When I needed a reliable way to get to work everyday - I couldn't use a broken-down car as an excuse for being late - I purchased a theoretically reliable Honda Civic new from the dealer. It was a 2004 model when the 2005 models had already arrived at the showroom, but that didn't provide me much of a discount. I've kept the car for so long mainly because for the most part it still runs like new and somewhat because I don't have a garage to keep a fancier car protected.Much more than the biannual phone upgrade, upgrading cars every few years would be significantly damaging to my personal finances. Why take on unnecessary debt? Why spend $16,000, or $25,000 or $40,000, or however much for a replacement when the 2004 Civic is working fine at 140,000 miles? It's a part of conscious decision-making. The goal isn't depriving consumers of enjoying the products they use, especially when the products are used everyday and have become, for better or worse, an integral part of life. This path isn't right for everyone, however. Replacing and upgrading products that aren't malfunctioning can be a habit that drives a consumer further away from financial independence, whether it's one phone at a time over the course of many years or one unnecessary large purchase that takes resources away from more important goals. Another part of planned obsolescence is when the products you buy are designed to fail after a certain amount of time. Quicken, for example, is a piece of software wherein some features like online connectivity are disabled after several years. The company thus encourages its users to upgrade at least every few years. For more concrete products, manufacturers have moved towards cheaper materials in order to reduce production costs, but the result can be products that fall apart sooner. The best solution, though not always complete, is making conscious spending decisions.
- Recognize that you are not fully in control of your actions. Manufacturers, retailers and marketers understand human psychology better than you (unless it is your job as well). You're being manipulated.
- Although you're being manipulated, you can adjust your behavior to compensate for the direction in which you're being subconsciously pushed.
- Consider whether the product you're interested in purchasing is a need or a want. It's fine to buy products that are nothing more than wants, but it's better to do so after you've given some thought to the alternatives.
- How many hours did you need to work to be able to afford this product, after taxes? If a new mobile phone, not including the two-year contract, costs you one hour of work, it may be a better choice than a phone that costs twenty hours of work.
- What percentage of your net worth are you spending to make this purchase? If your net worth is negative and you owe more in debt than you own, how far back will this put your debt-reduction progress?
- If your purchasing of the product were the lead story in the New York Times, what would the headline say? “Man buys sports car, delays retirement by 5 years?” “Woman upgrades to latest iPhone again, tells children to pay for their own college education?”
- Choose products that aren't designed to fail quickly.