Six Tips to Fight the Diderot Effect in Your Kitchen and Home

In our last post, we defined the Diderot Effect, and discussed how it can cause us to spend far more money than expected when we undertake any upgrades or renovations in our kitchens and homes.

Today we'll go over a handful of solutions that will help you resist this pernicious consumer trap.

Solutions to the Diderot Effect:

1) Defer the Initial Upgrade
Any major big-ticket purchase decision, whether it's a new appliance, new furniture or any other new kitchen feature, can potentially set off an entire chain of Diderot-related upgrades in your home. Therefore, the best way to inhibit Diderot Effect costs is to defer that initial big-ticket purchase.

Take your time making any major buying decision. Do extra research in the meantime to make yourself a better-armed consumer. Put the purchase off for three months and then see how you feel. You never know, you might find that you don't need the item as badly as you thought and you can defer the purchase still longer.

What I like about the concept of deferring a major purchase is that it doesn't mean never. It means sometime in the relatively near future. And the key advantage of deferring a Diderot Effect item is this: by postponing the initial purchase, you postpone the expense of the entire chain of additional purchases too. Finally, a deferred purchase means more money in your pocket today that you can save, invest, and perhaps spend more wisely tomorrow.

2) Don't Over-Upgrade
But what if one of my critical home appliances breaks down and I don't have the option to defer a purchase?

Great question (even if I did ask it myself). If your refrigerator breaks, I don't expect you to defer replacing it and subsist on rotting food for a year. You have to have a fridge.

But do you recall the example of the Sub-Zero refrigerator from our last article? That's an excellent example of an over-upgrade. It's an extremely high-end appliance, it's distinctive-looking, and as a result it's likely to stand out like a sore thumb in any average kitchen. Guess what? That is like pouring gasoline on the Diderot fire. That fancy fridge looks so out of place, you'll simply have to upgrade everything else.

When you're shopping for a critical home appliance, don't go straight to the highest of highest of high-end products. You'll find that if you bias any major household purchase down a notch or two in luxury, that item won't stand out so radically in your home. Result: you'll be better able to resist the pull of the Diderot Effect.

One important note: I didn't say to bias down the quality of the item. Casual Kitchen readers know that there is often a highly tenuous relationship between price and quality for most kitchen items, foods and appliances. You will obviously want a quality product that lasts, and that's where you can make good use of the extra product research you did during your deferral period.

3) Consider All Potential Costs of a Big-Ticket Purchase.
There are three types of consumers, each with a different way of considering the cost of major purchase: A naive consumer thinks of the cost of a big ticket item in terms of that item's monthly payment. A smart consumer considers the total purchase price, and thinks of that total price in terms of possible alternative uses for that money. A really smart consumer will also think about all possible ancillary costs--including Diderot Effect costs--that this item may eventually generate. Needless to say, this third type of consumer is likely to make the best long-term purchasing decisions. We'll talk about how to arrive at a rough estimate of Diderot Effect costs in the next tip.

4) Estimate Future Diderot Costs by Using a Multiplier
A good rule of thumb is to use a price multiplier of 5-7x of the cost of the first big-ticket purchase or renovation to your home. Of course, you might spend more or less depending on the circumstances (our refrigerator example in the last post had a theoretical multiplier of 10x). If it makes you queasy to think about eventually spending that amount of money, don't worry, it just means that this tip is working perfectly. Go back to Tip #1 and consider deferring that initial purchase.

5) Surround Yourself With the Right People
Most of us are well aware of how the clothes we wear, the cars we drive, the homes we live in, etc., make de facto statements about our values and our social class. Unfortunately, a key reason why we impose Diderot Effect costs on ourselves is our fear of what our neighbors or our friends might think of us.

It follows, then, that if you try to surround yourself with friends and peers who aren't all that concerned about the cars they drive or cost of their countertops, you'll have less reason to mindlessly waltz down the Diderot path. And remember, your real friends are happy for you no matter what you have.

6) Recognize the Cycle of Work and Spend
This is an admittedly general tip, but it gets to the root of why so many people are powerless to resist the Diderot Effect. The work and spend cycle is a powerful and effective trap for consumers--so effective, in fact, that Americans at every socio-economic level spend all (or worse, more than all) of their discretionary income on fundamentally meaningless stuff, having no idea that they're caught in a trap at all. Life is meant for so much more than working too hard to make money that you mindlessly spend.

I've said this before and I'll say it again: If we collectively rethink this point and only this point, I believe we'll be much better off as a culture.

Related Posts:
Spending to Save: Frugality and Expensive Food
How to Enjoy Wine On A Budget
Make Your Diet Into a Flexible Tool
Brand Disloyalty

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1 comment:

Totalrenovering said...

Thank you for the helpful article like this. And thank you also for the tips this is very useful. Congrats and keep up the good work.