Is It Worth the Cost to Upgrade My Cellphone Now?

Woman thinking about her phone plan
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Editor’s Note: This story originally appeared in Living on the Cheap.

According to a 2021 survey from tech care company Asurion, cell phones are now an essential item for Americans, overtaking their vehicles or refrigerators. It makes sense when you consider that you can’t do group texts with Uber or Lyft. So whenever a new phone model comes out (like last week’s newest iPhone), some people wonder if the cost of upgrading is worth it.

You can read about its features elsewhere, but we’re here to help you crunch the numbers.

A calculator that helps you decide

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The economics of buying a new cellphone is complicated. Figuring out the best deal on a phone almost always means figuring out which wireless carrier to use. So you’re not only looking at the cost of the phone itself, but also the cost of the wireless plan that comes with it.

The decision becomes even more complex if your cell phone service is bundled with other products, such as home internet. If you decide to switch wireless companies because you’re getting a better phone deal, you might also lose the discount you got from bundling that service with your original company — so you’ll need to factor that into your total cost.

To do a simple comparison between two companies offering the same phone, the folks at WalletHub have provided this online calculator. Plug in the up-front cost plus the monthly fee, and the calculator will tell you which option will cost you less over two years.

Operators make the difference

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The real price difference comes when you decide which carrier to use for your wireless. To help you decide, check out this article by Our Living on the Cheap technology author Eric Rosenberg. Spoiler alert: You’ll always save money by using a wireless provider other than the “Big Three” – a conclusion WalletHub researchers reached as well.

Keeping your old phone is the cheapest solution


Unless your phone is so old that software updates won’t work, or has serious performance issues, keeping your existing phone will always make the most financial sense.

But if you have a FOMO phone, there’s a middle ground: Updating to a model that’s at least one generation older than the most recent model.

“There is relatively little difference in features between generations now, compared to years ago where upgrades brought much more noticeable improvements,” said WalletHub analyst Jill Gonzalez. “You can probably get an older generation of phones for half the price with pretty much the same user experience. Consumers can also save money by buying used phones in good condition or taking advantage of carrier discounts.”

Don’t go into debt for a new phone

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In a WalletHub survey, 30% of respondents said a new phone is a necessity and 21% said it was worth going into credit card debt. We’re here to tell you that debt for items that depreciate, or lose value over time, should always be avoided if you have other options — and as discussed above, there are. If you care about this, 80% of people in a WalletHub survey said they don’t judge you for not having the latest iPhone.

Now, back to the group text!

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