‎Let’s talk about buying an iPhone for $1,000. Apple Chief Executive Tim Cook once compared this price to buying a cup of coffee a day in a year. No big deal, right?‎

‎But financial advisers see it differently. According to some estimates, an investment of $1,000 in a retirement account today will reach about $17,000 in 30 years.‎

‎In other words, $700 to $1,000 — the price range of modern smartphones — is a big purchase. According to the Pew Research Center, less than half of American adults have enough savings to cover three months of emergency expenses. Still, one in five people surveyed by financial website WalletHub believed that the new phone was worth sinking into debt.‎

‎Tech companies fairly argue that our smartphones are our most powerful tools to work and play and thus cost every penny. But they also play number games to reduce the cost of the new phone. Samsung, for example, has said that its new Galaxy phone costs $200 — but this is only possible if you trade for credit toward the new phone in a one-year-old phone. The actual price is $800.‎

‎So it’s worth looking at phone upgrades in a different light to weigh their financial impact. This can help us make well-thought-out decisions so that the move doesn’t happen automatically.‎

‎The irony of Mr. Cook’s coffee analogy is not missing from financial advisor Soz Orman who once likened people’s coffee habits to “urinating $1 million in the drain.” He said the seemingly low amount of money that people spend on Java and now phone upgrades could lead to poverty.‎

‎”Do you need a new one every year?” asked Miss Orman, who hosts the “Women and Money” podcast. “Of course not. It’s just a ridiculous waste of money.‎

‎Apple and Samsung did not immediately respond to requests for comment.‎

‎So what’s the actual cost of a phone upgrade? Let’s look at the mathematics.‎

‎Philipsi, a company that buys and sells used phones, published an analysis this year saying that buying a new iPhone every year is smart. Here was his breakdown:‎

‎Last year, the iPhone 12 was priced at $799. It now costs $460 if you trade it to lower the price of a new phone. The latest iPhones, the iPhone 13, also costs $799. So if you trade in your iPhone 12, the iPhone 13 will cost $339. At this rate, if you buy one iPhone each year for four years, including the original $799, the net total will be $1,816.‎

‎If you wait three years for the iPhone 15, the trade-in value of your iPhone 12 will drop to about $200. Trade it and the iPhone 13 will cost $599. Add to the original $799 and your net cost in four years will be $1,398.‎

‎In summary, an annual upgrade in three years costs $418 more, or about $12 a month, Phillipsi said.‎

‎Designed this way, it might seem like a bargain to get a new phone each year, unlike every few years. But plugging these data into a financial calculator tells a different story.‎

‎According to Miss Orman’s savings calculator, if you put $12 a month into a retirement account, such as the Roth IRA, which has an average annual rate of 10%, that amount will translate into $25.161 over 30 years.‎

‎Ms. Orman compared the trade-in dilemma to buying cars. Car manufacturers may argue that the decreasing commercial price of your car will force you to buy a new car on a regular basis — but don’t get bogged down by it.‎

‎”I love my car, and I don’t care if the price drops,” he said. “Think of the 11 years I’ve saved money without paying for a car, or spending more money to trade in it and get another car.”‎

‎So what about these cups of coffee? On average, we pay $3 for a cup, so $1,000 can buy about 333 cups. But naturally, making your own coffee is much cheaper.‎

‎I plugged some numbers into a coffee calculator designed by financial planning service Bonfed Wealth. A bag of beans worth $16 from pet coffee in Costco could make 41 cups of coffee for 39 cents. So a $1,000 iPhone costs about 2,500 cups of coffee. Not so awesome.‎

‎Doug Bon Perth, president of BonFed Wealth, made a counter point. For people who have enough cash and are aware of the impact of their spending, jumping on a new phone may be unimportant to their overall savings goals compared to large expenses like housing — and if the phones make them happy, go for it. He said he sets aside cash every year to buy a new iPhone as a hobby.‎

‎”Personal finances are quite personal,” Said Mr. Bonperth.‎

‎But he admitted that even his hobby had started making low profits because new phones were not getting much better technically every year. “13 is the first one in which I say ‘it only has a better camera’,” he said of the latest iPhone.‎

‎Ms Orman warned that for most people who don’t have that much money in the bank, especially those who are in debt, the effects of phone upgrades could increase. A $1 phone charged on a credit card can turn into $000 with interest until payment, he said. Excessive debt can also affect your credit score, making it difficult to buy or rent a home.‎

‎”If you think the phone is worth sinking into debt, then, Oh God, you’ve now prepared yourself to be in debt forever,” he said. The truth of the matter is that there is nothing but medical expenses worth going into debt.‎