PanamaTimes

Saturday, Oct 24, 2026

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

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×