Why We Buy More Stuff Than We Need and How to Stop It

Often one purchase leads to another. Think of the last time you bought a new outfit and realized your shoes did not match. So you bought a new pair of shoes. But then to finish the look you now need a new pair of sunglasses. Or the time you bought a new couch but realize that the other furniture you have is no longer adequate and then buy a new coffee table and rug to match.

In each situation, our current possessions are enough but because we bought something new, we were drawn into a process of spiraling consumption. It becomes a chain reaction of purchases. The subsequent purchases are not always related to the original purchase either. Once I get into a buying mood I’m likely to continue buying and then immediately regret it when my credit card bill comes in. This is called the Diderot Effect, named after the philosopher Denis Diderot.

Denis Diderot

Diderot, by Louis-Michel van Loo, 1767

Born in 1713, Denis Diderot was born in Langre, France. After receiving his education, he moved to Paris to study law but that was short-lived and in the early 1740’s he decided to become a writer and a translator instead. Once his father learned of this, he was disowned for not entering one of his father’s approved professions and thus Diderot lived a bohemian existence for the next ten years. He eventually contributed to the Encyclopédie, a popular French encyclopedia at the time. Yet despite his best efforts, he remained broke. At age 60, he had no way of providing a reasonable income.

With no money and needing a dowry for his daughter’s marriage, he decided he would sell his library. Upon hearing this, Catherine the Great of Russia arranged to buy it. She paid him 1,000 livres per year, 50 years in advance. Suddenly, Diderot had money to spend and shortly after he decided to treat himself to a new robe. Little did he know this one purchase would spiral his consumerism out of control. His life changed almost overnight.

The Diderot Effect

Denis Diderot wrote about his purchase in his essay, Regrets on Parting with My Old Dressing Gown. He explains in his essay, that after purchasing that evening gown, his other clothes seem plain in comparison. He then replaces all of them. Suddenly his furniture no longer matches his new clothes. He then buys new sculptures, new art, and a better kitchen table. By the end of the story he writes, “I was the absolute master of my old robe, but I have become a slave to my new one.” He eventually found his way back into debt again and died poor after living a life in poverty.

Once you understand how the Diderot Effect works, you can begin to break free of its hold.

Mastering the Diderot Effect

There is nothing wrong with spending money. It’s only when spending money is creating a detrimental impact on our finances and preventing us from achieving our financial goals when it becomes a problem. Most people are self-aware enough to avoid excessive purchases, but realizing why we feel the urge to spend more is key to keeping the urge under control. Here are seven ways that we can mitigate the Diderot Effect on our spending.

1) Be aware of the behavior. If you are feeling the urge to buy something else on top of your planned purchase, realize this is the Diderot Effect in play.

2) Avoid unnecessary purchases unless you need them. If you already own something that meets your need question if you need to upgrade it. Or, if it’s something totally unrelated, ask if this is the right time. I recommend implementing the 24-hour rule which is taking a step back and waiting 24 hours to see if you still have the urge to make the purchase. This can reduce the impulse urge.

3) Create a budget beforehand and stick to it. This can help keep you focused on the original purchase and avoid consequent purchases as they are likely outside of your original budget.

4) Buy things for their utility and not for self-image. The Diderot Effect often strikes when we buy something nice, say for example a new car. We then try to match this new image we have of ourselves by upgrading our other possessions to match. Buying new rims to add to the look or a new watch are examples of this.

5) Remember that purchases do not define you. This goes back to buying things to improve our self-image. It is okay to own something nice and not to have everything match. For myself, I own a nice condo but I drive a Honda Civic and wear H&M clothes and I’m okay with that.

6) Focus on more durable, cleaner, environmentally friendly goods. If we know we are susceptible to the Diderot Effect, we can change our spending habits to replace the stuff we own with longer lasting things.

7) Wait for a sale. Create a list of everything you want so that nothing should come as a surprise and then wait for a sale.

The seven steps above are easier said than done. Often we are not aware of this effect in action and come up with reasonable explanations of why we should spend more. James Clear, in his book, Atomic Habits, writes that “Our natural inclination is always to accumulate.” To counter the tendency, he recommends reducing exposure to “habit triggers.” This is hard because it is admitting to ourselves that we are susceptible to the ads that we see on a daily basis and in this day and age it’s hard to escape them unless we decide to live under a rock. As long as we are aware then that’s the first step in preventing unexpected spending.

Legal Disclaimer: The views expressed by Mr. Dumont on Money Sensei are solely his and not intended as investment advice nor a guarantee of any financial return. Mr. Dumont is not an investment or tax professional, so the information contained on the blog is not a substitute for professional advice. The contents of this blog are accurate to the best of his knowledge at the time of posting, but rules and laws are ever-changing. Please do your research to confirm that you have the current information.

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