How to budget for a new phone without stretching your money
A phone is one of the biggest purchases many people make in a year. The best deals still hurt if you have to borrow or skip other bills to pay for them. A simple plan helps you decide how much to spend and when.
Step 1: set a ceiling
Decide the most you are willing to spend, including a case, a charger and any extras, before you look at phones. Then browse prices up to that number: see the current lists for Nigeria and Kenya, and the cheapest 5G phones in Nigeria and in Kenya if 5G matters to you.
Step 2: separate needs from wants
List what you need from the phone: battery life, camera, storage, 5G, a headphone jack. Everything else is a want. Outlay has a short guide on how to tell needs from wants.
Step 3: save towards it
If you can wait, saving is cheaper than borrowing. Divide the ceiling by the number of months you can wait:
- Ceiling divided by months gives the amount to set aside each month.
- Put it aside on the same day each month, before spending on other things.
Outlay’s free savings goal calculator works this out for you, and how to save for irregular expenses explains the sinking fund method that suits a purchase like this.
Step 4: compare the real cost
A cheaper phone that you replace every two years can cost more per year than a better one that lasts four. Work out the cost per year, or per use, using this guide to cost per use. Check the price date and the exact version too: our buying checklist covers both.
Step 5: if you borrow, know the cost
Instalment plans and loans add interest and fees. Compare the total you will repay, not the monthly amount. Outlay explains APR and flat interest rates and how to calculate a loan EMI.
Step 6: wait out the impulse
Sales and new launches are designed to rush you. Give yourself a day before you buy: see Outlay’s 24-hour rule. Check whether a discount really saves what it claims with how to calculate a discount.
Step 7: put the plan in one place
Write down the ceiling, the monthly amount and the date you plan to buy. A monthly budget planner shows whether the monthly amount fits.
Prices and availability change often. Always confirm the price, version and warranty with the seller, and borrow only what you can repay.
