When is a SmartPhone the Right Financial Decision?

Incase app for iPhone I last purchased a typical cell phone back in October 2008 with a 2 year contract when we returned from China. My old cell phone broke while we were on assignment in China and I needed something once we were back on the ground in US.

I have been eligible for an upgrade for quite some time, but have resisted getting a new phone that required a data plan. Like many, my head danced with the idea of being able to get so much more done while on the road and staying connected. I knew when I bit the bullet to get a basic cell phone years ago that I would never go back to going without one and I know if I upgraded to a smartphone with internet/data access I will never go back. Upgrading to a smartphone is a clear lifestyle upgrade decision that will continue to likely go on for the rest of our working life and not something I want to make without careful planning. At roughly $30/mo or $360/yr for decent data plan - that kind of subscription expense adds up over the course of the next twenty years (about $7.2k).

So after a lot of reflection I felt at some point I would make a decision to get a smartphone. There are clear benefits to me in my current situation - I'm time poor and I feel confident a smartphone would help (hard to quantify though in $). As my children grow up and become more active in extracurriculars, I think a smartphone would give me a bit more freedom to shuttle them around so I foresee the need increasing over the next several years.

However rather than just rush out and buy one, I created a financial goal to focus on - paying off the primary mortgage on our Rental #1. With the mortgage paid off, we'd have an increase in cash flow that would be moving us forward in our financial goals and easily offset the increase in our fixed monthly expenses for a data plan. I've been doing just that - trying to keep my current phone going as long as I can and focusing on eliminating the rental mortgage to increase our cash flow. Im within about 3 years of that goal right now.

Well things came to a head this weekend as my phone died on me. I can't go without my cell phone between my job, rentals, etc - it is a critical link for me. This was the scenario I didn't have a good answer for -- do I try to find a cheap replacement phone or go ahead and upgrade to a smartphone? I made the decision to upgrade today because I need a phone and didn't see a cheap replacement option I was comfortable with. It is unfortunate I didn't have the rental mortgage paid off first, but I feel I need to continue my focus on the financial goal to help offset the small increase in our expenses. When you add this to all our other small monthly expense increases - they add up to a healthy chunk of committed cash flow.

I don't think there is an easy answer for those who are wrestling with the smartphone upgrade decision, but remember it is lifestyle inflation that will add up over the long run. I think the best strategy in the end is to defer the decision as long as you practically can.

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Comments (11)


I was in your same boat about 6 months ago. I resisted the data plan/smartphone cost for 5 years now. I finally bit the bullet and bought a old iPhone that was only 79.99 brand new and got the cheapest data package to manage email and productivity type apps.

It has largely been the single most productive thing I have done this year. Using google documents through the phone has let me sync my home and work computers. I have apps that have my insurance website, flexible spending accounts and ADP for my paystub. I can do all that work from my phone and never have to wait to get to a computer. My home and work calenders are sync to my phone so I never miss anything.

The only challenge, beyond cost, is the discipline to walk away from your phone when you family is the priority. I have trained myself to turn the ringer off and leave it in another room when I get home at 6pm until the kids go to sleep at 8pm. Otherwise the temptation to be productive is too strong.

hope this helps.

I think this is an example of overthinking the situation, given your personal situation. I recognize that a decision like this DOES have long-term financial implications, but in perspective with your earnings and the potential benefits of the smartphone, you really shouldn't sweat it.

A smartphone frees you from a desk. You don't have to be at work or at home to get an important email, to check on a flight, to get directions, etc. You can take advantage of time-sensitive opportunities (for example if you ever get emails from friends offering tickets, furniture, etc. to the first person to respond). $30 a month is peanuts for the long-term benefits.

I agree with Jonathan. You will not be disappointed.

After finally purchasing a smartphone, debating its value as you are, I was surprised to realize the value was so worthwhile, and that I had been underestimating the positive impact that the smartphone would make on my life.

YIt is highly unlikely to disappoint you.

Consider a pre-paid smartphone, the plans are significantly cheaper. The phones are not subsidized as with the contract phones, but the cost will pay for itself in plan savings within a few months.

I pay $35/mo for service with an android phone on Virgin Mobile.

Does your wife have a smartphone? If one of you has one, is that sufficient?

Like you, once you go smartphone, you can't go back, and I am concerned about the subscription fees which are high.

It's not much help to you now, but there are some super low priced options coming onto the market. In December I started using a smartphone and data plan provided by Republic Wireless, which uses the Sprint Network. It costs $19/month for unlimited phone, text and data. The phone was $99 but there was only one phone available from them.

Another service, Voyager Mobile, was set to launch today with a similar, albeit slightly more expensive model. There website was attacked so they delayed launch.

Thanks for all the comments - generally are all positive about creating good value from the smartphone expense. I'm 48 hours into using my smartphone and I am quickly learning where everyone is coming from. Its an Android phone -- any critical apps you'd recommend?

Imagine you can get an IBM discount. I have AT&T and with my company discount the data portion adds about $18.75 a month to my bill.

The biggest way to save $ I found was to skip a texting plan ($20/month). It would be nice to have one, but I just couldn't justify the cost. If you get an iPhone or BB you can use the dedicated messaging services in lieu of that large reoccurring charge!

Like yourself I was procrastinating somewhat to get a smartphone.

Finally it was given as present to me. Two years later I only take pictures & make phone calls. It is to tiring to use that tiny keyboard and screen to achieve anything useful..

My most used app is Personal Finance by bishinews. You can set up multiple portfolios for your Roth, Brokerage, and other accounts and even select a small or large widget for your desktop for each portfolio. You can also track oil, gas, gold, and other futures as widgets. At least 2 of my 5 home screens are devoted to these widgets. The app also offers many of the financial calculators that would have to be downloaded as separate apps otherwise. Dropbox is another great app - download for your home computer as well and then you can access all your files on your phone. Sophisticated excel and word files (with password protection and complicated formulas) may reuire the paid version of "documents to go" which is the only app i have ever bought. It works great and i can check and up date my many financial files right on my phone. Audible is also a great app if you spend a lot of time in the car and want to listen to audiobooks. Lastly, advance task killer is a good app to kill programs rummimg in the background to free up extra memory. I have it as a widget on my desktop so you just have to tap it.

I've been using a 5-year-old Samsung smartphone prior to buying a Samsung Galaxy Note last January. My previous phone was still in good condition but I felt the need to upgrade. I initially wanted a tablet but I don't want to have a phone and a tablet separately, and the Galaxy Note is pretty much a phone and a tablet which is cool. My wife is now using my old smartphone, replacing her old non-smartphone Nokia so it wasn't really a total waste. We have a small business and we are able to use our smartphones for this. Just like with any other office equipment, you need to invest on the good stuff so you can benefit from it more.

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