How to Save for Your Dream Smartphone - A Guide to Building Your Fund

In today's tech-driven world, owning the latest and greatest smartphone has become a necessity for many. Whether it is for personal use or work, a high-end smartphone can enhance our daily lives in countless ways. It can provide advanced features, such as a larger and clearer display, faster processing speed, improved camera quality, and longer battery life. These features make it easier to stay connected, be productive on the go, and capture life's beautiful moments.

However, the prices of these devices can cost a pretty penny to a common buyer! Hence, saving for one can seem like a daunting task. If you, too, are planning to buy your dream smartphone, don't worry, it's not as difficult as it seems.

With easy access to credit, many individuals, particularly millennials and Gen Z, prefer to buy expensive gadgets on EMIs. Buying a smartphone on EMI (Equated Monthly Instalments) may seem like an attractive option, as it allows you to purchase a high-end device immediately without paying the full amount upfront. However, it will likely not prove to be the best option in the long term as it can lead to higher costs, hidden fees, decreased flexibility, and missed opportunities for investment.

Whereas making a financial plan to buy a smartphone is a better choice because it allows you to save money and be in control of your finances. A financial plan will help you to determine how much you can afford to spend on a smartphone and set aside money in advance rather than paying interest on a loan. Additionally, a financial plan will allow you to make an informed purchase decision instead of being swayed by immediate availability or pressure to buy on credit. Hence, it is better to save and invest for your dream smartphone and make the purchase with cash.

This guide enumerates 7 practical steps you can take to build a fund and save for your dream smartphone instead of paying EMIs for a long time and sacrificing your daily needs. From setting a budget to finding smart ways to save, we will cover everything you need to know to make your smartphone dream a reality.

Here's how to plan to buy your dream smartphone:

1. Set Your Goal:

It is important to note that purchasing a smartphone is not a one-time investment. With the advancement in technology and the release of new models every few years, it is likely that you will be replacing your smartphone every 3 years. This means that buying a smartphone is a recurring expense that you will likely face for most of your life. This highlights the importance of developing a sustainable savings plan for purchasing your dream smartphone. By saving and planning for this recurring expense, you can ensure that you have the funds available to make the purchase without undue strain on your budget.

The first step in saving for your dream smartphone is to determine how much you are willing to spend on the device. This will give you a clear target to work towards and help you to stay focused. Take into consideration the various models available, their features, and the cost associated with each. Once you have determined your budget, you will be able to make an informed decision on which smartphone to save for.

Once you have decided which smartphone you would like to buy, you should determine when you would like to make the purchase. This could be a specific date or a timeline based on milestones such as a birthday or anniversary. Having a specific date in mind will give you a sense of urgency and help you stay focused on your goal. It will also allow you to plan for saving and investing, as you will know exactly how much time you have to reach your target.

Join Now: PersonalFN is now on Telegram. Join FREE Today to get 'Daily Wealth Letter' and Exclusive Updates on Mutual Funds

2. Set a Budget:

In order to save effectively for your dream smartphone, it is crucial to determine how much you can afford to save each month. Calculate your monthly expenses, including your fixed costs such as house rent, utilities, EMIs, and transportation, as well as your variable expenses such as groceries, entertainment, and shopping. By calculating your expenses, you will have a clear understanding of how much money you have available to put towards savings each month.

Once you have calculated your expenses, you can start looking for areas where you can cut back. This could include reducing your monthly subscriptions, eating out less, or finding more cost-effective ways to entertain yourself. By making small adjustments to your spending habits, you can free up more money to put towards your goal.

Finally, you can use the information you have gathered to set a realistic budget for saving for your dream smartphone. This budget should take into consideration your monthly expenses, as well as your goals and timeline. By setting a budget, you will have a clear plan for how much you need to save each month in order to reach your goal and make your dream of owning a high-end smartphone a reality.

3. Track Your Spending:

In order to achieve your goal of buying a high-end phone, it is important to keep track of your expenses. By monitoring your spending, you can ensure that you stay within your budget and avoid overspending.

There are several budgeting apps and tools available that can help you track your spending and monitor your expenses. These tools can provide a clear picture of where your money is going and help you identify areas where you can save.

By using apps or tools to monitor your spending, you can identify areas where you can cut back and make adjustments to your spending habits. This will help you get one step closer to owning your dream smartphone by saving more money towards your goal.

4. Find Creative Ways to Save:

One of the best ways to save for your dream smartphone is by finding creative ways to earn extra money. This could include freelancing, selling items you no longer need, or taking on a side hustle. By increasing your income, you can speed up your progress towards your savings goal.

Another way to save money is by utilising discounts and coupons. By taking advantage of promotions and sales, you can save on your everyday expenses, such as groceries, entertainment, and shopping.

A cost-saving alternative to purchasing a new smartphone is to consider purchasing a pre-owned or refurbished smartphone. These phones can often be found at a much lower cost and still offer many of the features and functions of a new phone. This can be a great option for those who are looking to save money and still achieve their goal of owning a high-end smartphone.

5. Not Just Save, but Invest!:

Instead of simply keeping aside a fixed amount every month in your savings account, investing in carefully selected best mutual funds can help you save for your goal of buying a high-end smartphone by offering an opportunity to grow your money over time. When you invest in a mix of diversified mutual fund schemes, your money gets invested into a variety of rewarding stocks, bonds, and other securities, with the goal of generating high returns for investors.

By investing in the right mix of mutual fund schemes, you can potentially earn a higher return on your investment compared to traditional savings methods, such as a savings account and fixed deposit. Additionally, because mutual funds are professionally managed, you can benefit from the expertise and experience of the fund manager, who is responsible for making investment decisions on your behalf.

Furthermore, it helps you save for your goal in a systematic and disciplined way. For example, you can simply set up an SIP (Systematic Investment Plan), where a specified amount of money is automatically invested in a mutual fund each month. This approach, with its sheer power of compounding and rupee cost averaging, can help you build your savings gradually over time without requiring you to make large lumpsum investments.

6. Use PersonalFN's SMART Fund Explorer to Choose the Best Mutual Funds:

It's important to keep in mind that all mutual fund schemes carry some degree of risk, and you should carefully consider your investment goals, risk tolerance, and other factors before investing in a mutual fund. Therefore, it is important to avoid making imprudent investments based solely on potential returns and to be aware of the risks involved.

The process of selecting the best-suited mutual fund schemes involves evaluating various qualitative and quantitative factors. However, not everyone can have the expertise to make informed decisions when it comes to choosing mutual funds that align with their financial goals. Many individuals even avoid investing in stocks and mutual funds due to a lack of market knowledge or fear of market volatility.

To help simplify the process, PersonalFN offers a tool called SMART Fund Explorer. This tool allows individuals to plan their mutual fund investments in a smart and efficient manner. Simply input your S.M.A.R.T. financial goals (in this case, buying a smartphone (others)), determine a suitable time frame for achieving the goal (should be at least 3 years), enter the amount needed in today's terms, and the lumpsum and/or SIP investment that you can contribute as per your budget. After entering all the necessary information, click "Show Me My SMART Investment Plan" for personalised investment plans. This is how the SMART Fund Explorer looks after you insert the details:

Based on the details provided by you, the SMART Fund Explorer provides you with two customised investment plans, including expected returns and the value of your investment at the target date. So, by following one of the investment options as per your risk profile and investing Rs 25,000 in a lumpsum and just Rs 3,500 through SIP, you can achieve your goal of buying your dream smartphone in the next three years.

Besides, you can subscribe to the SMART Fund Explorer and get instant access to the list of best-suited mutual fund schemes as per your selected plan. PersonalFN's SMART Fund Explorer can help you begin your mutual fund investment journey with confidence and make informed decisions to reach your financial goal of owning your dream smartphone.

7. Stay Focused And Committed:

One of the keys to success in saving for your dream smartphone is staying focused and committed to your goal. It's important to remind yourself why you started this journey in the first place and what your end goal is. This will keep you motivated and help you stay on track.

Staying focused and committed is an important part of saving for your dream smartphone. By keeping your goal in mind, staying committed to your budget, and celebrating your progress along the way, you can stay motivated and achieve your goal.

To sum up:

The guide has outlined several steps for building your fund for your dream smartphone. These steps include deciding on your goal, setting a budget, tracking your spending, finding creative ways to save, investing in rewarding mutual funds, using SMART Fund Explorer, and staying focused and committed.

Building your fund for your dream smartphone is a process that takes time, effort, and dedication. However, with the right strategies and approach, you can achieve your goal and enjoy the benefits of owning the smartphone you've always wanted.

So, take action today, and start building a fund for your dream smartphone!

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.