The companies invest a lot of money in their marketing and they do have very high success rates with their campaigns. One thing to understand is the company is trying to sell a product to you, they will try all means to make you believe that your camera is outdated and needs to be replaced. If you want to go by what the company says you will have to change your camera every few months. Companies are more aggressive when it comes to Point and Shoot as they are a mass market product. They release newer models every now and then and claim that it is a vast improvement over the previous model. Usually the case is that the newer model only has minor improvements. Another trick companies use commonly is to pump up the pixels, do understand that beyond say the 6 or 7 mega pixel mark the number of mega pixel increase is not giving you a significant advantage. As a thumb rule DO NOT UPGRADE YOU CAMERA FOR AN INCREASE OF LESS THAN 4 Mega Pixels. Another marketing gimmick is ISO , answer would be to check out online reviews to find out the actual quality provided by the camera in question, even if it satisfies you, you are advised not to fall for it. These are not the only marketing tricks, you are advised to read about any new technology before coming to a conclusion whether it is a real advancement that will benefit you or just a marketing gimmick by some MBA grad.

By this we mean real technological advancements, that comes now and then. If you are thinking about upgrading your camera because of a new technology that you feel will benefit you, the first thing to do is to try the technology hands on. A friend or the shop itself will let you try the camera sporting the new technology take some sample shots, not the way the marketing guy wants but in your normal shooting style. Then compare it with results from you current camera, find the difference and evaluate. The chances are that only 1 or 2 time out of ten new technologies will give you significant difference in your style of shooting. The new technology might benefit some other persons style but what you need to find out is whether it provides any real advantage to you.  The best or the only method to find this is to test the technology yourself and then evaluate by comparison. Do not invest in a new camera just because your favorite photography magazine says that the new technology is awesome.

You peers, including colleagues friends and relatives might be commenting that your equipment is old and out dated. This can be out of several reasons, the first being it really is outdated. The rest goes by the line of them having a newer equipment or having read a new review . The most likely chance is that they are showing off their new equipment or their knowledge. Give no heed to such advice. You are the one using the camera and you are the one spending the money. So it should be your requirement that leads you to an upgrade. There is another side to it if you know some one to be a good advisor, then take his advice. It is basically about using your commonsense.

Most people upgrade because they feel better equipment can make them better photographers. Remember equipment is just the tool and not the art. If you have better tool you do have an advantage but they don’t have equipment that can make a good artist yet. Do not upgrade your equipment just because you feel it will improve your work. The best method would be to use public forums to evaluate what is wrong with your photographs and then decide whether an upgrade will help. It is always better to let other decide what is wrong with your photographs. It is advised to use reputed forums where lots of good photographers (professionals) participate.

This is also related to marketing, people tend to fall for heavily marketed products. Another case is where a person falls for a new camera when window shopping these kinds of compulsive behavior should be prevented as that will just lead to waste of money. If you are on DSLR then instead of changing the body the money could be invested in better lens. The point is to invest intelligently and not impulsively.

Having too much money lying around
If this is the scenario then the best thing to do would be to go buy.

The most important thing is to analyse your work and then find what and how your equipment can be upgraded in order to complement your skills.