12 Better Ways to Spend $1,000 Than on the New iPhone
Recently I bought the iPhone X, and immediately had buyer's remorse. I'd reconciled the $1,000 price tag with my budget and bank account, but while purchasing the phone through my provider, the extra charges started to rack up. After the upgrade and other fees plus taxes and insurance, the bill came to over $1,400. The phone has since arrived, but it's still in the box because I can't decide whether or not I really want it (because I definitely don't need it) — especially after all the horror stories about how fragile it is and the very high costs to replace it.
Meanwhile, I'm over here thinking about how I can better spend that money if I return the darn thing. If you're in the same boat, let me suggest a few ideas. (See also: 5 Sites That Will Pay for Your Old iPhone)
1. Buy an alpaca
You may have seen a meme on social media suggesting that you buy an alpaca instead of an iPhone X. It's cute, yeah, but it makes sense. For as low as $500, you can purchase a darling alpaca from livestock-auction site Openherd. This isn't just a pet, either; it's an investment. Savvy alpaca owners can turn a profit on sheared alpaca fleece, like the folks at Prairie Fields Farm in Columbus, Ohio, which sells its natural alpaca fiber to my fashion-designer pal Celeste Malvar-Stewart who, in turn, creates stunning couture dresses and other pieces from her studio, Hangar 31.
Of course, you'll need to learn how to care for your alpaca properly (make sure you have the space, obviously), but because the internet has an answer to almost anything, you're in luck with this how-to on raising alpacas from Modern Farmer.
2. Fix whatever needs fixing
Does your vehicle need repairs? Washer and dryer on the fritz? Do you need dental work? Use the grand you planned to spend on the iPhone X to solve these problems that in the long run, will cost you even more money if not addressed. (See also: 10 Simple Household Repairs Every Frugal Person Should Master)
3. Open or contribute to an IRA or 401(k)
If you don't already have an IRA, use the $1,000 to open one.
"Go straight to an investment banker," advises personal finance expert Brian Davis, co-founder of the real estate rental site SparkRental.com. "I personally use Charles Schwab because they're easy and cheap, but use whoever you like." IRAs come with great tax benefits — contributions are tax-deductible — and they're extremely easy to set up.
If you already have an IRA or a 401(k), get closer to maxing it out — hopefully with employer matching — so you're not leaving free money on the table. (See also: 401(k) or IRA? You Need Both)
Save yourself hassle and management fees by investing in a low-fee index fund or target date fund, advises Ian Atkins, managing editor of Small Business Finance section of Fit Small Business. "Putting $1,000 in a tax-advantaged retirement account now can mean big value in 30 years," he says. "Alternatively, a used iPhone X will be almost worthless in three years."
4. Cross off a bucket-list item
Is there something on your bucket list you've been dying to do? Sky-dive, maybe? Finally taking that trip to Europe? Cross these items off by forgoing the iPhone X. (See also: Where to Do 9 Popular Bucket List Items on a Budget)
5. Spend it on your health and wellness
Your health and wellness should be worth more to you than a phone. It's priceless, actually.
Schedule a spa day, invest in products that will provide a better night's sleep, hire a personal trainer to get your fitness back on track, or jet off on a relaxing retreat to nourish your mind, body, and soul.
6. Take a class to learn or enhance skills
If you're between jobs or just want to make a change, invest in yourself by learning new skills or enhancing skills you already have. Look into classes at your local community college or find a specialty online. For example, you might consider the Entrepreneurial Essentials course to advance your career with a certification from Harvard Business School's online program, HBX. This particular option is only $950, leaving you $50 to celebrate your smart decision with cocktails. Holla!
7. Pay off a credit card that's compounding daily interest
I'm gonna be straight with you: If you have existing credit card debt that's compounding daily interest, you can't afford the iPhone X. No if, ands, or buts about that.
M.A. Haley, author and founder of RichestMom.com, is with me on this, especially when it comes to cards with high interest rates. She points out that if you put the $1,000 iPhone on a credit card with an APR of 30 percent or more, then only pay the minimum balance every month, it will take you more than five years to clear the balance and will cost you more than $1,000 in interest payments.
Bottom line: Don't go deeper into debt to keep up with the Joneses. You know better than that. (See also: 5-Day Debt Reduction Plan: Pay It Off)
8. Invest in artwork
I've invested in artwork for the past 10 years, but not because I want to make money off it. I enjoy looking at the pieces I've purchased from up-and-coming artists — like my buddy Julian Rapp; his Love Robot is the heart of my collection — but I do keep my fingers crossed that one day what's hanging on my walls will pay for my retirement. If you research what you're buying and make smart purchases, it may pay off for you, too — like the lucky ducks who bought an original Banksy without knowing it. No promises, but it's a path to pursue.
9. Put it aside for an emergency
Life throws us curve balls all the time, and sometimes (OK, most of the time) they're expensive. If you don't already have an emergency fund — which should be between six and nine months' of your usual expenses — walk straight out of the Apple Store and put your iPhone X money in a safe place for when you need it most. (See also: 7 Easy Ways to Build an Emergency Fund From $0)
10. Make home improvements
The great thing about home improvements is that they can add resale value to your home, well beyond the upfront cost of the actual improvements. Take a look around to identify areas that could use updating. This is especially timely if you're planning to sell in the near future. You'll attract buyers much more easily with a home that's clean, modern, and move-in ready without the new owners having to put in too much time or extra money on the back end. (See also: 9 Easy Home Improvements That Add Thousands to Your Listing)
11. Invest in blue chip stocks
Did you know that if you invested $1,000 in Amazon 20 years ago you'd be a millionaire by now? Shoulda, coulda, woulda, right? Still, it's not too late to invest in the next Amazon with blue chip stocks.
"Blue chip stocks are stocks of well-established companies that are most likely a household name," explains Ogechi Igbokwe, founder of the savings site OneSavvyDollar. "Fortunately, new investors can download the Robinhood [free stock trading] app, which charges 0 percent commissions for trades and has no minimum balance requirements to get started. This is an app I use, and so far so good."
12. Improve the life of someone less fortunate
If there's no part of your life that can benefit from saving $1,000 on a new phone, let your generosity shine. I'm not a proponent of donating to national charities — some of them seem like they are nothing more than profit-turning business with tax exemptions — but I've provided loans to Kiva borrowers in the past, which helps low-income entrepreneurs and students realize their dreams.
If I do donate to charity, I usually focus on my local community, and even then I do my research. I want to make sure my money will help the person or people in need and not a CEO sitting behind his desk counting the cash. So if you'd like to make a donation to someone or an organization directly, you should do the same and get all the details before donating. Once you know where your money is going, you can rest easy knowing that you just made someone else's life easier, safer, or more comfortable, and that will provide way more joy than a phone ever could.
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