How to upgrade bicycle parts?

I'm a new rider who has bought a Marin San Rafael and wanted to upgrade (not replace) some parts on the bike. How do I know what parts are compatible and what aren't? Whether it's worth it or not on the bicycle? This is a commuter bike so I'm not sure if there are many people that upgrade parts to it. In any case I'm confused. Any suggestions? Thanks!

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So you haven’t explained why you want to upgrade the parts on your bike. But regardless, upgrading will certainly mean that you will be replacing or buying new stuff on your bike.

That said, what are you thinking of upgrading? Unless you simply want to get newer/better tires or add a rack or reflectors or put on bar-ends (if you have straight bars), replacing existing stuff on a commuter-bike is probably not worth the investment (and aggravation). Not only that, you’ll be surprised at how expensive all the upgrades start getting.

Not only, that, upgrading certain components within your component group, especially at the price-range of commuter bikes may only invite incompatibility issues, so you may not get much of an advantage.

So my recommendation is to get your bike serviced (or do it yourself) so that it’s running as well as it can. Then save your money for a another bike that has more of the stuff you want. Keep in mind that there are plenty of used bikes available that might meet your requirements and are available for a fraction of the cost of a new one.
In most cases with bicycles upgrading will require replacing a part.
The most sensible upgrades to your bike would be tires, saddle and maybe handlebar grips, just small stuff that make a big difference, especially tires. I looked at your bike online and I don’t think a major parts upgrade is sensible. If you can find good used wheels that would work, get them.
Just to throw in my 2 cents worth. I would convert it into either a single speed or fix gear commuter, check out the fix gear gallery and 63xc.com for ideas and tips on converting your bike. I guarantee you’ll be glad you did.
go to MTBR.com and read some in the forums.
also talk with the mechanics -not the salseman at your Local Bike Shops – tell them what you want your bike to do, that you think it needs an upgrade.
They will give you better advice because you can show them your bike and talk about specifics.

New Wheels will make a big difference – your set is probably heavy and low end. Handbuilt wheels start at 300$.
Um, you’ll have to replace parts if you’re upgrading…And any bike shop would be happy to help you with that! Ask around for a reputable one where you live, shop and compare as you would with anything else.