Sometimes we catch ourselves spending money on things that we don’t even need, but because of that satisfactory feeling most of us get when buying something we just keep doing it.
The Diderot Effect which is named after French philosopher Denis Diderot, teaches that obtaining a new possession can create a spiral of consumption, which leads to acquiring even more new things.
Gary Fisher, the head of member education at Alexander Forbes Retail said, “You join a gym and suddenly you need colour-coded fashion accessories, supplements, and an expensive meal plan. Or you buy a new bedside table and then find yourself questioning the rest of your bedroom furniture. If we do not watch our desire to accumulate, we can easily fall into the debt trap.”
“The Diderot Effect tells us that your life is going to have more things fighting to get in it, so you need to understand how to curate, eliminate and focus on the things that matter, such as ensuring you have enough money for retirement or your child’s education. It is more important to have sufficient life cover in place to protect your family should something happen to you, or to be contributing regularly to savings and investment vehicles, such as a tax-free savings account or a retirement annuity, than to be driving a better car than the neighbour’s.”
Here are five ways that will help you master this phenomenon;
1. Reduce exposure. One of the quickest ways to reduce the power of the Diderot Effect is to avoid the triggers that cause it in the first place. Unsubscribe from commercial emails. Call the magazines that send you catalogues and opt out of their mailings. Meet friends at the park rather than the mall. Block your favourite shopping websites using tools such as https://freedom.to/.
2. Buy items that fit your current system. You don’t have to start from scratch each time you buy something new. When you purchase new clothes, look for items that work well with your current wardrobe. When you upgrade an electronic item, get compatible equipment so you can avoid buying new chargers, adapters or cables.
3. Cooling-off period. Give yourself pause for thought before spending money. Online purchases, in particular, can be impulse buys. Add an item to your virtual shopping trolley, but wait 24 hours before returning to complete the purchase. This will allow you time to consider if you really need the item.
4. Go one month without buying something new. Don’t allow yourself to buy any new items for one month. Instead of buying a new lawnmower, rent one from a neighbour or buy “as-new” second hand.
5. Let go of wanting things. You will never be done with wanting things. There is always something to upgrade to. Realise that wanting is an option your mind provides, not an order you have to follow.
Personal Finance
