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Thinking of upgrading to a new phone?

“Buying a $1,000 iPhone can be equivalent to giving up $17,000 in retirement savings or 2,500 cups of coffee” according to Brian X. Chen, writing for The New York Times

Although buying a new iPhone of other top of the line phone might just cost the equivalent of buying a coffee a day for a year, financially astute readers might do some easy math and discover that the $700-$1,000 invested in a retirement account today could grow to about $17,000 in 30 years!

Consider that fewer than half of Americans have adequate emergency savings but many will upgrade their phones every year or two.

“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.” Orman further explains that a “$1,000 phone charged to a credit card could turn into $3,000 with interest by the time it’s paid off.” Yikes! 

Is it really worth going into debt for a new phone? Your answer indicates whether you are a short-term thinker or a long-term planner. 

Source: Financial Planning for Women