The social phenomenon that can make you go bankrupt (Diderot Effect)

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In 18th century, French philosopher Denis Diderot wrote an essay titled “Regrets on Parting with My Old Dressing Gown.” In the essay, he mentions about a new gown that receives as a gift but soon realises that everything else that he owns doesn’t match up to gown. Next, he goes out and buys new things.

He writes –

“I was absolute master of my old dressing gown…but I have become a slave to my new one … Beware of the contamination of sudden wealth. The poor man may take his ease without thinking of appearances, but the rich man is always under a strain.”

Diderot effect, a social habit, comprises of two main ideas –

1) Goods purchased by consumers will be cohesive to their sense of identity, and as a result, will be complementary to one another.
2) Introduction of a new possession that is deviant from the consumer’s current complementary goods can result in a process of spiraling consumption

The second point may help you in understanding why IKEA and other stores sell its goods in room shaped “sets”

How to save yourself from it?

1) Buy things for their usefulness rather than their status.
2) Remind yourself that your possessions do not define you.
3) Analyze and predict the full cost of future purchases

And most importantly, be aware that it’s happening to you and avoid buying unnecessary new things.

Summarized up to 74% by Brevity from –  Understanding the Diderot Effect (and How To Overcome It)