From Issue #10 | By Michael Cahlin

The lure of new products can send your budget into a tailspin. How to deal with upgrade-itis and bag a bargain.

Daddy, I need a new PC. Mommy, I want a new iPod.!

Kids are always looking for the latest, greatest thing. Unfortunately, with thousands of new products released every year, buying everything they say they need can put a major dent in your paycheck. So how does a parent stay solvent and guilt-free?

The secret says Van Baker, VP of Research Media Industry at the Gartner Group, is knowing what questions to ask to determine what components are broken or outdated and need to be replaced verus those where a relatively inexpensive upgrade can extend their usefulness. For example, when your child says they need a new computer, a perfect response is "what will a new PC do that yours doesn't."

When your child asks for other stuff, your job is twofold: to figure out what (if anything) has changed in their regular routine that now necessitates new or upgraded equipment. Then, determine what saves more dollars and makes more sense: a simple component upgrade or complete hardware replacement.

When to Upgrade

Here's a common scenario. Many older PCs only have a CD player, so a child wanting a new combination CD/DVD player capable of burning music CDs and playing DVD movies is a reasonable request. Combo CD/DVD player/burners that fit inside your PC can be found for as low as $65 at Fry's Electronics and Newegg.com. This is a bargain if you can install it and if you're certain your PC supports it.

However, if like most PC parents, you have to pay for installation and you don't know diddly about system requirements and need a memory upgrade from 128 to 256K to support the new player, this band-aid fix could cost in excess of $200 -- and that may just be the tip of the escalating tech-iceberg.

As children get older, their technology needs evolve and change. Downloading music, working with video, printing digital photos and creating PowerPoint reports all require new investments in software and hardware, plus gobs of storage. Sprinkle in broken printers, lost headsets and missing music players, and it's easy to spend more than you need and get less than you want.

Ask the Experts

We talked to experts about the stuff kids want -- and say they need -- to help you decide what should stay and what should go. Here's what we discovered.

Desktop Computers. Certainly any PC more than three years old and not running Windows XP is a clear candidate for replacement, advises David Galvin, director of product marketing, Worldwide Consumer PC Business for Hewlett Packard. Adding extra storage or even the above mentioned CD/DVD drive are not only cost-prohibitive, but also risky because it's impossible to factor in reliability and compatibility hiccups. In most cases, it's not worth the expense of paying someone to fix it, especially if the repair or update costs more than $200.

Advice: Entry-level desktops from companies like Dell, eMachines, Gateway and HP start for as little as $299.99. Many even come with a LCD monitor (see next category). Unless you're looking for a high-end gaming machine or have special video editing needs, you can find all the PC your child needs for under $500.

Monitors. If the monitor works, replacing a big clunky CRT monitor with a slim, sexy LCD is more about looks than function, cautions Matt Lewis, a Geeks On Call franchise owner in Dallas, Texas. However, a compelling argument can be made for moving up from a 15-inch screen to a 17-, 19- or even 21-inch flat-panel display. Not only will it take up less desk real estate, but the image is clearer and shaper.

Advice: LCD prices have plummeted over the years. You can find a fantastic 17-inch monitor from companies like Sharp, ViewSonic and Dell for $300 to $350. However, instead of buying a la carte, you'll get more byte for your tech buck when you combine the purchase with a desktop. Today, most entry-level PCs come with a LCD. Special promotions can upgrade to a larger display or pay for shipping.

Printers. Printers are so cheap, it makes no sense to spend money on any repair or even buy an extended warranty, cautions Glenn Cunningham, VP of consumer electronics for Amazon.com. He recommends purchasing a multifunction printer such as the Epson Stylus CX3810 ($XXX), a combination inkjet, copier and scanner.

Advice: Make sure your printer has at least two cartridges -- black and color. This allows you to turn off the color when printing black-and-white text, and save a few bucks in the process.

MP3 Players. Unless it's broken, the only reason to replace an MP3 player is because your child needs more storage or wants more features. Keep in mind, even an entry-level 4-GB player like Creative Lab's Zen Micro ($179.99) stores a staggering 2,000 songs, making it easy to tune out any "I need" whines.

Advice: Look for prices on audio players to continue to fall. The latest models sport color screens, more storage, longer battery life and some even have an FM player. Released earlier this year, Apple's iPods shuffle is a great buy. The 512MB version runs $99; the 1GB version is $149.

Headsets. Like music players, unless it's broken or (more likely) lost, there's no reason to upgrade or replace headsets. When it comes to portable players, most kids will tell you having sound is more important than how it sounds.

Advice: Most kids can't tell the difference between a $10 and $50 headset. To really hear the difference, pocket the cash and save up for a high-end headset like Shure's E2c ($99) or Etymotic Research's ER-6 ($139).

Cell Phones. Phone upgrades are driven by the terms of your contract and vary by company explains Kathleen Dunleavy, a spokesperson for Sprint. Kids generally want a new phone for new features like text messaging, a camera or a cooler design. Many older phones have text message capabilities, but you need to activate the service.

Advice: Check your policy. In many cases, you can upgrade your phone for free or a slight fee after 18 months.

Kids want a lot more than they really need. One way to determine how much they really want versus need something is ask them to donate a portion of their allowance to its purchase. In addition to a priceless expression, their reaction will quickly tell you how important that gadget really is.

Where The Buys Are Okay, we've given you expert advice on how to fight upgrade-itis. Here's how to get the best deal on the tech your kid's needs and wants.

1. Work The Web. Ask your child to pitch in and help you find the best deals on the tech they're asking for. You'll be stunned at what they can deliver -- and how quickly -- when it's for them.

2. Buy More, Pay Less. Look for rebates and savings on combined purchases such as laptops, desktops, monitors, printers and digital cameras. Manufacturers like Epson and HP routinely offer cash rebates or component upgrades and/or toss in free shipping to close the deal.

3. Dollars and Deals. To track down similar deals, try running a search on a product's name and the word "rebate" or "coupon" via Google or your favorite search engine. For example, "Dell desktop rebate." You can also search the names of retailers and the word "promotion" or "discount."

4. Let Your Brower Do The Walking. Comparison shopping sites such as Shopping.com, Shopzilla.com and MySimon.com are terrific for researching products and finding rock-bottom prices. Other alternatives like Dealcatcher.com offer free online coupons and some rebate information for stuff on Amazon, Apple, Best Buy, Dell and others, while sites like CertificateSwap.com and SwapAGift.com sell unwanted holiday gift cards at discounted prices.

5. Book 'Em and Buy 'Em. Amazon.com lets you compare prices and buy from retailers such as Circuit City, Best Buy, Target and its own store. You can also buy new, used and refurbished goods at significant savings from merchants and individual sellers, all protected by Amazon's return policy.

6. Going, Going, Gone. While most people think of eBay as an auction site, you'll also find online merchants and sellers with static Buy It Now prices.