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How to own a flagship smartphone every 3 years without credit card debt

Considering the importance of this device and how much of our lives are on our smartphones, it could arguably be prudent to invest in the best ones you can. However, considering that the premium ones cost almost as much as a bike, many of us often rely on our credit cards to buy one.

Let’s face it, our smartphones are literally an extension of ourselves. It’s probably the first thing you look at in the morning and the last thing you glance at before you doze off at night.

Be it booking a cab, ordering food, scheduling meetings, or sharing funny memes with your best friend, your smart phone is being used almost every hour (maybe even minute!) of every day.

Considering the importance of this device and how much of our lives are on our smartphones, it could arguably be prudent to invest in the best ones you can. However, considering that the premium ones cost almost as much as a bike, many of us often rely on our credit cards to buy one.

What’s more a smartphone is not a one-time thing. You will buy a new one almost every 2-3 years. This means that this is a recurring expense that might probably continue for most of your life!

It’s just so easy

Considering the many deals and “zero cost” EMIs advertised on our plastic buddies, it’s just too easy to go into debt to buy a smartphone. Yes, in case you weren’t aware your credit card EMI is a loan. This means you are now signing away a significant chunk of your monthly earnings to an EMI.


Not only is this not so great for your finances, but it also blocks a major chunk of your credit card balance which could have acted as a last-ditch emergency fund or to pay for a major expense you haven’t seen coming. What’s worse, since this is a recurring expense, you might find yourself with a big credit card balance to pay off each month and this doesn’t stop because as soon as you clear one balance you realise you need to buy something else.

We might say that it would be prudent to save more and spend less but let’s face it, fighting temptation is easier said than done. What you need is a solution that will also build a good habit.

Start a Rs 2,000 SIP in a liquid fund. A liquid fund is one of the least volatile mutual funds and could deliver around 6%-7% rate return annually. In 36 months, you could easily have accumulated Rs 75,000 or more. What you are looking at are 36 SIP months versus 12 EMI months.

Here’s something smarter and almost as easy

A 12-month EMI plan for a Rs 70,000 smartphone could mean an outflow of almost Rs 6,000 or more each month. Instead do this next time.

Start a Rs 2,000 SIP in a liquid fund. A liquid fund is one of the least volatile mutual funds and could deliver around 6%-7% rate return annually. In 36 months, you could easily have accumulated Rs 75,000 or more. What you are looking at are 36 SIP months versus 12 EMI months.

You can do this every time you buy a new smartphone (or any other gadget you replace every 2-3 years). You will  reach the amount right about the time you would be getting bored with your old phone. If you plan for temptation, it doesn’t necessarily have to lead to a debt trap. Be smart, stay away from debt and lead a free life.

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