Is New Tech Worth the Cost?

It’s very likely that, at some point, you’ve fallen prey for the desire for a new tech product. You hear about a new technology product and it sounds really cool! It has all of these great features that sound amazing. It’s expensive… but it’s really, really tempting. Should you buy it? Consider these things.

I’ll use myself as an example here. I use almost exclusively Apple products, dating back to my previous job, which was an all-Apple workplace. The synergy between all of the devices is something I like. So, when Apple has new product announcements, I’m often enticed. Is it time for me to buy something new? I’ll use Apple’s most recent product announcement as an example of how to think about tech products.

In this article

    What would you do with it that you can’t already do?

    The first thing to consider is whether this new tech product would enable you to do something that you can’t already do. Does it really do something new and novel that you couldn’t already do with the things you have? Does a $100 electric toothbrush introduce anything novel, or could you already achieve that by just brushing your teeth well?

    When I look at the new Apple products announced at that show, I see a new iMac … but I already have one that does everything I need from it. I see a new iPad, but I already have one that works like a charm. Why would I spend all that money on something that doesn’t do anything that I can’t already do?

    Are there less expensive alternatives?

    Another thing to consider with a new tech product is whether or not alternatives already exist that cost less money. Many companies like to make a big marketing splash with their new product, but there are often already things much like it already on the market. Truly revolutionary products are rare.

    When I look at the recent Apple announcement of AirTags, I’m reminded of the Tiles that already exist. They do practically the same thing and cost a lot less. (In fact, we have a few Tiles around our house already, for things like keys.)

    Are you just hoping to impress?

    When a new tech item appears, many people have visions of impressing friends and family with the new item. You’ll pull out a new phone and someone will be impressed and want to see it, for example.

    The truth is that most people simply don’t think about or notice things about other people too much. We drastically overinflate how much people think about us and how much they notice things about us. It’s called the “spotlight effect.” We see ourselves in the “spotlight” when the truth is, we usually aren’t. That person who is wowed about your gadget usually isn’t wowed by you, but instead merely thinking about purchasing one for themselves.

    Are you an early adopter?

    What if the tech item really is new? Brand new tech can seem amazing, but there are some drawbacks to being an early adopter.

    First, there’s no real-world sense of how truly usable the item is. Does this product actually solve the problems it claims? With a new item, there are no real-world reviews of it, so you’re just trusting marketing hype.

    Second, new tech generally has serious bugs that aren’t going to show up in the product demo. While it should mostly work, there are often limitations and errors that you only find while using it. These are usually ironed out in later versions.

    A good rule to follow with new technology is to wait for the second version. For example, the initial Fitbit was a great product, but it had a couple of crippling design flaws that caused it to easily break with regular use. Later versions were far better.

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      Are you afraid of missing out?

      A sense of “missing out” comes straight from social pressure. If your friends are all talking about a new gadget, there might be a sense that you’re the only one who’s not getting it, and you fear missing out.

      In fact, the fear of missing out in this way is so common it has an acronym — FOMO. It shows up in all kinds of things, not just tech products. FOMO even shows up in investing.

      Here’s the thing: If the product is really good, it won’t disappear tomorrow. It will stick around for a long while and likely receive updates and improvements. If you hold off and let your friends get it first, you can find out from them if it really is all it’s cracked up to be, or if it’s forgotten in six months. If it’s great, you can get the next version, which is probably going to be better anyway.

      What else could you do with that money?

      One final thing to consider is the cost itself. Every time you buy something, it comes with an opportunity cost. Opportunity cost is simply the things you were unable to have because you spent money on something else instead. If you spend $500 on a new tech gadget, that’s $500 you aren’t spending on other things.

      Often, realizing opportunity cost leads to financial guilt, but you can avoid that by simply putting some thought into the purchase before you do it. What else might you do with that money? Could you invest it? Could you pay down debt? Is there a more vital purchase in your life that you could make?

      One good approach is to give yourself a 30-day waiting period before making a purchase. If you still want the item after 30 days, then buy it. Likely, you’ll find that the strong desire has faded and you’ve found other, more worthwhile uses for the money.

      We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Trent Hamm

      Founder & Columnist

      Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.