Frugal Pinoy

Since I’m tech-inclined, I have a soft spot for gadgets.  Most Filipinos do.  Kaya nga kahit tricycle driver may cellphone.  Once, I even rode a jeep with a TV, DVD player, mp3 player, and one of those portable landlines (you can use it for P5.00 for 3 minutes - how entrepreneurial!) Let’s face it, we’re addicted to gadgets.  But whenever we see a new, shiny gadget that catches our eye and tempts us to empty our wallets, there are a few things we should do:

Do research.  I’ve previously talked about doing online research before buying something.This especially applies to gadgets, where the internet is just crawling with consumer reviews on many tech products.

Play the waiting game. Remember when the Asus EEE PC first came out? Many people got so excited and they just bought one. Now, not only has ASUS made improvements on this product, but several competitors stepped up to the plate and made better, faster, more reliable ultramobile laptops. Now, people are selling their used EEE PCs or internally wishing for a better and newer unit.

The thing is, when a new gadget gets that popular, competing manufacturers will always try to outdo each other - giving you more (and better) choices later on. Plus, the manufacturer will try to fix problems that their first release had. Now, instead of just buying an Asus EEE PC, people who want ultramobile laptops have several brands and models to choose from.

Also, “new” technology gets cheaper when it gets a little older. So waiting a year or so to get that “latest” gadget will usually give you better, less expensive options.

Prioritize features over brands. Instead of thinking “I want a Macbook”, think in terms of features.  You might think you want a Macbook, but does it have the features you need?  A wiser thing to say is “I want a computer that has an 80 GB hard disk, which is enough for my needs, and has a RAM of 1GB and a dual-core processor, so I can multitask”. Mention a feature, followed by why you need it.

Also, when you’re buying expensive gadgets, oftentimes a sizeable percentage of the cost is the brand alone.  This is why you shouldn’t consider brand as a primary criteria for buying a gadget.

For example, did you know that many laptop brands don’t even manufacture their own laptops? ECS (or Elitegroup), MSI, Quanta, Compal, and other lesser-known laptop manufacturers create the basic parts and builds the laptops, while the bigger brands such as Dell, Acer, Compaq just add customizations - if at all - and slap their brand names on the final product. (Additional sources: Manufacturer Relation Matrix, Laptop Worldwide, and Notebook OEM/ODM Relationships)  Although the example I’ve used is for laptops, this can also be applied to several tech products.  Apple doesn’t even manufacture the iPhone!

Really, what it all boils down to is features, reliability, and longevity.  Which is why reading reviews and technical specs of a gadget will be worth more than just buying from the brand that does the most marketing.

Set up a fund for that gadget. I’ve been mentioning laptops throughout this post, mostly because I am in the process of buying one.  I’ve been saving up for a laptop for the past few months - which is much better than waiting for your paycheck, buying an expensive gadget with it, and then finding out you don’t have enough to pay the bills.  Since you’ll be able to plan, you’ll know you can get that gadget and pay for the necessities at the same time.  Although planning a gadget fund requires 30 minutes or so, you get guiltless and worry-free purchases in return.

Paying for a gadget via credit card and paying the monthly minimum also isn’t advisable, because of the interest rates and transaction fees involved.

If you’re earning P100,000 per month, live on P 20,000, and want a P30,000 gadget, then go ahead and use your next paycheck to pay for the gadget.  But if your money requires a bit more management before you can dole out huge amounts in one sitting, you’ll need to take the “saving and planning route”.

Calculate when it’ll pay for itself - if applicable. Some gadgets can have income-producing or money-saving qualities.  For example, switching from an analog camera to a digital camera will save some money in the long run, since you won’t need to print all of your pictures.  In my case, a laptop will allow me to work anywhere, so I can take it with me to school and earn money during my breaks or those classes where the profs don’t show up.  Or, a fuel-efficient scooter can save you some money when you use it instead of a car to go to work.

If the gadget you want has some money-saving or money-earning potential, it won’t hurt to compute when it will “pay for itself”.  Using some of the above examples:

• If you spend roughly P200 per month having photographs developed for your film camera, and you buy a digital camera worth P10,000, your digital camera will have saved you money after 50 months of using it (assuming you don’t print a photograph in between).
• If I buy a P30,000 laptop and get paid P1,000 per hour of work on the laptop, it will make money for me after 30 hours of working with it.

It’s important to calculate this if you want to compare a gadget’s estimated longevity with the time required for it to save/make you money.  If the laptop i buy is known to break down  after only 5 hours of work, or if the digital camera is known to break down in one year - eh di hindi sulit!  The Simple Dollar has an informative post on how long it takes for some gadgets to break even compared to their initial cost.  In the future, I’ll try to do a local version of that post, so that it’s relevant to Filipinos.

Of course, the buying process is entirely up to you.  These tips are just here in case you want to make a more informed and frugal decision, before you withdraw funds to pay for that new tech toy.

What’s the latest expensive gadget you bought?  What was your buying process like?

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This entry was posted on Monday, July 7th, 2008 at 2:31 am and is filed under Frugality, Gadgets. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.