With Apple’s yearly event yesterday announcing new iPhones and other tech, the question many veterans are asking themselves is “Should I upgrade my iPhone?” And after years of selling mobile phones for major retailers, the answer isn’t always so simple. But let’s say you decide to upgrade; how can you do this without taking on more debt? The answer lies in the wonderful power of sinking funds.
Before we get into the nitty gritty details of how to pay for a new iPhone Duo or iPhone 18 Pro/Pro Max, let’s discuss what exactly sinking funds are.
What is a sinking fund?
A sinking fund is a type of savings account where you deposit money for a specific purchase or expense. It is designed to be depleted, thus the name “sinking fund.” Examples of sinking are:
- Car maintenance
- New car fund
- Home repairs
- Travel/vacation
- Christmas/holiday gifts, etc.
You can have a sinking fund for just about anything. And if you watch enough YouTube videos, you’ll see that many budgeters keep their sinking funds in cash envelopes. That’s not your only option, but we’ll get into that later.
How can a sinking fund help me stay out of debt?
One of the biggest benefits of sinking funds is the ability to keep you out of debt. By planning and setting and money in advance for major expenses or purchases, you ensure that you can make the purchase free and clear without any debt. How does this work? You take the total purchase price of something or the amount of anticipated expenses and divide it by how many paychecks you have until you need it fully funded.
Let’s take Christmas for example. You know when Christmas is. It comes at the same time every year. And let’s you want to be prepared for next Christmas and you have one year to do it (or 12 months). The average American spent about $900 (excluding travel) on Christmas in 2025, so let’s use that to set our goal. I would actually add a little more to account for inflation, rising cost of goods, and just to have a buffer.
Assume you want an even $1000 for next Christmas and you want to have it fully funded by the beginning of November and you’re starting in January. That gives you 11 months to save the money. One thousand dollars divided by 11 months is about $91/month. This is the amount you need to save to reach your goal. If you have more paychecks per month, you can include those as well.
For example, say you get VA monthly compensation and two paychecks per month, giving you three opportunities to save per month. In this case, you would divide $1000 by 33 (the number of times you get paid between now and November). The result is about $31/pay period. Now, instead of feeling like you have to come up with all of the money at once, scrambling at the last minute, using Buy Now, Pay Later (BNPL) or running up debt, you have the cash money to fund Christmas.
How does a sinking fund help me buy new tech?
Set up a new sinking fund for tech. It doesn’t have to be specifically for a phone; it can be for a computer, tablet, laptop, accessories, etc. The key is knowing how much you want to spend and how long it will take to save the money.
What payment plan options are available?
You can already guess by now that I’m a huge fan of paying cash for purchases and avoiding debt. If you want to make monthly payments, here are your main options:
- Carrier financing – the one you’re most familiar with as financing from your mobile phone carrier (24-36 months).
- Apple card monthly installments – pay over 24 months.
- Apple Lease with Upgrade – a lease option through Klarna letting you pay over 12 or 24 months and you’ll turn in your old phone when it’s time to upgrade.
How much does the new iPhone cost?
As per yesterday’s announcement, a new iPhone 18 Pro starts at $1199, the 18 Pro Max at $1299, and the new iPhone Duo at $1999.
Does Apple give military/veteran discounts?
Indeed they do, and this is the pro move. Apple offers a 10% discount on most products and accessories. All you have to do is sign in to the Veteran and Military Apple store website with your ID.me account. Once you’re verified, you’ll see the adjusted price.
The catch? You must pay in full upfront.
Whether you do that with a credit or debit card is a topic for another day. Suffice it to say, as far as Apple is concerned, how you make that purchase is between you and your bank. I’ve used the Veteran and Military purchase program to purchase iPhones, laptops, and loads of accessories. I highly recommend taking advantage of it rather than spreading payments out over 12-36 months.
What’s the problem with carrier financing?
Simply put, it ties you to the carrier for the duration of your payments. That means you can’t switch mobile carriers until your devices are paid off. And they will let you finance just about any device. Ask me how I know! Again, from experience, cash is best here. So while it’s true carriers no longer have service contracts, you have the most freedom and flexibility by owning your device and being able to take it wherever you want, especially if you keep your devices for a long time.
And while the financing cost for financing is typically 0%, remember: just because you can make the monthly payment doesn’t mean you can afford it.
Where should I keep my sinking fund?
As I said before, you can simply keep it in a cash envelope (which I’ve done). However, many of you are more digitally savvy. For savvy savers like you, I recommend using a bank or credit union where you can set up savings buckets. You’ll see the total amount in the account but you’ll also be able to see the buckets (sinking funds) within the larger account. Some institutions that have this feature include:
These accounts are usually kept online thereby reducing overhead costs and allowing the bank to offer you better rates. It’s something to look into.
So what’s the bottom line with buying new tech, like the iPhone 18 Pro Max?
Avoid BNPL.
Save your money.
Pay with cash.
Stay away from debt.
Enjoy your new tech or the tech you rolled in with.
What are you going to do?
Your turn:
Are you going to buy the new iPhone? How are you going to pay for it? Did you know about the military discount that Apple offers? Leave a comment below!