Denis Diderot was a French philosopher and a writer. He was a famous man during his time and well known for his work in co-founding Encyclopédie, with Jean le Rond d'Alembert, which is one of the most complete encyclopediae.
He lived almost all his life in poverty. However, a change happened in his life in 1766.
In 1766, Empress Catherine the Great, heard of Denis Diderot financial issues and she offered to buy his library for 50,000 francs. He accepted the offer and Diderot had enough money to spend.
Assume you have spent 50 years of your life in poverty and you received $50,000 into your account. What are you going to do?
This is what Diderot did.
Quickly after receiving the money, he got a new expensive robe so that he would start looking good. When he put on the robe. He noticed great beauty in it, but none of his possessions/wears were good enough to fit with the robe. So, he had to start buying things that would have equal quality and match with his robe. He bought new shoes and other accessories.
He also noticed that there should be some changes in his house then he bought chairs, table, change his rug and he decorated his house with lots of sculptures.
After some times, Diderot sees the effects of the robe in his finance and he described these effects in his essay in late 1700+. In 1988, an anthropologist and scholar, Grant McCracken, described the effects extensively and called it --The Diderot effect.
According to Grant
The Diderot effect is a social phenomenon related to consumer goods. It is based on two ideas. The first idea is that goods purchased by consumers will be cohesive to their sense of identity, and as a result, will be complementary to one another. The second idea states that the introduction of a new possession that is deviant from the consumer's current complementary goods can result in a process of spiraling consumption.
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Anyone could fall in this effect.
There was a time that I received cash of $4,000. I was using a 12 inches Television. The first thing I did was to change the TV to Samsung 43 inches, then I noticed that my shelve, my sound system and the carpet were old to beautify the TV, and I changed them. I planned only for a TV, but the change caused a spiral chain of spending more.
This is common in everyone. When you buy a new gown, you think of the best shoe. You buy a couch then you think of the colour of your carpet, and the entire look of your house.
Human are always drive to get more. You have Reebok, you dream of Diadora, from that Puma and Nike. It goes like that. If you don't have a car, you may see Toyota as that car best suit for you but when you get Toyota, you dream of other big brands like Bentley and Ferrari.
Grant.
The second idea states that the introduction of a new possession that is deviant from the consumer's current complementary goods can result in a process of spiraling consumption.
This means, in life when you buy a new thing more things will be sneaking to enter your life, and you have to avoid such and focus only on the things you need. Parts of the solutions to this is to go for things that fit your current life. Expansion is good, but not at the expense of buying more.
Give yourself a spending limit. No matter what you see, shut your eyes to them. I have a close friend that owns a boutique. I used to go to his store at least twice a week because he is a very close friend, but I found myself buying clothes every week. Even when I say-- "friend I don't budget for cloth today, he would tell me to pick whatever I like and I can pay him anytime I feel too." I would but when it got to a point, I stopped going there and I noticed that I reduced the way I spend money buying clothes.
Thus, another thing is to reduce your exposure to things that would make you spend. If you note all these, you would notice a few or significant improvements in how you spend on things you don't need.
You don't need to reduce your life, but you may need to learn from Diderot's effects, and starts spending on things that matter. Poverty set in when you spend out of plan. Poverty has a remedy.
Thank you!
Resource: https://en.wikipedia.org/wiki/Denis_Diderot
