It is very likely that at some point you fell victim to wanting a new technology 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? Look at these things.
I will use myself as an example here. I almost exclusively use Apple products that date back to my previous job, which was entirely an Apple workplace. I like the synergy between all devices. Often times, when Apple has new product announcements, I’m tempted. Is it time for me to buy something new? I’ll use Apple’s latest product announcement as an example of how to think about technical products.
What would you do with it that you can’t yet?
The first thing you need to do is see if there is something you can do with this new technology product that you can’t do already. Is it really doing something new and new that you haven’t been able to do with the things you have? Does a $ 100 electric toothbrush introduce something new, or can you do it just by brushing your teeth well?
When I look at the new Apple products announced at this show, I see a new iMac … but I already have one that does whatever I need. I see a new iPad, but I already have one that works like a charm. Why should I spend all that money on something that doesn’t do anything I can’t do yet?
Are there cheaper alternatives?
Another thing to consider with a new technology product is whether there are already alternatives that cost less money. Many companies want to do a lot of marketing with their new product, but there are often similar things on the market. Truly revolutionary products are rare.
When I look at Apple’s recent AirTags announcement, I remember the tiles already in place. They practically do the same thing and cost a lot less. (In fact, we already have a few tiles around our house for things like keys.)
Are you just hoping to impress?
When a new technical item appears, many people have the vision to impress friends and family with the new item. You pull out a new phone and someone will be impressed and want to see it, for example.
The truth is that most people just don’t think too much about or notice other people. We drastically exaggerate how much people think about us and how much they notice things about us. It’s called the “headlight effect”. We see ourselves in the “spotlight” when the truth is we usually aren’t. That person who is excited about your device is usually not excited about you, they just think of buying one for themselves.
Are you an early adopter?
What if the tech item is really new? Brand new technology can seem amazing, but there are some downsides to being an early adopter.
First, there is no real sense of how useful the item is. Does this product actually solve the alleged problems? There are no real reviews for a new item. So you only trust the marketing hype.
Second, new technology generally has fatal bugs that are not shown in the product demo. While it should work most of the time, there are often limitations and errors that you will only find while using it. These are usually ironed out in later versions.
A good rule for new technology is to wait for the second version. For example, the original Fitbit was a great product, but it had a few debilitating design flaws that resulted in it breaking easily with regular use. Later versions were far better.
Are you afraid of missing out on something?
The feeling of missing out on something comes directly from social pressure. When your friends are all talking about a new device, you might feel like the only one who isn’t getting it and you are worried about missing out.
In fact, the fear of missing out in this way is so widespread that there is an acronym – FOMO. It shows up in all sorts of things, not just technical products. FOMO even shows up in investing.
Here’s the thing: if the product is really good, it won’t go away tomorrow. It will last for a long time and will likely receive updates and improvements. If you hold back and let your friends get it first, you can find out from them if it really is all that matters or if it will be forgotten in six months. If it’s great, you can get the next version which will likely 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, there is an opportunity cost. Opportunity costs are simply the things you couldn’t have because you spent money on something else instead. If you spend $ 500 on a new piece of tech, that’s $ 500 that you don’t spend on other things.
Often times, realizing opportunity cost leads to financial debt, but you can avoid it by simply putting some thought into the purchase before doing so. What else could you do with that money? Could You Invest It? Could You Pay Off Debt? Is there a more important purchase in your life that you could make?
A good approach is to allow yourself a 30-day wait before buying. If you still want the item after 30 days, buy it. Chances are you will find that the cravings have subsided and you have found other, more rewarding uses for the money.
Too long, not read?
Together, these questions will help you build a sense of financial self-discipline. Instead of giving in to an impulse to buy at the moment, you can instead take a step back and evaluate the purchase a little more carefully. Perhaps you just find yourself riding an emotional wave – excitement, fear of missing out, the spotlight effect – and with a little thought, the wave goes by and you still have money in your pocket.
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