Uncensored Money Season Five: When is enough, enough? Mel and Lawsie discuss overconsumption and its effect on our finances.

Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 26/02/2024

Show Notes

In this episode of Uncensored Money, Mel and Lawsie discuss unintentional overconsumption. And how it can leave your closet bursting, and your wallet empty.

Books and resources mentioned in this episode

• My Financial Adulting Plan
• Regrets for my Old Dressing Gown

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Transcript

Mel: Hey everyone. I'm Mel Brown. I'm an ex-accountant and ex-financial advisor, so I have the theory, but I also have the life experience. I'm now financially independent in my own right after coming back from less than nothing in my early thirties. I want this podcast to be like a chat with your girlfriends about money. My aim is to help you discover why you're behaving the way you are with money, to suggest new ways you might behave that are a better fit for you, and to increase your financial literacy and financial confidence. I hope it inspires challenges, educates and empowers you with how you do money. So let's get into it. Welcome to Uncensored Money.

Mel: Imagine you've just bought a new top and you are so in love with it. Maybe it is one you've been stalking online, maybe you've seen someone else in it and you have just been in lust with it.

Mel: Maybe it's something that your favourite designer has put out or your favourite shop online store. But it's turned up and you are obsessed with it. And when you put it on, you didn't intend to buy a new jacket to go with it. In fact, you were perfectly happy with the jacket you owned until you put it on with that gorgeous new top. But now you think the top makes the old jacket look kind of worn and dated. So you buy a new jacket which leads you to assess your shoes. So you buy new shoes and maybe new jeans 'cause you may as well have the whole outfit look amazing before you realise it. You've gradually created a whole new wardrobe, new clothes, new you, right? And maybe an empty bank account. You might go huh? But let's, we could do the same scenario with a new couch.

Mel: You've bought a new couch and you love it. It's so lush and new and the perfect color and it just needs a few pillows because the old ones now look tired on it and when the pillows arrive, the coffee table just doesn't quite look right with it. Now it looks a bit scuffed and really dated and the rug once the coffee table go on it, well it looks a little drab compared to this new little moment that you've created and the walls now aren't quite living up to the couch vibes and the artwork definitely doesn't work anymore. And now the entranceway when you walk to the lounge room, well that needs to be changed 'cause it just looks so old compared to this beautiful new room you've created. Can you see how you might not really have intended to spend the money that you did?

Mel: You only intended to buy a new couch but suddenly you've remodeled your whole room or house or apartment and are now in debt with assets that have already dropped in value. Or I could use the same example for back to school shopping and a new school backpack purchase might mean that the lunch bag used last year doesn't match and so a new one is purchased even though the old one works perfectly fine. What you might not know is this isn't a new phenomenon. This motivation to overconsume was noted by a French philosopher named Denis Diderot in the 18th century. Yeah, 18th century who wrote the introduction of a new possession into a consumer's existence will often result in a process of spiraling consumption. I mean that could have been written for today, right? Denis Diderot observed and noticed this in an essay he called "Regrets on parting with my old dressing gown".

Mel: In this fictional story, he receives a new elegant gown from his friend. And upon receiving the gown, Denis notices all his other possessions begin to look drab and faded compared to it. He begins replacing them, all of them, even the art on the walls. And by the end of this story, Denis notes, I was absolute master of my old dressing gown, but I have become a slave to my new one. Whether it's ro the couch, the lunchbox, the top or your own example. Because something new has been introduced into our lives, we are immediately drawn into this process of spiraling consumption and essentially become a slave to the purchase that we made. Lawsie, this is nuts, right? But I know I have seen myself do it. I have seen hubby do it. I've seen friends do it. Clients do it. What about you? Is this something that you have experienced?

Lawsie: No, I am like a little financial angel sitting on my perch and has never engaged in anything consumerist ever.

Mel: Happy just to judge others from afar.

Lawsie: Oh, very happy to judge. Very happy to judge. I don't think there's anyone that has not been affected by this. If you think about it, I know now I am very much less so affected by this, but if I was to look back to when I was in my twenties and stuff like that whole thing of buying a top or you get those shoes on sale and suddenly it's like, oh those jeans don't go with that and I want this and I want that. And before you know it, you're spending all this money compared to just the one thing that you were originally looking at. So I'm like, yes, absolutely, yes. Used to do that. And I think back then like it was far less financially and environmentally and socially and consciously aware. So you know, it was definitely cheaper items. So it didn't have the same impact as it might otherwise. Now was something that I might lust after, but it's, yeah, absolutely. I think we're doing that. And even when you're talking about the couch, I was laughing at you going, hmm, you did buy a new couch and hmm, you did get some new artwork, which was all–

Mel: I had the artwork beforehand.

Lawsie: I know. I think it's more like for me personally now I look at it and go, I'm far more conscious with what I would spend on, but let's throw a good old hubby under the bus because I think <laugh>, he's one that would absolutely get wrapped up into this. And if I'm to look at it from kind of a couple of examples recently, like I'm doing very exciting for you, a mountain bike course on the weekend. And I was like awesome. Like this is gonna be this great thing and really to do a mountain bike course, all I need to do is have a bike. I have the bike, it's no problem. The issue with that though is my bike is a few old and for a whole bunch of reasons I haven't really ridden mountain bikes for a lot recently.

Lawsie: And once I said to Adam, yep, yep, doing this course and whatever and he being the mechanic, he's, he is like, well you're kind of gonna need some new tires and you're gonna need this. And I'm like, do I need them? He is like showing me all the cracks on 'em. I'm like, okay, yes that is a need. I need a bike for this course that I'm signed up to but I need these tires. But what's really interesting in watching what he did, he's like so excited, loves any excuse to see me on the bike. So he is like, great, we have new tires, we have a new chain, we have God knows whatever else we need. And then he is putting it all together. He's just like, oh, check it out. Your bike looks so good and it's this and it's that. And I'm there looking at it going, I just needed new tires.

Lawsie: Like I'm the mechanic bike person. So I'm like questioning him on it and he's like, oh yeah, no, I bought fancier tiers. Like you need to have these fancier tires. I'm like, it's a beginner's mountain bike course. Like we are not doing the mountain bike World Cup series. But no, I have apparently World Cup series tires on my bike. God knows that's what I need. And the new chain and things like, and I absolutely get that there's wear and tear. But I look at that and go, yes, for Adam it was just open ticket of oh great, now I can spend money on her bike and suddenly boom, boom, boom. We would've spent way more money on like if it was me doing, I like great, can I just have some tires? Yes I need a chain apparently. Here you go. Fix it. Do whatever.

Lawsie: I find it really interesting for him. He's just very much around it is just that keep building, it's like great, yeah you got this thing but what else can we keep doing with it? But it was interesting, my own thought processes with it as well. 'cause I went, well hang on, I have some mountain bike shorts and I have a hydration pack as I'm going through the list of everything that I need to take. And then I was like, oh my mountain bike shorts are like probably 6, 7, 8 years old. I don't even know. I was like, oh casually they're just looking online going, okay, let's just see is there something else? Should I get a new pair? And then my bag, I'm like my pull bag has been trashed from pillow to post but it still works. Like it absolutely still works. And then having that conscious moment before we'd even spoken about this going, it is a mountain bike course, I'm paying the money to do the course.

Lawsie: Yeah. Go and have a great time learning these things. It really doesn't matter how old my mountain bike shorts are, it doesn't really matter that my hydration pack is trashed and will absolutely need to be replaced, but it doesn't have to be replaced for this weekend. Yeah. Like it's that thing of just being a whole lot more consciously aware. Whereas if I'd said those things to my husband, I absolutely have no doubt it would've appeared I would've had a new bag and I would've had the new shorts. I would've had everything. So that would've been delivered all over the last few days at home. Yeah, it is that real interesting thing. Whereas I'm so much more conscious around it for like a whole lot of reasons, not just financial reasons. Whereas he's like, oh no, like this is a thing I can spoil Lauren, I'm gonna dah dah dah and do all of these things. So it is absolutely still prevalent in our lives. And I think the thing with that is I'm just more conscious of it because of the space that we play and own goals and all those kind of things and and I'm just like, oh the bike. The bike suddenly the bike does look amazing to give it credit, it looks very good. It exceeds my ability and skill level for what I need for my little beginner's mountain bike course. But there we are.

Mel: But it's a beautiful example of buying an experience and suddenly the Diderot effect kicks in. This is purchase, this has purchased, this has purchased a couple of things absolutely needed, but it could very easily have spiraled to you spending hundreds of extra dollars.

Lawsie: Yeah, but you don't need to. And which is exactly that whole effect. Yeah. Which is really interesting but interesting. I think just from the two different takes on this one thing, like it is one thing of doing a course and then how we both have responded to it differently. Some for need and a lot extra for add-ons. Yeah,

Mel: My husband's definitely like Tony is definitely very not this and I find it really interesting. He's so not the person that would be sucked into this. He's very much the person that will say, are you sure we need this? Isn't this good enough? Like what we've got is good enough?

Lawsie: Kind of what mine would be?

Mel: Yeah, totally. I'm with you. I'm absolutely more conscious of it now that I would've been in my twenties and thirties and even forties, like early forties. But certainly like I saw it when we did our, our backyard. So we had a really nineties orange tiled black fenced moment in our outside and we spent money and got it all done up beautifully. And we had a wicker cream outdoor setting, which again perfectly good, but to our new gray kind of different vibe outdoor that we had done. I looked at it and went, Hmm, you don't go.

Lawsie: I don't like it.

Mel: Yeah. And it was perfectly fine. So we did sell it so we re-homed it for me. I absolutely would not have thrown it out, but I had to because we did that. It was, oh, but now we need the new outdoor setting and now we need a table. I definitely saw that happen with that, which I'm very comfortable with 'cause I like things aesthetically to look lovely, but 100% that played in.

Lawsie: But it's also, I think it's that whole being conscious and aware of it, like it's catching yourself in that moment and being able to go, yes, I know that that's setting can work perfectly fine and there's nothing wrong with it, but what I'd actually like is this. And as long as it's not to the detriment of your finances and other things that you're working on, then it's kind of like, well yeah, I think the whole with all of this, it's like, it's not saying that you can't spend and enjoy and to make things be what you want them to be, but

Mel: It's to be aware this is a thing. Yeah,

Lawsie: Absolutely.

Mel: So how do we break the cycle? So we've talked about what it essentially requires us to do. Breaking the cycle of the dro effect requires a change in our consumption habits and a shift in our perspective, which is kind of what Lawsie and I have been talking about today. But we wanna give you five practical ways that you can break the cycle. As you are listening, I know 90% of you listening have gone, oh yeah, I've done that. 'cause We are human and it's okay how we can break the cycle. Lawsie and I will take you through. And the first one is something we've already talked about is to be financially aware and to have mindful consumption and be aware of the snowball effect. So to make conscious decisions about your purchases, to consider the impact that they'll have on your finances and your life.

Mel: 'Cause What can start with a new top or a new couch or a new backpack can rapidly spiral to changing your wardrobe or room or house and what doesn't seem right 'cause what you have doesn't seem right with the new things that have brought in anymore. So your key defence against that is awareness. If you're aware that your purchase are being driven by the Diderot effect, it's about stopping, acknowledging that and then choosing what you're going to do. And inside the My Financial Adulting Plan at the moment, a lot of our peeps are doing a 30 day financial detox where it's choosing what you are not gonna spend new on of the next 30 days and question the motivation behind it. So that could be a beautiful way to stop the Diderot effect. That is simply, as we've talked about today, being aware that when you buy an experience, if you receive the invite to the wedding, does that really mean that you need a new dress and a new shoes, a new bag and new everything. If you purchase something, does it really mean that the next thing has to be bought? Or maybe you need to not bring that thing in if you know that's the snowball it's gonna have.

Lawsie: Yeah, and I think like the next point for that is, and it's quite similar, but the first point is very much looking at being aware that this thing exists and it can happen. And then the next one is to become aware when it is actually happening. So when you are in that moment, like you were where you're going, you know, we've already done the outdoor area, it looks beautiful and I'm now going, I'd like a new outdoor setting and couch and you know, all of those things. Or for me where I'm going really like that new hydration pack and I'd really like some new shorts, but I actually don't need them. And then to be able to go, okay, step back from that. Be going, yes, okay, I'm aware what I'm getting sucked into here, but it actually doesn't matter. And then to be able to put a stop to it or to then be able to make the conscious decisions around that.

Lawsie: Like I will ultimately make the conscious decision to buy a new hydration pack. It is not gonna be for this weekend. It's just making sure that, are you an actual need of that thing or that item that you're looking at it? Or are you doing it simply because something new has been introduced? So yeah, it's definitely the first two steps, being aware that this actually exists and the impact that it has, but also when you're in in the moment being aware that it is actually happening and being able to be much more conscious around it and make decisions that are right for you now and in the future.

Mel: Yeah, and definitely it's not beating yourself up when you're aware. So you might have bought the thing, you've bought the second thing in the spiral and you go, oh crap, I just did that. That's Diderot, I just bought that because of that. And instead of then buying the next natural thing, just stop at that moment and go, okay, so I did that. Oh wow, how interesting. But I'm gonna stop this spiral continuing and I'm gonna catch it earlier next time. So it's not beating yourself up as you see it happen. 'cause It's like anything, I've done it before <laugh>, I've said I'm not having chocolate this month. And then the chocolate will be in my mouth and I'm like, right, I forgot about that. Instead of beating myself, it's like, okay, so what am I gonna swap that for next time? It's stopping it and slowing it down for future.

Mel: The third is be aware of comparison culture and remind yourself that possessions don't define you no matter what marketers try to tell us. Consuming things because of their usefulness and whether they bring you joy, not their status and trying to impress other people. I am so aware that comparison culture undermines our finances so much more than other things do. If you are finding that the Diderot effect is being magnified by who you follow on social media and who you are comparing yourself to, maybe it's time to mute or unfollow those people so that you are not pushed into that. Oh, but I need to have that because they have that. And again, instead of buying something because you think, oh, this is simply what I have to have because I earn this particular income or because I live in this particular place, or I'm in this particular stage of life to stop and ask, is this actually useful?

Mel: Would this this actually bring me joy? Am I honestly just trying to impress someone else with this purchase that's potentially gonna put me in debt or risk my goals? And only you can answer that. But I think they're really important questions to ask. I've told this story before, and I've talked about this research before, but just quickly, there was research done in Canada. It was people that had won a medium-sized lotto wins. It was $150,000. And what they found was that the people that lived around them found themselves in debt and quite bad debt because what they were trying to do is look across and went, oh, it was conspicuous consumption and I want that. I should be able to have that too. So they were going into debt because they were comparing themselves and saying, well, I should have that too. And it's being aware of that and asking the question who says like who's dictating that? And being aware of what you want, what your goals are and what brings you joy. Not what am I doing to impress other people you probably don't like. If you're trying to impress them that badly, chances are you don't really care <laugh> anyway. And let's be completely honest, who you're comparing yourself to online, they're either potentially deeply in debt for that or they're receiving it for free. Let's just not try to keep up.

Lawsie: Yeah, no more keeping up with the Jonses.

Mel: Mm-Hmm <Affirmative>.

Mel: I don't know about you, but sometimes I wish there was an easy way, a silver bullet, a magical unicorn, a fairy godmother ready to grant me three wishes. I mean, think of all the miracle diets, fitness fads, promising a six pack in six weeks, or finance bros promising riches by following this easy formula. Do you believe a word of it?Well, the part that longs for a quick fix might be taken in, but you are smarter than that. Personally, what I believe in is consistency, educating myself, finding an expert to help me, surrounding myself with a community who are going to motivate me to keep going and make me feel like I can do it because they're doing it too or are further down the road than I am. That's exactly what we've created inside the My Financial Adulting Plan. If you feel like you're on top of your finances, you have a plan for this year that you're super comfortable with and have everything you need to make that happen, then just ignore this ad. But for the rest of you, make sure you check out my life-changing 12 week course or for less than the price of a cup of coffee a day. Head to the show notes to join the wait list for the next round. Or you might be lucky enough to find that the doors are open and you can join now.

Lawsie: The fourth tip is to analyse and predict the full cost of future purchases If a store's having a great sale on a new outfit, but if you're looking at it thinking that new outfit is gonna make me wanna buy new shoes and handbag to match it and all of those things, and obviously the total amount that you're gonna spend is far greater than that outfit that's on sale. So again, this is just another tip for you to be thinking. If you know that you are prone to this effect and doing these things where you know, it just snowballs into the top to suddenly half a whole new wardrobe to really stop and just think about it and go, okay, if I do this, I think some stylists and fashion people will have different tips on this, but there's that whole thing. If you're gonna buy something, make sure it goes with three things in your wardrobe.

Lawsie: Like it's all those kind of things and being able to do that. So you are being able to go, okay, if I do this, is it gonna go with things that I have or is it ultimately gonna lead me to spend more things? Which is totally okay if that's what you're wanting to do, but just being aware that one top might end up blowing out to the full wardrobe. And what is the cost of that and how does the cost of that actually fit into the goals that you've got for yourself at the moment and what you're working on as well as the goals for future you as well. So it's just that it's almost bringing you back out of the, oh my God, I love this particular thing. Take that bigger picture and really understand what the full cost of that's going to be. So then you can be like, okay, yes, this is acting within everything that I've got lined up, or no, it's as much as I might love it, it's gonna cause all of these things and therefore that's the reason why, just leave it and walk away.

Mel: And to your point with your trip, it might be, wow, this is only a $69 thing, but if it's gonna cost me 400 bucks to have this $69 experience, is that something I can actually afford? Or even if cost per wear or cost per use. So yes, it's this new outfit, but I'm also gonna want the shoes in the handbag because it's an event, so can I rent it instead? Because otherwise the cost per way is gonna be exorbitant and it's not worth it. So just make sure you're aware of the full cost of your purchases, not just the cost in the moment. And the last one is like, it's gonna be woo, but it's to practice gratitude. Take time to appreciate what you already have and be thankful for what the things that you already have in your life. If we just talk Simply Wardrobe, most of us only wear 20% of our wardrobe.

Mel: So what if instead of buying something new, your challenge was to wear what you already have for the next 30 days or even for the next week to wear something that you haven't worn over summer. That's what you have to do each for the seven days. And if you can't find anything, what's what the hell is it in your closet for? Because a lot of us have got so much stuff that we actually aren't aware, like we have so much stuff that it actually becomes a form of stressor. So therefore it's a if for some of it's, it's eliminating the stuff and being grateful for what we do have. And I think in times of rising cost of living and rising interest rates, it can really easy to lose that gratitude because of the stresses of life that we're in now. But I think sometimes it's even bringing yourself back to the reminder of, for most of us, we've won the lottery of life simply from the country that we live in. And sometimes it's even just that morning gratitude to go, you know what? I'm so grateful that I am living here in a country where I don't have to be worried when I step outside, where so much is accessible and attainable and I have so much abundance and to be grateful for that. And I think that's how gratitude is how we can sometimes combat consumption and comparison culture and more.

Lawsie: Yeah, absolutely. It's focusing on what you do have rather than what you think you have to have.

Mel: Mm yeah. And as two people that aren't necessarily glass half full people, we notice the glass half empty. We absolutely know this is something that we are prone to doing. So it's a reminder to ourselves. As a reminder to you <laugh>,

Lawsie: Oh, come on. I'm still my financial angel fairy sitting on my perfect little branch. <Laugh> <laugh>.

Mel: Good for you. So we hope that this made you realise that sometimes that consumption of a spiral is a real thing, that you are absolutely not alone. This has been something that an 18th century philosopher has picked up. This is something people have been caught up for hundreds of years. Add in social media, add in the ability to purchase 24/7. And this is why so many of us are financially struggling. Now that you are aware of it, it's pulling in those five tips that we talked about today so that you can bring awareness and break the cycle of the Diderot effect.

Mel: If you enjoyed this episode, we would love it if you subscribed and give us a review, then make sure you come and play with me on Insta. I'm at @melbrowne.money Remember there's an E on the end of Browne. I'm one of those fancy Browne's, and don't forget to check out the show notes for even more ways you can work with me to transform your finances.

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