Don't let gadgets devour the family budget

  @Money July 3, 2013: 4:06 PM ET
family tech

Help your child figure out how much to save for a gadget that's not in the family budget.

(Money Magazine)

Your kids are (once again) clamoring for the latest iSomething. Meanwhile, you and your spouse are locking horns over whether to buy a bigger TV or a faster PC. Oh, and the AV receiver is on the fritz; that's going to need replacing soon too.

Living in a digital world sure gets expensive.

The average American home has more than twice as many Internet-connected devices as people, the NPD Group reports. And annual household spending on electronics last year was up 36% over 2011, to $1,312, the Consumer Electronics Association says.

Here's how to keep your clan tech-happy without going broke:

Swap home upgrades

You know waiting until a wireless contract is up significantly cuts the cost of a new mobile device. But you might not know that most carriers let you exchange upgrades within a family plan, which is ideal for when your teen cracks his screen or one of you needs a specific new feature (like point-by-point audio navigation). Applying another family member's upgrade -- assuming the person is happy to keep his or her phone -- helps you avoid paying full price.

Related: Best advice now for saving and spending

How it works: You renew the contract and get the phone, but don't activate it, says Dan Ackerman of tech site CNET. Then simply ask the carrier to have the cell connected to another line.

Opt for the next best

While early adopters pay a premium, those who buy older versions are rewarded. The newest iPad sets you back $499, for example, but the earlier one costs $399. Going back two generations on a device saves more, and can make sense if you don't need the latest bells and whistles.

Prefer the current model? Buy it refurbished.

"Refurbished tech products often provide big savings with little compromise," says Rick Broida, who writes for PC World. (A fixed-up version of the newest iPad sells at a 10% discount.)

Devices are quality tested; phones usually get new batteries. Most companies even offer some kind of warranty.

Xbox One vs. PlayStation 4

One caveat: Avoid refurb TVs, says Ackerman, as they may require costly repairs.

Put old models to good use

After you replace a device, pass the older model to one of your kids. Or trade it in: Amazon, Target, Best Buy, Apple, and all have buy-back programs. You can get cash or, in some cases, credit for your electronics (sometimes the latter is worth more, notes Ackerman).

Related: Best deals on tech

For a Samsung Galaxy S3 in good shape, you could recoup $150, almost enough for a new one.

Hand over the tab

When your child is desperate for a gadget that's not in the budget, help her figure out how much she needs to save in order to buy it herself, says Neale Godfrey, head of financial literacy firm Green-Street Commons.

Ultimately, the child gets what she wants, along with the satisfaction of having earned it. And you don't end up holding the bill. To top of page

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