Written by Trent Hamm, The Simple Dollar is a popular personal finance blog that chronicles one man's road back from overwhelming debt to financial security. Hamm declared the contents of the blog to be in the Public Domain in 2008 and available for sharing when attributed properly. We will share a couple of posts a week.
I write for a living, mostly for websites. It’s not surprising that I have a great deal of use for a number of electronic items. I have a smartphone, a reasonably modern computer, a laptop, and an iPad Mini.
Almost since the day I graduated from college, using computers and other electronic devices has been an essential part of my professional life and a useful part of my personal life. I’ve been buying and upgrading electronic items of all kinds for more than a decade.
Of course, in the middle of that period, my financial life took a painful turn, forcing me to start making real changes to how I spent my money and my time. This led not only to serious changes in our family’s spending, but also to a career change for myself. We had three kids and bought a house on top of that.
All of these changes have simply refined my electronic buying strategy, scaling it back but not really changing the core principles. Here’s how I do things.
Why Buying Electronics Is a Struggle
First of all, you simply cannot buy electronic items for life. They are stuffed full of so many tiny components that the odds are that something will eventually break in them. Anything with a large circuit board in it is begging to eventually face some serious problems, simply because there are so many points of potential failure in the device.
Compare a computer motherboard to a toaster. In a toaster, there are only a few things that can really go wrong. With a computer motherboard? Look at all those resistors and capacitors. If even one of them has a tiny flaw that doesn’t make itself apparent at first, it can cause deep problems with the entire device, often damaging other parts, and it’s often impossible to diagnose.
The same thing is true for a hard drive or a microprocessor. There are just too many ways for the item to fail. Because of the failure rate of electronic parts, I don’t buy electronics with a “buy it for life” mindset.
Instead, I use a slightly different approach.
Electronics are often advertised by showing you the many, many different things that they can do. In reality, though, almost all of us end up using our devices for just a few key things.
For me, I use my desktop computer for writing, for web surfing, for a bit of video and image editing, for a bit of programming, for listening to podcasts while I work, and for occasional Skype calls and computer games. That’s it – and that’s far more than, say, my mother uses her computer for. She uses it for emails, a bit of web surfing, and occasional Skype calls. I don’t believe she’s ever used it for anything else.
Sure, both of us could use our devices for other things – but we don’t. Those other tasks are cool and all, but they’re just not part of our daily routines. I don’t need a computer that does high-end video editing and can play the latest video games in 1080p. Why? Because I don’t do those things with any regularity.
The idea of “maybe someday” is a dangerous one when it comes to electronics. There are a lot of tasks I might someday do. Sure, I might someday do high end video editing. Sure, I might someday want a mobile device that I can stream video on from anywhere. However, if those things ever translate into a pressing need, that need will show up quite often in my life and eventually show me that I need to consider new tasks the next time I make an electronics purchase.
For me, buying electronics is purely task-focused. I buy things solely to take care of the tasks I need to accomplish with them and don’t worry about the “maybe somedays.”
Identifying Those Tasks
The really useful frugal skill when it comes to buying electronics is knowing what tasks you actually need to accomplish. What is it that you actually need to do on a daily basis or a multiple-times-a-week basis with this electronics item?
I have a pretty concrete list of what I need to do with my desktop computer, as I listed above. The entire purpose of my laptop is to “write on the road,” which is a professional need on a pretty frequent basis. My iPad Touch was a gift that, while I find it useful, I wouldn’t buy one for myself. My smartphone’s sole purpose is to keep in touch with people, mostly via text and Facebook and sometimes email, for both professional and personal reasons.
How do I identify those tasks? I keep track of use frequency, usually in the background. For my desktop and laptop, I use RescueTime. It shows me what applications I actually use. For my other devices, I look at how much data the applications have sent and received. The list of applications used shows me what I actually do with the device.
For other devices, the easiest way is to keep a diary. If you’re on the fence about an upgrade or a contract renewal, this is a great way to help you make up your mind. Keep track of how often you use the devices and services you have available to you. Did you watch Netflix for an hour? Note it. Did you watch cable for an hour? Note it.
If you keep track of those things on a regular basis – you don’t have to always do it, but doing it occasionally is very useful – you’ll get a clear picture of the things you do to fill your time.
Now, here’s the key part. If a cool service is available to you right now and you’re not using it, you shouldn’t ever pay because you might use it in the future. If you have a Netflix subscription, for example, and you watch Netflix one or two hours a month, the subscription isn’t worth it and it’s not worth paying extra to have a device with a Netflix app when you upgrade.
What I’ve found is that when I scale back and look at my actual usage, it turns out that I rarely need to upgrade my electronics. Instead, I usually wait until they stop working for some reason before I upgrade.
When I do upgrade – and, honestly, it’s usually a replacement for a dead device – I look for a device that can simply do the things I know I’m already doing and do it well.
For example, when I replace my desktop computer, all I need is a low-powered device without a monitor. I already have a monitor. Nothing I do requires heavy computer power. Thus, I’m going to go pretty low-end. I’ll either build it myself or look at computer guides for a solid low-end choice and I’ll save money.
When I replace my smartphone, my only questions are whether it can send and receive calls and texts and whether I can use Evernote (for all of my notes) and Facebook (for getting in touch with people) on it. Everything else doesn’t matter.
If I replace my television, all I need is something that can show me an HDMI signal with a reasonable size. I already have stuff that can show me Netflix on the television, so I don’t need a TV with apps. I don’t need a giant screen – at least not any bigger than what we own. I’ll just look for a smaller, well-built television with minimal features beyond high definition. It will do everything I need for it to do and I’ll save a bundle compared to Frank’s 2000″ TV.
I do not care about what a device might do in the future or that it offers a feature I already have and don’t use. If I don’t use something, it doesn’t matter to me and I’m not going to pay for it. If it’s a hypothetical future service, I’ll wait for that hypothetical future to arrive before I worry about it.
Right now, I have a desktop computer that’s about two years old. The previous desktop computer I used became our family computer when our old family computer bit the dust. Both computers do everything we need, so we won’t be replacing one until one of these fails. As I mentioned above, I use it for pretty basic tasks and only have need for free apps.
I have a laptop computer that’s somewhere between six and seven years old. I will not replace it until it dies. I use it solely for writing in travel situations. When I do replace it, I’ll simply buy a low-end laptop with a decently sized keyboard (I have big hands).
I have an iPad Mini that I received as a gift. I mostly use it for reading and occasional web browsing. I will likely use it until the thing doesn’t boot any more and then I’ll probably not replace it, though I’ll probably receive one as a gift at that point. It doesn’t serve a truly vital function for me.
I have a smartphone that I’ll continue to use until it croaks. I’m happy with my cellular provider, so I’ll just go in there and get a new phone when the time comes. I’ll choose the cheapest phone they have that does what I need – texting, calls, Facebook, and Evernote – and it’ll probably be a freebie.
We have a television that we purchased in 2010 to replace our old CRT television. We’ll use it until it fails, then we’ll replace it with, if anything, a lower-end one. All we need it for is a reasonably large HD screen, as we have an old Playstation 3 (bought before our financial meltdown) that provides Netflix for us.
All of our electronics are on a “use it until it dies, then buy a minimal replacement” cycle. It saves us money and lets us do everything we need to do.
The Number One Biggest Take-Home Lesson
People rarely use 90% of the “gee whiz” features on the devices they buy. Marketers gush over all of these features and apps and other attributes, but in truth, I don’t use the vast majority of them, nor does anyone I know.
Everyone just uses a handful of things on their devices. They might use other features once in a great while, but the vast majority of usage boils down to just a handful of things.
It’s not worth spending money on those unused features or those rare exceptions. Ignore them. They don’t matter. They’re just marketing.
Instead, know what you actually need to do with the device. Compare all of the devices that allow you to do those things you need to do and choose the one with the best reliability reputation and warranty out of that group. Use Consumer Reports if you’re not sure.
If you find yourself desiring a new feature, see if you already have something that can do it. When we wanted Netflix on our television, we found that we could get it through our video game consoles that we already owned, for example. When new apps come out, they almost always run on what we already have. You’ll probably find that you use it for a while, then discover you didn’t really need it that much anyway.
If you stick with that policy, you’ll have devices that do the things you actually need them to do but you won’t find yourself wasting money on things you don’t need.