You will never have to pay extra for an item update. Updates will be free for the life-time of the product. You can download the latest version of your theme under “Downloads” when logged into ThemeForest: http://themeforest.net/downloads/
*Before updating any item or website, make sure to save a backup!
You can then de-activate and delete your old theme. Then upload your new theme again via the WordPress Dashboard.
OR you can over-write the files over via FTP if you have FTP access. You will not lose any settings or content by doing this.
You can turn on automatic updates for WordPress themes by using the Envato Market WordPress Plugin. Visit the Envato Market Plugin site for directions on how to install the plugin.
Link to Envato Market WordPress Plugin: https://envato.com/market-plugin/