000 — the price range of modern smartphones — is a big purchase. Fewer than half of American adults have enough savings set aside to cover three months of emergency expenses, according to the Pew Research Center. Yet one in five people surveyed by the financial website WalletHub thought a new phone was worth going into debt for.

Tech companies fairly argue that our smartphones are our most powerful tools for work and play and thus worth every penny. But they also play numbers games to downplay the costs of a new phone. Samsung, for example, has said the price of its new Galaxy phone is $200 — but that’s only if you trade in a year-old phone for credit toward the new one. The true price is $800.

So it’s worth looking at phone upgrades in a different light to weigh their financial impact. That can help us make well-considered decisions so that the move isn’t automatic.

The irony of Mr. Cook’s coffee analogy isn’t lost on Suze Orman, the financial adviser who once famously equated people’s coffee habits to “peeing $1 million down the drain.” The seemingly small amount of money that people mindlessly spend on java — and now phone upgrades — could be a path to poverty, she said.

“Do you need a new one every single year?” asked Ms. Orman, who hosts the “Women and Money” podcast. “Absolutely not. It’s just a ridiculous waste of money.”

Apple and Samsung didn’t immediately respond to requests for comment.

So what’s the true cost of a phone upgrade? Let’s look at the math.

Flipsy, a company that buys and sells used phones, published an analysis this year arguing that it’s smart to buy a new iPhone every year. Here was its breakdown:

* The iPhone 12 cost $799 last year. It’s now worth $460 if you trade it in to defray the cost of a new phone. The newest iPhones, the iPhone 13, also cost $799. So if you traded in your iPhone 12, the iPhone 13 would cost $339. At this rate, if you bought an iPhone every year for four years, including the original $799, the net total would be $1,816.

* If you waited three years for the iPhone 15, your iPhone 12’s trade-in value would diminish to about $200. Trade it in and the cost of the iPhone 13 would be $599. Add in the original $799 and your net cost over four years would be $1,398.

In summary, upgrading annually over three years costs $418 more, or roughly $12 a month, compared with upgrading every three years, Flipsy said.

Framed this way, it may sound like a bargain to get a new phone every year as opposed to every few years. But plugging these numbers into a financial calculator tells a different story.

If you put $12 a month into a retirement account, like a Roth I.R.A. that has an average annual rate of return of 10 percent, that amount would turn into $25,161 over 30 years, according to Ms. Orman’s savings calculator.

Ms. Orman compared the trade-in dilemma to buying cars. Car manufacturers could argue that the diminishing trade-in value of your car should compel you to buy a new one regularly — but don’t fall for it.

“I love my car, and I don’t care that the value goes down,” she said. “Think of the 11 years I have saved money not having car payments, or trading it in and spending more money to get another car.”

So what about those cups of coffee? On average, we pay $3 a cup, so $1,000 could buy roughly 333 cups. But naturally, making your own coffee is much cheaper.

I plugged some numbers into a coffee calculator designed by Bone Fide Wealth, a financial planning service. A $16 bag of beans from Peet’s Coffee at Costco could brew about 41 cups of coffee for 39 cents each. So a $1,000 iPhone is worth about 2,500 cups of coffee. Not as compelling.

Doug Boneparth, the president of Bone Fide Wealth, made a counterpoint. For people who have plenty of cash and are aware of the impacts of their spending, splurging on new phones could be inconsequential to their overall savings goals compared with bigger expenses like housing — and if phones make them happy, go for it. He said he sets aside cash every year to buy a new iPhone as a sort of hobby.

“Personal finance is quite personal,” Mr. Boneparth said.

But he acknowledged that even his hobby was beginning to have diminishing returns because new phones weren’t getting much better technologically every year. “The 13 is the first one where I’m like, ‘This one literally only has a better camera,’” he said of the latest iPhone.

Ms. Orman cautioned that for most people who didn’t have as much money in the bank, especially those in debt, the effects of a phone upgrade could snowball. A $1,000 phone charged to a credit card could turn into $3,000 with interest by the time it’s paid off, she said. More debt could also affect your credit score, making it harder to buy or rent a home.

“If you think a phone is worth going into debt for, then, oh my God, you’ve now just set yourself up for always being in debt,” she said. “The truth of the matter is there’s nothing other than a medical expense worth going into debt for.”
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
Nurse who raped woman continued working for a year despite police alert
Drought forces closures of England’s canal routes, canceling boat holidays
Sweet tooth scents: food-inspired perfumes surge as weight-loss drugs suppress appetites
Experts warn Britain dangerously reliant on imported food
Family of Notting Hill Carnival murder victim call event unmanageable
Bunkers, Billions and Apocalypse: The Secret Compounds of Zuckerberg and the Tech Giants
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
×