A common piece of frugal advice is to hang on to something until you cannot use it any longer. While this is good advice for a T-shirt or a car that doesn't require costly repairs, it might not be the wisest advice when it comes to technology.

Every year there are new phone, laptop, and camera models; the device you are currently using to read this article will be obsolete in only a few years. But buying the newest tech when it comes out is not budget-friendly. To remain frugal and to get the most return for your tech investment, you need to find the sweet spot of buying and selling gadgets.

Here are a few important things to keep in mind.

Obsolete Gadgets Are Harder to Sell

When you use a certain gadget until it is obsolete, you then lose out on getting a decent amount of money back when you sell it. If that technology is more than five years old, what motivation would buyers have to buy your used item at top dollar when they can usually score a better deal on refurbished items that also come with a manufacturer’s warranty?

Let’s do some math. Say you bought an unlocked 16GB iPhone 4 for $649 when it first came out in June 2011. You thought you were being frugal by using the same phone for five years. Wrong! Not only are you probably experiencing a slower device that takes lower-quality photos, but the phone is now harder to sell.

iphone-size-review

The current average sale of the iPhone 4 on eBay is about $41, including shipping, but excluding fees. The $649 original price minus a resale of $41 leaves you with a final price of $608. Divide that by five years of use, and you get $121.60 per year.

If you had upgraded your phone every two to three years instead, and sold your old phone before the price dropped significantly, then you would decrease your use cost per year. I bought an unlocked 32GB iPhone 5s on eBay in September 2015 for $287. Several similar phones recently sold on eBay for about $225. If I sold the phone today for that price, after subtracting shipping and fees from my costs, my phone would have cost me about $85 for nine months of use, or about $9.50 a month, which works out to about $114 per year.

In this case, it would be better to wait on updating, since the phone is still current and the price will not drop too significantly in another year. Even if I sold the phone in September 2017 for $150, I would make about $122 after fees and shipping. This would leave me with a loss of $165 and cost me about $82.56 per year.

Repairing or Replacing Gadgets Is Pricey

Also, if you wait until your gadget breaks or becomes too obsolete to use, you run the risk of needing to replace it at a premium price.

For example, if you use a laptop every day, and it breaks, you must then find a quick replacement or pay a lot of money out of pocket to have it repaired. You won't have the time or flexibility to bargain shop. You might even be tempted to pay full retail for a bargain computer that will need to be replaced again in another year or two.

computer-tech-repair

The average life span of a laptop is about four years -- at this point, the hardware begins to age and become dated. Of course, some people use their laptops much longer without any issues. For my own laptops, I try to buy one that is a few months to a year old. Then I will sell it within two years, making back most of my investment.

If You Aren't Using It, Don't Let It Cost You

Most people have two to three gadgets that have very similar functions. This is especially true for Apple fans. My own household has two iPhones, one iPad, and one iPod touch -- four devices that do almost the same thing. Because of device overlap, some gadgets do not get much use, but owners are hesitant to get rid of them. Why sell a gadget if it could still possibly be useful? However, letting your unused gadget just sit on the shelf is costing you money.

I bought a 16GB Apple iPod Touch, mid-5th generation, over a year ago on eBay for $88 plus $12.99 shipping. I bought the gadget to use as a Wi-Fi baby monitor, but ended up not using it at all. I have the chance to sell it on eBay for $90–105 with shipping.

ipod-touch-ebay

If I sold the iPod for $100, shipping included, then I would pocket about $80 of that after shipping, eBay, and PayPal fees. The iPod Touch would have cost me $21 per year to use.

However, if I hesitated on selling the gadget for another year, the selling price could drop, especially after the new Apple products are released. Next year, my current iPod might earn me $65 on eBay, including shipping. After all the fees, I would profit about $48. The device would have ended up costing me $52.99 to use it, or $26.50 per year to use. While that might not seem like a huge difference, realize that the gadget would probably have gone unused for another year, essentially wasting money.

Finding the Sweet Spot of Buying and Selling Gadgets

There is definitely a sweet spot when buying and selling technology. You don't want to buy a gadget when it first comes out. You also don't want to wait too long to sell your old gadgets. Finding the right balance between the two will allow you to have the lowest cost per year on your gadgets.

tablet-sell

Generally, I will buy the latest technology secondhand. I usually buy it six months after the release or even right after Apple releases its newest device. I only want to be two to three steps behind the latest release, if possible. For selling, I try to sell when a gadget is about three years old, before the next big tech release.

Sometimes this strategy leaves me without a certain gadget for a few weeks. Since we have so many gadgets at my house, it is easy to use something else while I wait for a good deal. For example, my husband always has a phone that's slightly newer than mine. Therefore, when it is time to update, my phone will be sold, and I will take over his phone. He will switch to his work cell for a few weeks and get a used newer phone.

Time and Savings Analysis

This might sound like a lot of work, but it truly isn't. I don't keep exact charts of when one of my technology needs to be sold, nor do I keep detailed accounts of how much money this process has saved me. It is more of a "my laptop isn't performing at its peak anymore" or "I just heard the rumors about the new iPhone" thought process that remind me to research the going price of my current technology, as well as how much it would cost to replace it.

time-vs-money

I have been on the unfortunate end of needing to pay a lot of money to replace and repair my laptop when I let it get obsolete. I have also watched my friends get the latest iPhone with their phone company's expensive payment plan, only to trade it in for the next model within a year, not realizing how much money they are wasting because it is only an extra $20 a month.

Now I own only Apple products because they retain their high resale value, and it is just my preferred technology. However, these strategies can be used with other quality brands and gadgets, too.

How often do you upgrade your technology? Do you try to get a significant amount of the original price back when you sell? Or do you use them until they're completely worn out? Share your answers in the comments below.

Image Credit: Hadrian via Shutterstock.com, goodluz via Shutterstock.com, Production Perig via Shutterstock.com, Malashevska Olena via Shutterstock.com.