The Joneses Are Buying an iPhone5. What Should I Do?

One of the coolest gadgets ever made is about to release the latest version — the iPhone5!

All you hear around the water cooler is how your friends and co-workers have already pre-ordered it and are actually losing sleep in anticipation of its release. Your drab, but functional iPhone4 seems like the first phone ever made and the pressure to upgrade is pulling at your purse strings.

I absolutely LOVE LOVE LOVE the iPhone! It has revolutionized how we interact and surf the web, interact with our friends and family, and in my opinion is quite possibly the best invention of all time. I’m not sure how I would survive now without one but I did it for a long time. However, my iPhone4 (NOT 4S) is working just fine. Actually, I’ve never had a problem with it. So why should I go and buy the iPhone5 now?

I shouldn’t and I’m not.

Two years ago I purchased my iPhone4 for $200 with a new 2-year contract with Verizon. If not for that detail, to be honest, we probably wouldn’t have one though I think they are definitely worth every penny Apple charges. It is a premium product!

With that said, I know some people will stampede others to buy this newest version for all of the wrong reasons. Here are just a few reasons I think you should not buy this new technological masterpiece.

Reasons You Shouldn’t Buy the New iPhone5

  • Your current iPhone/phone works just fine.
  • You have any debt at all. (not including mortgage)
  • You have no emergency fund.
  • You will be using your emergency fund to buy it. (an iPhone is not an emergency.) ๐Ÿ˜€
  • The Joneses will most certainly buy one.
  • You are unemployed or underemployed.
  • You can’t afford to eat HEALTHY. (You can’t afford not to!)
  • You do not have health insurance but need and want it.
  • You are a college student with limited financial resources. (Student loans do not qualify as legitimate financial resources)
  • You have to go into debt to buy it.

With most of America swimming in debt it sounds like no one should buy an iPhone5.

Personally, I will not be running right out and buying an iPhone5. I can wait. After all, I waited until the iPhone4 came out before I took the technological plunge. Even though I admit it is a magical device, my life wasn’t any less awesome without it. It’s not the phone that made my life awesome. Becoming debt free is what made my life awesome!

Debt freedom, by far, exceeds anything the iPhone could ever do for my life!

If I had to choose between paying off debt and buying an iPhone, I would definitely choose paying off debt. You can buy an iPhone later and it is much much more enjoyable when you have no debt to think of.

If you are out of debt already, have a good emergency fund, have set aside money for the new purchase, and are rocking your budget — go buy that iPhone5. Remember a budget isn’t meant to restrict you. If you have a plan and your iPhone purchase isn’t going to be at the expense of your future financial security, it shouldn’t be a problem.

I’m no Scrooge McDuck, all I’m saying is pick your priorities and plan your expenses. Just don’t go out and buy an iPhone5 because your friends are doing it and then complain that you can’t feed your kids, get health insurance, pay your utilities, eat healthy, or save for retirement. Priorities right?

Getting out of debt will put you on the fast track to having the life you want without being broke like the Joneses.

Don’t be like the Joneses. They are broke and unhappy!

Photo Credits: First CelliPhone5

About Brad Chaffee

33 Responses to “The Joneses Are Buying an iPhone5. What Should I Do?”

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  1. Michelle says:

    Right now I’m debating whether or not I want it. I’ve never had a smart phone, and my upgrade is available right now. I just can’t decide if I want to get the 4 for free or spend $200 on the 5!

    • Brad Chaffee says:

      Michelle, ultimately only you can make that choice but I can tell you that there isn’t going to be such a huge difference that you will be missing much if you go with the free option. From 4 to 4S the only real difference is the Siri app which in my opinion is nice but not worth the upgrade. The iPhone 4 is working great for me and I have not had any problem with it. Now my wife on the other hand dropped hers in a river but that is another story all together. LOL

      My opinion. Go with the iPhone 4. A slimmer iPhone with a few new features is not going to make much difference at all. You are still going to love your iPhone4. Hope this helps. ๐Ÿ˜€

    • I agree with Brad. Take the 4. The few things the 5 offers above that are not worth the price difference.

    • Stephanie says:

      I say get the 4 for free! I got the 4 about a year ago, right after the 4S came out, because it was half the price of the 4S and I didn’t care the least bit about Siri. Take that $200 and use it to pay down your mortgage or something, that’s a much more worthwhile investment. ๐Ÿ˜‰

  2. Valid points. I agree and will tune in again.

  3. Agatha says:

    I’m am soooooo with you on this one! Why should we all even care about the new iPhone? The prior generation phones work just as well and some are even free now with many cell carrier incentives. Just another one of those gadget crazes. Totally fine if you can afford it but I just can’t stomach when the advertisers encourage the craze b/c I see peeps who go further in debt just to get the newest fad.

    • Brad Chaffee says:

      It’s crazy right! If my friends are in debt and broke I DO NOT want to follow them into the pit. My iPhone4 works marvelously and the newest features on the iP5 aren’t even that incredible. Cool and sleek maybe but not cool enough to go into debt for (or not pay debt off).

      Did I mention that buying a brand new iP5 as soon as it comes out is much like buying a new car off the showroom floor. It is worth less than you paid for it as soon as you sign your name and that new phone smell goes away fast — like as soon as they come out with the iPhone5S — in a couple of months. ๐Ÿ™‚

      I’ll wait for my free upgrade.

      • Agatha says:

        Perfect analogy! You NEVER buy the brand new car as soon as it comes out.

        Plus there are so many high quality good phones being recycled or thrown away every year just so peeps can upgrade. It creates tons and tons of unnecessary pollution on our earth. So I like to keep my phones as long as I possibly can – until they break basically.

  4. John says:

    We’re clever on our upgrade strategy. We upgrade every 2 years (We’ve been on the 3g, 4, 5 lifescycle). You can slang your iphone 4 on ebay for a bit above $200. We did it when we upgraded from 3G to the 4 two years ago. So yea, I’m upgrading but not to keep up with the Jones’, just doing it so it doesn’t cost me anything.

    • Brad Chaffee says:

      Sounds good to me John! Nothing wrong with swapping a good phone for a better newer phone if it doesn’t cost you anything in the end. That’s the only reason we have an iPhone. We bought ours for $200 and sold our previous phones. Great plan!! I think we’re due for an upgrade in January so we’ll see what they’re offering at that time to determine whether we’ll upgrade or not. Most of the time there is a free option available. Thanks for the sharing!

  5. John says:

    Brad, this strategy works. When you’re due for an upgrade on your plan, you can do it practically for free (aside from taxes). I highly recommend it. In Jan, 4’s on ebay will still be going for around $200ish. Shoot, I’m even seeing cracked screen 4’s on ebay going for $115ish just for the parts!

  6. “You do not have health insurance but need and want it. ” As of last week I can testify to that.

  7. I was using an original I-phone until 6 months ago, then I bumped up to 3GS. Monthly payments are a killer…might be time to go prepaid + tablet, that might be cheaper.

    • Brad Chaffee says:

      And you probably noticed only a few things have changed since then. Probably because you were still able to do most of what you could do with the older model. Sure there are some noticeable differences but for the most part not much. LOL

      I’m not sure I’ve ever spent full price for a new phone. If it’s not heavily discounted I don’t want it. To be perfectly honest I kind squirmed at spending $200 for my iPhone4 2 years ago. No way I would have spent more. I’d still have a Blackberry or Palm Treo if it weren’t for that.

      If prepaid was available for the iPhone and worth the transition I’d do it in a heartbeat. I know there is a no contract service out there that is new for the iPhone but I have not heard anything good about it yet.

  8. Ms Money says:

    I have no problem keeping my 3GS from three years ago! It works perfectly and I can still do the OS upgrades.

    • Brad Chaffee says:

      Yeah I just found out that I can download iOs6 to my iPhone4! For some reason I didn’t think you could do that. I’ll have a newer-ish phone without spending all that money. LOL

  9. Aaron Hung says:

    This is a tough…but I’d rather wait until my two years are up with my current 4S. I heard the Data plan is bump up for the iphone 5 too so I think I’ll skip

    • Brad Chaffee says:

      That’s what we will be doing too. Though we may not be keepin Verizon for our phone plan after our 2 year contract is up since they have changed their data package prices from unlimited. Maybe Sprint or T-Mobile I guess and we will take the free option since we know the iPhone 4 is all we need. we love our iPhone 4 and see no need to upgrade to the 4s or 5 anytime soon.

  10. I got a 3GS for my birthday last year and was excited to hear about the iPhone 5. Once I read all the specs, I did further research to see if it was worth the upgrade I was due for. Instead, I chose a 4 which was free (but included sales tax on the phone which came to $56). Didn’t need Siri. Didn’t need an extra row of apps. Didn’t need an 8MP camera. I love this phone!

    • Brad Chaffee says:

      It gets the job done doesn’t it Briana?? We love ours too. I’ve never had a problem with my iPhone 4. I even tried going to a no contract plan with an Android phone and I was so unhappy with the Droid. The iPhone is such a great product that is easy to use. The Droid needed anti-virus protection and the apps just didn’t seem to function as smoothly compared to the iPhone. That’s when we decided that keeping our iPhone4’s was worth the extra cost. ๐Ÿ™‚

      I love my iPhone 4! ๐Ÿ˜€

  11. David Hunter says:

    Ha! Look at all of you talking about iPhones. I’m still rockin’ my BlackBerry from 2 years ago! It’s a tank!

    • Brad Chaffee says:

      Hahahaha! Man keep rocking the BlackBerry — I love it!! I have a friend that still rocks his and to be honest I loved mine when I had one but it broke. My kids thought it was a baseball apparently. LOL

  12. LB says:

    Reason #10 Because I have a perfectly good phone.

    It actually had to be reformatted and completely redone, so I was without a phone for a few days. It was liberating. I glanced at a few newer phones just to see the prices and I almost threw up. I got my droid 2 used with a broken screen and fixed it up for $70. Then went on a prepay plan that now costs me about $25 every 3 months. I also picked up a free call app with wifi, so rarely use the $25 unless I am completely away from wifi and absolutely need to make or take a call. I figure if my phone dies, I will just go without until my husband makes me take one for emergencies. No need for one, and the price for all of the smart phones that last, make me vomit.

    • Brad Chaffee says:

      Yep, just like reason one. Why buy a new phone when your current phone is working great? no reason to at all. I definitely wouldn’t waste the money just because Apple decides to add a few new features. Totally not worth the cost if you ask me.

      I truly consider my iPhone4 an investment. I love it, use it everyday for so many useful things. I could live without it but I don’t want to. With that said I would HAVE NEVER paid full price for my iPhone or any iPhone for that matter. I get a discount if not a free one or I walk to the next phone company that wants a new customer. you hear that Verizon?

      It’s not the price of the phones that bother me so much because I think they are worth the price. It’s the phone companies phone plans that make me want to vomit. BUT I have tried using the no contract companies and they never seem to be able to provide the same quality of service — signal quality but especially customer service.

  13. Lacey says:

    I’m an adult college student, debt free with an extravagant e-fund and no student loans. My husband makes good money. I could afford the iPhone but I still use a “dumb” phone. Not Internet, just talk & text.

    I’m too busy working hard and studying to bothered by what iPhone the Jones’ have. I use a 3GS iPhone as an iPod. Everywhere I go in this college town has free wifi.

    • Brad Chaffee says:

      Good for you Lacey! While I don’t know if I could go back to the older phones (dumb phones…LOL) but I love how you have your priorities in sync with your goals. Few people are that focused!

      I’m with you! Who the heck cares what the Joneses are going broke to get? I wonder how much more debt the Apple iPhone 5 created with this new release. Probably enough to feed a starving nation. ๐Ÿ˜€

  14. Elle Navorski says:

    Old-fashioned flip phone user here. What all is so special about an I-phone again? Is it that I can get email and internet access anywhere the phone has service?

    I have a favorite friend who nonetheless drives me a little bananas with how often at lunch or dinner she takes out her smartphone to look up something about which we are talking.

    I like your article, otherwise, especially how it points out the importance of basic necessity and losing those noxious Jones’s as neighbors (or at least either ceasing to compete with them or compelling said Jones’s to compete with you, but at a different game, namely prudent financial planning for peace of mind).

  15. Josh says:

    You state ” The only real difference between the iPhone 4 and the Iphone 4s is the siri app”. What you are failing to mention about the devices are things that you may not care about , but others will. The Iphone 4s is equiped with an 8 mp camera, rather than a 5. The processor in in the Iphone 4s is an A5 DUAL CORE processor with twice the power of the SINGLE CORE A4 chip inside of the Iphone 4. Getting back to the camera on the Iphone 4s. Its is much more advanced than the 5mp camera on the Iphone 4 offering a fiver element lens over 4 elements, face detection, Hybrid IR filter,the ability to take a panorama shot, and 1080p video recording. Just saying , beore you offer advice to people , you should lay all the facts about both phones similarities as well as ALL of the differences. Not ” Hey I think they are pretty much the same device”. Are they the same size? Absolutely. Do they perform the same? I think not. Better camera and processor in the 4s make it superior. And while I find siri to be a clever gimmick, voice commands on smartphones are becoming a reality in making your life a little simple as well as SAFER ( think textign and driving)

    • Brad Chaffee says:

      Hey Josh, with all due respect this article wasn’t about what the iPhone 5 had versus the 4. I mentioned it and still (even after your “in-depth” explanation of the differences) do not feel it is worth spending so much money on “A PHONE” just because a newer version is released. The bells and whistles you describe are material wants and not a reason someone should go out and buy one especially if their older model works just fine. The differences (as extremely small as they are) are not worth upgrading each time a new one comes out.

      This is a personal finance blog not a tech site that compares the technologies of the day. My advice was financial in nature and I have no interest in writing a review about the iPhone as you suggested I should. For me it’s really quite simple. People that have debt should not be going out to buy an iPhone 5 because the screen is bigger and the camera was improved or because YOU say they should. Technology is great! Trust me I love my iPhone 4 and I agree that the technology has improved our lives. I believe I said so in the post.

      Even with ALL OF THE NEW FEATURES, is the iPhone 5 worth going into debt for? NEVER!!

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