I love to travel and enjoy fashion, but electronics are not a big deal to me. I normally buy new gadgets when I need them and rarely because they’re new or sexy—except for the iPhone.
I succumbed to pressure from my new team at work and bought the iPhone. One guy, Brian, should’ve worked for Apple’s marketing team. He was constantly thinking up new iPhone commercials. For months, I heard teammates say—“There’s an app for that . . . . Check out this flashlight app . . . . The iPhone does this faster . . . . Google maps is much better on an iPhone,” and many more comments. It felt like working in an infomercial! When Brian showed me how to hack into the iPhone to get internet access on my laptop for no additional charge, I was sold. I bought the iPhone a few weeks later, justifying the purchase with the free internet.
1st Problem: Justifying Long-Term Costs with Short-Term Benefits
I justified an ongoing, long-term cost—monthly plan and maintenance to the iPhone— with a temporary benefit. Apple would eventually block the hack, which they did a few months later. Once I couldn’t use my iPhone to get internet on my laptop, I lost my main benefit and was stuck with the ongoing costs. Long-term costs should only be justified with long-term benefits; otherwise, when the short-term benefits are over, you end up stuck with all costs and none of the value.
2nd Problem: Maintenance Costs were too High
I dropped things, and often. The iPhone was the most delicate phone on the market, due to the large glass screen. After having the iPhone for 8 months, I accidentally dropped and broke it, despite using a heavy duty case. Apple charged $295 for a replacement iPhone and wouldn’t lower the cost by allowing me to downgrade to older version or one with smaller memory.
Final Solution: Change phones & providers!
I had 2 options—sink another $300 into the iPhone, for a total of $1,725 annually, or move on to another phone. The chart below explains why the iPhone was so dang expensive!
How the iPhone cost as much as a trip to Greece! |
| First iPhone * |
$350 |
| Yearly Costs for Cell Phone Plan: $90/ month for 350 minutes, texts,and iPhone data plan |
$1,080 |
| Yearly cost before breaking phone |
$1,430 |
| Replacement iPhone |
$295 |
| Total 1-Year Cost for iPhone |
$1,725 !!!! |
For someone that’s not into technology and would rather spend that money traveling, it didn’t make sense to throw more money at Apple or AT&T.
I changed to Sprint, where I got more minutes and unlimited texts for $20 less per month and got a HTC Hero with Android apps and a touch screen for $179 after the rebate. Get this—paying the early termination fee and buying a new phone was only $14 more expensive than getting a replacement iPhone.
How cheap it was to switch to Sprint |
| AT&T Early termination fee |
$130 |
| Cost of HTC Hero after rebate |
$179 |
| Total cost of switching to Sprint (just $14 more than replacement iPhone) |
$309 |
The Sprint plan offers more minutes, unlimited texts, and costs $240 per year less than AT&T—just enough for a plane ticket to visit my best friend in Seattle!
The iPhone was the best phone on the market. But did I need the best phone? Nope! Just one that fit my lifestyle.
If I had bought the replacement iPhone, I would have spent over $1,700 on my cell phone!
$700 saved on cell phone pays for roundtrip international flight! |
|
iPhone |
HTC Hero |
Difference |
| Phone |
$350 |
$ 179* |
HTC Hero was over $170 cheaper |
| Monthly Plan |
$90 |
$ 70 |
Sprint $30 cheaper monthly and fewer dropped calls |
| Yearly costbefore breakingphone |
$1,430 |
$1,029 |
HTC Hero/ Sprint was $400 cheaper |
| ReplacementPhone |
$295 |
$0 |
HTC Hero was not as delicate and was unlikely to break |
| Total 1-YearCost |
$1,725 |
$1,029 |
Saved about $700! Cost of international flight! |
For some people, almost two grand was worth it. If you prefer electronics and can afford the iPhone after savings and bills are paid—then go for it!
As I said in the beginning of the post, I’m not into electronics. If I had two grand to spend, I’d rather travel or shop. Spending according to my values meant changing from the iPhone to a cheaper phone and having more travel money!
———
What new item did you purchase because your friends, family, or coworkers influenced your decisions? Did the new purchase match your values?
Try adding up the total yearly cost. With the yearly cost in front of you, ask yourself if the item is worth that much? Would you rather spend that cash on something else?
* Although I bought cases for both phones, the cost of 2 iPhone cases and 1 HTC case was not included in the calculations.
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Financially Fab 