The Diderot Effect is something you may not have heard of, yet it definitely affects your daily life. It’s a social consumer phenomenon that is costing you a colossal amount of money, maybe even thousands of dollars a year.

The phenomenon is named after French Enlightenment philosopher Denis Diderot. Diderot first explained the effect in his essay "Regrets on Parting with My Old Dressing Gown," in which he tells a story of how he came in possession of a beautiful robe, and how this robe lead to his financial ruin. Diderot found that his new fancy clothing didn’t match any of his old belongings, and so he decided to upgrade all of his possessions to match his new, elegant style. However, this led to him falling into massive debt, as he spent all of his money trying to match his wardrobe, his furniture, to his new robe.

If this situation sounds familiar to you, then you’ve probably experienced the Diderot Effect before. You might have gotten a gym membership, and then needed to buy the best workout clothes. Maybe you bought a new car, and now you need seat covers, a car charger, and a new sound system. These are all typical of the way we consume or purchase things.

Consumption is an exponential process; once you buy one item, you're going to want more. The Diderot Effect simply amplifies this process. It states that once you obtain a new possession, you're going to end up wanting to buy more possessions to go along with it, and thus you create a spiral of purchasing things you didn't realize you "needed," or wanted. This is a simple, short explanation on why we want things we don't really need.

I used to think Diderot's effect didn't apply to me, but then I looked back and realized that it definitely has affected my life and purchasing habits.

After starting college (a big purchase), I realized that I wanted to change my appearance. I didn't need to buy new clothes or start getting better haircuts, but I decided to. Three years later, and here I am, wondering how much money I could've saved on things I didn't really need. I'm sure if you're in college, you can relate.

The best way to counteract the Diderot Effect is simply being aware of its power. We may not be conscious about purchasing things when we need to be, and that's what leads us to spending money we shouldn't be spending. Simply understanding what the Diderot Effect is can help you make smarter financial decisions in the future. Before you make a big purchase, think to yourself, does this fit into my life, or will I need to buy more stuff to go along with it? If your answer is the latter, then you might need to understand that this purchase will cost you more than you think. If you're buying a new pair of shoes that doesn't match the rest of your wardrobe, then you're not just buying new shoes; you're essentially buying a makeover.