How to Save for a Phone or Laptop Without Financing
By Cedar & Ledger
A new phone or laptop is easy to buy on a payment plan, and the monthly number can look small. Saving for it first takes a little longer, but you know the full cost up front and nothing follows you for the next two years. This guide shows how to set a goal, turn it into a per-paycheck number, and compare that with financing, using example numbers.
Every dollar figure and rate here is a made-up example to show the math, not a typical price, rate, or a recommendation. Prices, taxes, and financing terms vary by store and place. This is general information, not financial advice.
Quick checklist
- ☐ Decide what you actually need the device to do
- ☐ Price it with tax and the extras you'll buy
- ☐ Look at cheaper ways to get the same thing
- ☐ Pick a date and divide the goal by the months left
- ☐ Save it in a separate fund each payday
- ☐ Compare the total cost of financing before you sign
- ☐ Buy when the fund is full
The steps below walk through each one.
Step 1: Decide what you need it to do
Write down the two or three things the new device has to handle: school apps, work software, photo editing, gaming, or just calls and messages. That list keeps you from paying for features you won't use. If your current device still works, you also have time on your side: waiting while you save costs nothing.
Step 2: Price it with tax and extras
The shelf price isn't the whole cost. Add sales tax where you live, plus the extras you'll actually buy, like a case, a charger, or a screen protector.
Example (made-up numbers):
| Item (example) | Amount |
|---|---|
| Laptop price | $1,000 |
| Sales tax (example 8%) | $80 |
| Case and charger | $40 |
| Savings goal | $1,120 |
Step 3: Look at cheaper ways to get the same thing
Before you lock in the goal, check whether a lower number gets you what you listed in Step 1:
- Last year's model, which often does the same everyday tasks
- Certified refurbished or open-box from the maker or a store with a return window and warranty
- Selling or trading in your old device and putting that money in the fund
- Student or employee discounts, if you qualify
Step 4: Turn the goal into a per-paycheck number
Savings goal ÷ months until you want to buy = monthly savings.
Example (made-up numbers): $1,120 ÷ 8 months = $140 a month. If you're paid every two weeks, that's about $66 per paycheck ($1,120 ÷ about 17 checks in 8 months).
If that's too much, push the date out or lower the goal with Step 3. How to Budget by Paycheck shows how to line savings up with your paydays.
Step 5: Keep it in its own fund
Move the amount to a separate savings account or a separate line in your budget on payday, before you spend on anything else. This is a sinking fund: money set aside for a planned purchase. Keep it apart from your emergency fund so a tempting sale doesn't eat your cushion. Sinking Funds: How to Budget for the Holidays explains the method, and Emergency Fund Basics covers the cushion.
Step 6: Compare the total cost of financing
If you're thinking about a payment plan, compare the total you'd pay, not just the monthly payment.
Example (made-up numbers): financing $1,080 (price plus tax) at an example 20% APR for 12 months is about $100 a month, or about $1,201 in total. That's about $121 more than paying cash. Saving the same $100 a month instead gets you to $1,080 in about 11 months, with nothing owed after.
| Example: $1,080 laptop + tax | Monthly | Total paid |
|---|---|---|
| Save first, then buy | $100 for about 11 months | $1,080 |
| Finance at example 20% APR, 12 months | about $100 for 12 months | about $1,201 |
Some plans are advertised at 0%. If you look at one, read the terms closely:
- Deferred interest. With some store cards and promos, if the balance isn't paid in full by the end of the promo, interest can be charged back to the purchase date.
- Phone plans tied to a carrier. A device payment plan may need to be paid off in full if you switch carriers early.
- Split-pay apps. Paying in a few installments can add late fees if a payment bounces, and several of them at once are easy to lose track of.
A 0% plan you pay on time can cost the same as cash. The risk is in the fine print and in having one more payment on the calendar. How to Track Your Bills So Nothing Is Late helps if you already have a few.
Step 7: Buy when the fund is full
When the fund hits the goal, check the price again (it may have dropped), buy it, and close out the fund. If there's money left over, move it to your next goal. If your device breaks before the fund is full, that's what an emergency fund is for, or a cheaper stopgap device until you're there.
Common snags
- Raiding the fund for a sale on something else. Keep it in its own account or line.
- Forgetting tax and accessories. The goal comes up short at the register.
- Comparing monthly payments only. Look at the total paid.
- Upgrading because a new model came out. If the old one still does the job from Step 1, the fund can keep growing.
A simple way to track it
A note on your phone works. If you'd like a spreadsheet, the Sinking Funds & Savings Goals Tracker ($5, Excel and Google Sheets) tracks a device fund next to your other goals with a target and date, and shows what to set aside each month and per paycheck (details). The free Starter Budget Sheet is a simple monthly budget for finding the room (details).
Honest note: I make these templates and sell them under Cedar & Ledger, so I'd earn from a purchase. General information only, not financial advice.
Try the free sinking fund calculator (how much to save per paycheck) →
Related template: read about the savings goals template
See all Cedar & Ledger templates
Frequently asked questions
What does this guide cover?
Price it with tax and extras, look for a cheaper way to get the same thing, save a set amount each paycheck, and compare the total cost of financing.
What are the steps?
1) Decide what you need it to do; 2) Price it with tax and extras; 3) Look at cheaper ways to get the same thing; 4) Turn the goal into a per-paycheck number; 5) Keep it in its own fund; 6) Compare the total cost of financing; 7) Buy when the fund is full.
Do I need a template to do this?
No. A notebook or a sheet you build yourself works fine. Cedar & Ledger also sells spreadsheet templates (I'd earn from a purchase); see the template box at the top of this page.
Is this financial advice?
No. It's general information with example numbers only, not financial, tax, legal or medical advice. Use your own numbers and check anything important with a qualified professional or the official source.