Are You Overspending On The Wrong Technology?

Technology plays a central role in our lives, and we spend a lot of money buying the latest devices or just replacing broken ones. The real question, though, is whether we’re spending our money wisely. Too many users are overspending on devices because they don’t understand what items are smart investments and how to avoid unnecessary debt.

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Wrong Technology

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Wants Versus Needs

The most important factor in minimizing excessive technology spending is to recognize the difference between what you want and what you need. For example, most people opt to replace their phones regularly because they use them constantly. But as cell phones get larger, acting like mini-tablets, does it make sense to upgrade them as often? Many experts say no; you’d get more function for less money by buying a new tablet.

Obviously, the fanciest tablets are more expensive than a new phone, but if you’re looking for a device to take notes, read books, and surf the web at home, a basic tablet will take some of the wear off your phone and help both devices last longer.

Note The Trends

Another way to save money on your devices is by paying attention to market trends. You don’t want to buy incompatible pieces of technology or something that’s about to be obsolete. Headphone technology is changing rapidly right now, for example, and they may be going out of style with the rise of focused audio. This new technology will make it possible for users to listen to audio without wearing any device, but it also means that you might want to skip the new headphones and wait for the next generation of tech, especially if you tend to be an early adopter.

Early Adopter Issues

Speaking of early adoption, the tendency to buy early and often is one of the easiest ways to get into debt. For example, Apple has several new devices out this fall, but they’ll all come at a significant premium. To afford them, though, many opt to put the devices on credit cards and end up paying high interest rates. If you pay only the minimum every month, you’ll be paying for the device longer than you’re using it.

The other problem with early adoption is that many of these devices still have functional bugs. Just think about the first Apple Watch with its ballooning batteries – compared to the newer iterations, it wasn’t a good investment. Waiting for reviews and updates can help you get the most out of your devices.

Know The Specs

Finally, to get the most out of your devices and avoid excess spending, it’s critical that you recognize what specifications will serve you best. Many people think they want a very thin laptop, for example, but in reality, thin laptops overheat quickly and limit what you can do. When you have a deeper understanding of how devices work, such as how quickly you need your computer to run or how much memory you need, you’re able to make smarter purchasing decisions and save money.

Many people buy devices for today, not thinking about their needs down the line. If you’re committed to keeping your budget under control, though, you need to ensure you’re making a purchase that will last for the next several years. We may live in a world designed around planned obsolescence, but we can extend the function of our devices by buying smarter.

About the Author

Ankur Shah
Ankur Shah is the founder of the Value Investing India Report, a leading independent, value oriented journal of the Indian financial markets. Ankur has more than eight years of equity research experience covering emerging markets, with a focus on India and South East Asia. He has worked as both a buy-side investment analyst for a global long/short equity hedge fund and a sell-side analyst for an emerging markets investment bank. Ankur is a graduate of Harvard Business School. You can learn more about his latest views on global markets at the Value Investing India Report. -- He can be emailed at