Which handphone can you buy with your monthly fixed income?

Handphone is a necessity nowadays.

Every now and then, new models of handphone are being introduced into the market, with price tag ranging from a few hundred ringgit to a few thousand ringgit.

From the perspective of personal finance management, one simple formula to evaluate your affordability for new handphone is that: the handphone price should not exceed your one week worth of net income for each year of usage.

Therefore:

• If you tend to change a new handphone every year, your handphone cost should not exceed 1/4 of your net income (equivalent to 1 week of net income).
• If you tend to change a new handphone every 2 years, your handphone cost should not exceed 1/2 of your net income (equivalent to 2 weeks of net income).
• If you tend to change a new handphone every 3 years, your handphone cost should not exceed 3/4 of your net income (equivalent to 3 weeks of net income).
• If you tend to change a new handphone every 4 years, your handphone cost should not exceed 1 month of your net income (equivalent to 4 weeks of net income).

If you are going to trade in your old handphone when buying a new handphone, your cost will then be the selling price of the new handphone deducted by the preloved selling price of your old handphone.

With this simple evaluation method in mind, the tables below show the maximum cost of handphone you can buy, relative to your monthly salary.

and the table below maps the handphone price range with some popular handphone models for your reference.

Assumptions and conditions:

• Net income = Salary - EPF contribution - SOCSO - EIS - income tax PCB
• Employee's portion of EPF contribution = 11%.

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