Thinking about a luxury watch or your first fancy pair of shoes? Be aware of the “Diderot Effect” so nicely summarized in this Lifehacker post otherwise that single luxury splurge may cause a snowball of extra spending. If you’ve ever bought a pair of fancy new shoes only to come home and realize every other item of clothing you own is old, tacky, and in serious need of replacing, Mr. Diderot can explain why.
We’re experts at noticing tiny details, and the contrast of those beautiful new shoes highlights the faded, ill-fitting pair of worn-out pants you own. A nice clean pair of brand new tailored pants would look great! But this ratty old shirt, it’ll look awful next to a great pair of pants…uncontrolled, this cycle can continue until you’re back a square one, in a beautiful new McMansion wearing a scuffed up pair of shoes….
An example of this effect is shown in The Millionaire Next Door, where a retiring business partner finds out he’s to be given a Rolls Royce as a parting gift – he quickly realizes that car would alienate him from his blue-collar neighborhood, his casual clothing, his fishing trips, and the local Mexican joint. The Rolls Royce, in spite of being a superb car, would disrupt his lifestyle and likely inspire Diderot Effect-related purchases such as eating out in nicer parts of town, avoiding fishing trips, or moving to an upscale suburb.
If you’re seeking contentment as most COT readers are, make sure you consider the Diderot Effect before purchasing anything that would contrast negatively with your current possessions, friends, and lifestyle. Alternatively, as the article mentions, we can work to avoid such a strong identification with our possessions and instead focus our energy on positive relationships, inspiring work, and giving back. Identifying with relationships, community, and personal growth are key steps in overcoming an unreasonable focus on possessions.
Take Away: Before buying, consider what other purchases a single splurge might require or inspire. And if anyone attempts to give you a Rolls Royce….