Updated: January 23, 2023
I believe proper personal finance is about maintaining a healthy balance between enjoying the present and preparing for the future.
There’s nothing wrong with spending on wants and rewarding yourself with the latest gadget, shopping for new clothes, or going on vacation – especially if you can afford it anyway.
However, it’s important to be careful when you’re buying something new because you don’t want to fall into a psychological trap called The Diderot Effect.
The Story of Denis Diderot
Denis Diderot is an 18th-century French philosopher. He was the co-founder and writer of Encyclopédie, one of the most comprehensive encyclopedias of the time.
However, despite these achievements, he lived nearly his entire life in poverty.
In 1765, his daughter was about to be married, but he could not afford to provide a dowry. When Catherine the Great, the Empress of Russia, learned about Diderot’s financial troubles, she offered to buy his library from him.
Suddenly, Diderot had more money he could spare. And to reward himself, bought a new scarlet robe. And this was when everything went wrong.
The scarlet robe was so beautiful that he noticed how out of place it seemed when surrounded by the rest of his common possessions.
“There’s no more coordination, no more unity, no more beauty,” were his words when he looked at his robe and the rest of his items.
Thus, the philosopher started buying new things to match the beauty of his robe. He replaced his old rug with a new one. He decorated his home with beautiful sculptures and got himself a new kitchen table, a new mirror, and a new leather chair.
This behavior would later be described as the Diderot Effect.
The Diderot Effect
The Diderot Effect is a phenomenon that describes how acquiring new possessions can lead to a spiral of consumption.
The idea is that obtaining a new item can create a desire for related or complementary items, leading to further purchases of unnecessary things just to feel happy or fulfilled.
It affects all of us and can manifest in various ways in our daily lives.
It happens when you buy a new phone, which leads to buying a new phone case, screen protector, new earbuds, charger cables, a new power bank, and other accessories.
A friend just bought a new car, and shortly after, bought various car accessories, and even new clothes and shoes to match the image in his mind that’s associated with someone who drives a new car.
Moving into a new place can also trigger the Diderot Effect. You might feel the need to buy new furniture, new home decor, or more subtly, upgrade your lifestyle as a subconscious reaction to living in a new place.
The Diderot Effect can be a double-edged sword.
On one hand, it can lead to increased consumption and spending, which can be detrimental to our financial well-being. On the other hand, it can also lead to increased satisfaction and happiness as we acquire new possessions that align with our desired image or lifestyle.
How To Deal with the Diderot Effect
To avoid falling into the trap of the Diderot Effect, it’s important to be mindful of our spending habits and to consider the long-term consequences of our purchases.
Before making a purchase, it’s essential to ask ourselves if the item is something we truly need or if it’s just a fleeting desire.
On a more positive note, the Diderot Effect doesn’t have to be always negative as it can also be used for self-improvement.
One way to use the Diderot Effect positively is to focus on upgrading our habits, rather than our possessions.
With your new car, try to focus on upgrading your driving habits to be more eco-friendly. Or instead of buying new furniture for your new place, focus on upgrading your cleaning habits to maintain a cozy and organized home.
By using the Diderot Effect for self-improvement, we can shift our focus from material possessions to personal growth and development. This can lead to a more fulfilling and satisfying life and a more sustainable financial future.
Final Thoughts
The Diderot Effect is a phenomenon that describes how acquiring new possessions can lead to a spiral of consumption.
It can manifest in various ways and can be both beneficial and detrimental to our well-being.
By being mindful of our spending habits and considering the long-term consequences of our purchases, we can avoid falling into the negative effects of the Diderot Effect.
Furthermore, it would be better to use our new purchases to trigger self-improvement instead. Let the Diderot Effect inspire us to learn good and better habits.
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