Archive for the ‘Spending’ Category

Healthy Doesn’t Have to Cost More

April 12, 2013


Written by Sarah Mammarella, MS, RD, LDN, Family & Consumer Sciences Agent, Richmond County, North Carolina Cooperative Extension, North Carolina State University

As a Registered Dietitian and a community educator people often tell me they believe it costs more to eat healthy. But does it? In order to answer this question we must first attempt to understand what “healthy” means. Currently there is no specific and direct definition of “healthy”. However, we do know that eating foods that are low-sodium, low-sugar and low fat are better for us than their full-sodium, full-sugar and full-fat counterparts. In addition, research shows that eating whole grains, lean proteins, low-fat dairy and fruits and vegetables decrease our risk for many chronic diseases (i.e. diabetes, heart disease etc.). So, do these foods described cost more than their less healthy counterparts? The simple answer is not always. Research has shown that many foods that meet the above criteria, for example, skim milk, low sodium soup, sugar free canned fruit, etc. can be purchased without spending more money. However, there are other “healthier” foods that consumers must spend more to purchase. These include, lean ground beef, whole-wheat products and some low fat dairy etc.).

Although some “healthier” foods do cost more to purchase, there are some key tips that educators can share with the community to help consumers keep more money in their pockets.

1. Plan!
As educators we should urge all consumers to plan their meals for the week. Planning not only gives a guide to what we are going to eat, but it also decreases the likelihood that we will have to grab something from the nearest fast food or quick service restaurant. Planning foods to purchase from the grocery store also helps to keep us out of the “junk” food aisles and makes our grocery trip more effective and time efficient.

2. Get the most bang for your buck!
I always urge consumers to plan their meals according to what is on sale at their local grocery store that week. When we plan our meals around sales it is easier to look for the absolute best price in every food item that we purchase. We can also try to match up as many coupons as possible to the sales – which will help us get a better price. Coupons can be found on the Internet, in the newspaper and at the grocery store itself.. Some stores even double or triple coupons up to a certain amount – inform your community about this and have them check their store’s coupon policies. And do not forget about store loyalty cards. The cards are available at no cost to the consumer and offer real savings at the register on various food and non-food items that are on “special.” Loyalty cards offer savings on everything from fresh fruit and vegetables to cereals to meats.

3. Compare and contrast prices!
By observing the unit price, usually found on the shelf pricing tag below a specific food item, we can help the consumer become better informed. Basically, a unit price tells an item’s price per unit weight (i.e. price per pound etc.). By comparing unit prices people are better able to compare prices between different name brands as well as prices between different sizes of the same brand.

4. Buy in bulk!
Most of us know that we can normally buy food in bulk for cheaper than regularly sized food items. Buying bulk meats can especially help consumers to save money-as long as they know how to safely freeze these items in smaller packages. There are exceptions to this rule, which is when understanding unit pricing come in handy.

5. Buy Produce that is in season!
Buying fresh produce in season almost always decreases cost. This is a good way to increase fruit and vegetable consumption without also increasing cost. Although, frozen and canned fruits and vegetables are also good options. Other produce that is generally cheap all year round includes onions, potatoes, bananas, apples, carrots, celery and cabbage.

6. Make your own meals!
Many times when we try to cut time and effort by purchasing prepackaged meals, like frozen dinners, we spend more money. If we make our meals from scratch (or at least partially from scratch) we save a lot of money. Furthermore, foods made from scratch are often lower in sodium and fat!

7. Waste not!
As Americans, we often seem to waste food. But, wasting food wastes money. I encourage people I speak with to only buy foods that they know they will eat and not have to throw out. I also encourage people to always eat leftovers. Many people don’t like leftovers, but encourage them to be creative with using their leftovers. Leftovers can often be made in to different meals – for example, use left over chicken for a stir-fry or chicken salad, or use left over vegetables for a big pot of vegetable soup!

Eating healthy doesn’t have to cost more.

National Financial Management Core Competencies: Spending

How to cite this article: Mammarella, S. (2013, MONTH). Healthy Doesn’t Have to Cost More. Available at:


Goal Setting: Ending up where you want to go

January 18, 2013


Written by: Joan Reid, Family & Consumer Sciences Extension Agent, Granville County, North Carolina Cooperative Extension, North Carolina State University

Do you remember the following passage from Lewis Carroll ‘s “Alice in Wonderland”?  Alice came to the fork in the road. “Which road do I take?”, she asked.  “Where do you want to go?”, responded the Cheshire cat. “I don’t know” Alice answered.  “Then,” said the cat, “it doesn’t matter”.


What do you dream of having and doing? People of all ages dream about how they would like to live, what they’d like to buy and what they will do when they are retired. Smaller, near-term wants are often easier to attain, while, somehow, it seems more difficult to do the planning to reach long-term goals. If we remember that a goal is a dream with a deadline, we might be more inclined to invest the time needed to plan how we will realize at least some of those dreams.

Getting Financially Fit Is A Journey
Being financially fit is a complex process. It’s a journey that takes twists and turns. It takes constant attention to the road, making course corrections, as needed. Think of Dorothy’s goal to see the Wizard of Oz. Oz was her destination, but she didn’t take a magic carpet to immediately arrive. She was counseled to follow the yellow brick road. While following that road, she met with unexpected experiences and derailments. However, she stayed the course, learning along the way, on her journey to her final destination.

Getting Financially Fit Through Goal Setting
Goal setting helps individuals and families become financially fit. While goal setting is an easy enough process to understand, figuring out what stands in the way of getting it done might be the first step to successful goal setting. Of course, that is different for each one of us. How do these factors affect your ability to successfully set and monitor your goals? Are there other factors that get in the way?

• Long ago learned messages about money and spending.
• Your values about money.
• Lack of (or perceived) time.
• Not good with money.
• Don’t know how to set goals.
• Can’t stick to goals once they are set.
• Can’t resist the urge to spend.
• Just want to have some fun now.
• Don’t have enough extra money to make a difference.
• Can’t agree with others in the household.
• Will worry about it later.
• Stuff happens!

Once you have decided what you’d like to be able to do with your money and you are willing to work on it, you can use the goal-setting process to get there.

Luke Erickson, University of Idaho Extension educator, described the process of financial goal prioritization this way:   “Think of budgeting as building and maintaining a boat, something that keeps you afloat. Think of written, prioritized financial goals as a motor you add to your boat to provide motivation, direction, and ‘horsepower’ to get somewhere worthwhile.

Getting Started on Your Journey
How do you get started? You might start with your long-held dreams, like owning your own house, having children or starting a business. You might select goals around life events: children’s needs (education/expected marriages), your own further education, or retirement. Adding items from your “bucket list” (things you want to do before you ‘kick the bucket’) will give you plenty of ideas for possible inclusion.

It’s often easiest to categorize goals as short-term (within one year), intermediate (one to two years) or long-term (three to five years). Beyond financial goals you may include educational, social/relationship, health/physical, and recreational desires. Those goals may or may not require money to accomplish. Before continuing, you, likely, will want to prioritize your goals.

SMART Goals Prevent Derailment
Here’s where we distinguish goals from dreams. In order to keep it real, you’ll need to determine how your goals fit into your budget. If you don’t have a budget, you can use the “Your Financial Action Plan” fact sheet from University of Florida Extension. It contains a goal-setting page, also. Using the worksheets, you will need to identify your monthly income and all of your monthly expenses, organizing them into categories.

Now you are ready to plug some of your high priority goals into your budget. Writing SMART Goals will make them more attainable.

SMART Goals are:

S – Specific – You know exactly what you want
M – Measurable – What is the cost and how much will you need to save each month?
A – Actionable – What actions will you need to take to reach this goal?
R – Reachable/Realistic – Is this something you can realistically reach without getting frustrated and giving up?
T – Time – Achieve by what date?

For example, an ineffective goal:  I want to buy a house.
SMART Goal:  I want to buy a house in my current city with a mortgage of not more than $80,000 within 6 years. I will save $20,000 for a down payment and closing costs by saving at least $277 a month.

Now you can work the monthly amount required to save into your budget. Repeat the process with other goals. What if there isn’t enough money in your budget to set aside for your goals? If money is tight, you’ll need to identify spending leaks (unnecessary expenses). Rework your budget to find ways to reduce current spending to be redirected towards the goals. For example, if you buy lunch out everyday, you might want to carry your lunch most days instead. Calculate how much you will save and divert it to your goals.

How about:
•A cup of coffee purchased each morning on your way to work? Are you willing to make it at home instead?
•Fast food breakfast every morning? Breakfast at home is much cheaper.
•The candy bars/snack foods/soda you routinely purchase from a work vending machine? Can you bring snacks (healthy ones) from    home? Are you willing to drink water?
•Lottery tickets?
•Non-nutritious foods purchased at the grocery store?
•Your other impulse purchases? Beware of the effect of “chain purchases.”

One important goal is to save money from every paycheck, even if it is a small amount. The habit of regularly saving is more important and beneficial than the amount saved. You can always increase savings once the habit is started. Many successful savers follow the Pay Yourself First philosophy. They contribute to savings before paying the bills.

One barrier to saving is peer pressure from family, friends, and the media to spend. Remembering this quote, “If there is to be any peace, it will come through being, not having” (Henry Miller), can help us focus on what is important.

You’ll need to be vested in your goals to resist the enormous pressure from marketing messages to indulge in fleeting fancies. When you cave in to pressure to spend on items of lesser importance to you, you are giving up future needs to satisfy immediate wants. If you know what you want to achieve and treat financial goal savings as a fixed “expense,” you’ll be more likely to achieve success.

If you truly think you don’t have any money to save, try this exercise: Start with putting a penny the first day in a jar. Each day, double the amount so, the second day, you’ll put in the jar $.02, third day, $.04, fourth day, $.08, fifth day, $.16, etc. Now, if you keep doing that, do you know how long it will take to accumulate $1 million? Since most of us can’t put aside that much, stop when it gets too rich for you and start all over again with one penny. Now you have a nice emergency fund started. You can add that to a savings account or if you don’t have one, start a savings account.

It really is all about choices. We all have to make them and we all have to live with them. Not making a deliberate choice is a choice, too! So use focus and purpose to make yours count! Once you have converted your dreams into goals, all you need to do is follow your plan, like Dorothy following the yellow brick road to Oz, checking on your progress periodically.

Oh, by the way, it takes 28 days of saving as above to surpass $1 million. Can you find the National Financial Management Core Competencies in this blog? Leave a comment on the Core Competencies that you found.

National Financial Management Core Competencies in this blog: Spending, Saving

How to cite this article:

Reid, J. (2013, January). Goal setting: Ending up where you want to go. Dollardecisions blog.  Available at:


Taylor, D. (2012, March). Chain Purchasing: The Diderot Effect. Dollardecisions blog.  Available at:

O’Neill, B. (2011, February). The Importance of Financial Goal Setting.  Available at:

Your Financial Action Plan:, 10/09

The Folly of Holiday Stress

December 10, 2012

December 10, 2012

Written by: Deborah McGiffin, Durham County Extension Agent, Family & Consumer Sciences, North Carolina Cooperative Extension, North Carolina State University

No, no, no not ho, ho, ho.  Do you stress over your finances and spending during the holidays? Does holiday jolly seem like holiday folly to you?  Celebrating the holidays and other special occasions can often strain a families’ budget and cause them to expend large amounts of money and other resources. It’s no wonder that celebrating the holidays creates financial tension. Many people seriously underestimate what they will spend each year for holidays and special occasions. Spending can get drastically out of control with gifts, greeting cards, postage, gift wrap, decorations, food, drink, transportation, long distance phone calls, and other purchases during the holidays and can push a family into financial difficulty. The challenge of managing holiday spending is to enjoy the spirit of the season while avoiding the holiday financial hangover – that is, paying for it months or even years later. Keep the holiday spirit in and stay within your budget by using some of the suggestions below to help you plan, make the most of your resources, and avoid overspending.


Look at the Big Picture  Review your current financial situation and determine a holiday spending limit that works with your family budget. The amount of money you spend should align with your family values. However, it is generally unwise to spend more than 1%-3% of your annual take home pay on holiday expenses. Once you know how much you can spend towards the holidays, develop a spending plan.

Develop a budget for gift-giving, food, travel and entertainment expenses. Additional expenses which can increase during the holidays and are often overlooked include gasoline, babysitter fees, special grocery items, and eating out more often.  Use the North Carolina Cooperative Extension’s Holiday Planner to be sure to account for these extra expenses.

Make a List and Check it Twice  Refer to your spending plan and use a planner to list all the people you wish to give gifts to, including family, teachers, babysitters, hair stylist, etc. Also, list other holiday purchases such as decorations, ingredients for holiday cooking, greeting cards, expected travel expenditures and so forth. Using your list, make entries into the planner for spending amounts allocated for each recipient, the amount you actually spend and the gift item purchased per person. Take the planner with you when you shop to help prevent impulse shopping. Save this planner in a “holiday file” for reference for future holiday budgeting and planning.  The information from this year’s planner can be useful in establishing a holiday account for next year.

Shop without Financially Dropping  Consider how you plan to pay for your holiday purchases. If you decide to pay in cash, divide the cash into amounts you plan to spend for each gift, select items within the price range, and stop shopping when all the cash is gone. If you plan to use a debit card, take your check register shopping and record each transaction in it, so you track your spending, maintain a current balance, and avoid overdrafts. Depending on your bank’s automated updates, your balance may not always be accurate and transactions may not be immediately deducted from your account. If you plan to use credit for holiday purchases, evaluate your overall credit before shopping. Charge only an amount you can safely repay in one or two months. As a general rule, never have credit payments that outlast the item bought. Limit charges to one card to facilitate easier bill paying and to have a clear picture of your total spending. Another option to consider: layaway plans. Layaway plans allow you to pay for purchases ahead of time with cash, checks or debit and then take procession of the purchase once the items are paid for.  Though layaway plans enable you to buy over time without debt, you will need to plan ahead to make purchases early enough to take advantage of this purchase method.  If you decide to use store layaway options, be certain to check their return policy and keep track of all payments. Shopping online can save time and gas. Many sites have free shipping deals. If shopping online, look for coupon codes or cash back offers.  Some sites that offer such deals are,,, and A google search for “promotional code” using a retailer’s name might also help you find deals.  Plan holiday shopping trips to stores or malls ahead of time, study store ads, and know exactly who and what you are shopping for prior to entering the store and don’t forget to take along your holiday planner. Impromptu shopping trips and meandering in stores looking for gift ideas can lead to impulse purchases and a derailed budget. Do your window shopping at home from catalogs or online, so that you know exactly what you plan to purchase. Finally, remember that holiday sales can be tempting, so once you are in the store, refer to your planner and holiday list.  Remember to account for each purchase you make in the planner so that you stick to your spending plan.

Don’t be a Scrooge, Just be Creative  The best gifts don’t have to be expensive or even be purchased. The best gifts are fun, useful and chosen with the recipient in mind. Use your talent, skill and love to create meaningful gifts from the kitchen, garden or home.  The gift of time is a precious gift. Give certificates with the promise to fulfill a personal service for special loved ones. General purpose (VISA or MASTERCARD) gift cards are good choices for out-of-town giving because they reduce packaging and shipping expenses.  Instead of buying separate gifts for members of a family, buy one family or household gift everyone will enjoy. Drawing names is a good way to celebrate the holidays while reducing the number of gifts for a large family or group of friends. Giving family treasures or heirlooms is a good way to make the holidays meaningful and institute estate planning goals. Don’t forget about giving practical gifts like smoke detectors or motion lights.  Elder relatives who have “everything” may appreciate these helpful gift choices.  Giving to a charity in someone’s name in lieu of a gift is a way to honor a special person. Pictures of past family or festive events placed in attractive frames make inexpensive yet thoughtful gifts.  Though it may be too late for 2012, shop throughout the year for gifts, as good deals for items can be found during end of season sales.  Set up a special shelf or box to collect and store gifts bought months in advance for holiday or special occasion giving, and don’t forget to write down the name of the intended recipient!

Season’s Greetings  The time and expense of sending out holiday greeting cards can add anxiety to anyone’s schedule.  Look for ways to alleviate this stressful holiday tradition.  Send out cards only to out-of-town family and friends whom you see infrequently. Send holiday postcards instead of regular cards and envelopes to save on postage.  E-cards have become a popular way to save time and money and send holiday greetings to those you care about. Consider sending out “Happy New Year” cards in early January to add more time to your holiday schedule and to accommodate for diverse faiths and beliefs among cherished family and family members.

Deck the Halls  The best time to buy holiday decorations along with wrapping paper and greeting cards is after the holiday season. Try to take advantage of the after holiday sales and store decorations until the next season. Other options include creating decorations using items from around your home, like old ribbons, buttons, and greenery from your yard.  Make children apart of the holiday planning by asking them to make decorations and display their artwork.  Make your own wrapping paper using brown parcel paper or left over paper bags, stickers, stamps, glitter, glue and your imagination.  Let decorating your home be a fun and creative event that promotes family resourcefulness and togetherness.

Home Sweet Home  Family gatherings and holiday parties can add emotional stress and a financial wrinkle to your budget if you feel compelled to host them.  Make social events fun and enjoyable for you and your guests by co-hosting an event with another friend or family member.  For special celebrations, evaluate the need for a meal.  Consider alternatives like hosting a late afternoon party and providing only appetizers or sponsor a potluck dinner that involves others and saves on time, expense and personal stress.

Over the River and Through the Woods   Traveling and visiting family and friends can be the most expensive part of holiday plans.  Shop early for the best deals on airfares and hotel stays. Try to avoid travelling during peak travel times like on weekends or the day prior to a major holiday.  Consider gathering with out-of-town family several days prior or several days after a holiday to avoid heavily congested roads and airports.  Also, think about celebrating family events during other times of the year when travel discounts are more available and traffic less hectic.

Seasonal Giving   Remembering the less fortunate is an important part of many holidays. While a contribution of money is always appreciated, a donation of time is also valuable. A realistic and affordable charitable goal should be included in your holiday spending plan or a donation of time should be part of your holiday schedule. Make your holidays a time for living, laughing, loving, sharing, caring, and learning. These are the things that money can’t buy, but they make for precious, memorable and meaningful holidays.

Remember the Spirits of Holidays Past, Present, and Future   Remember, don’t throw away your holiday budget after the holidays. Keep it along with holiday receipts and credit card statements then make it a New Year’s resolution to develop a 2013 holiday and a special occasion spending plan in January that can be followed throughout the year.  Establish a dedicated holiday or special occasion account without an ATM card at a local financial institution.  This will enable you to set aside funds that can be used not only during holidays but also for other occasions like weddings, birthdays and anniversaries.  You also will have more flexibility if you come across great gift deals that can be purchased at any time during the year and stored away until you wish to give the gift.  Avoid holiday folly.  Put jolly in the seasons to come, and “ho, ho, ho,” holiday stress away.

National Financial Management Core Competencies: Spending, Saving, Borrowing

If using this post, please cite:, 

McGiffin, D. (2012, month). The Folly of Holiday Stress.  Dollardecisions. Retrieved Month, date, year, from


What is foreclosure?

May 23, 2012

By Jayne McBurney, Johnston County Extension Agent

Changes during the economic recession, rising fuel process and job loss have all made money management difficult. For homeowners, protecting assets in the wake of economic uncertainty has been especially trying; unfortunately, some have had to face foreclosure. What exactly does that mean?

When a prospective homeowner signs on for a mortgage, it is important to be sure that the household budget will support of paying the mortgage every month with each payment on time. Missing mortgage payments is not an option for a homeowner, and doing so could cost the homeowner more than just a place to live if the bank chooses to foreclose the loan. Foreclosure proceedings take place after a number of missed monthly payments have occurred. Missing just one payment will make you delinquent, but if you do not remedy the situation quickly, the bank can take back ownership on the home, that is, they can foreclose the loan.

Homeowners should let their lender, or loan servicer, know as soon as possible when they are unable to make a mortgage payment. Lenders are currently being strongly encouraged to try to work out loan delinquency with mortgagees and there are many incentives for lenders to modify and rework loans for homeowners. Government programs, such as can help homeowners who have been unsuccessful working directly with their bank.

If a homeowner is unable to make mortgage payments at all, or resolve difficulties in paying their mortgage, the bank might try to encourage a “short sale,” which gets the house on the market and hopefully sold before a foreclosure takes place. It is possible for a homeowner to remain in the home while the house is on the market (or is listed for sale).

Once a foreclosure is initiated, the owner loses possession of the home as well as any equity they might have in the home. A foreclosure may seem like an immediate answer to money worries, but these former homeowners will end up with a long-lasting negative mark on their credit report, appearing for several years. Foreclosure will significantly lower the former homeowner’s FICO score also. It is very important that current and prospective homeowners make their mortgage payment an inflexible monthly obligation in their finances.

The North Carolina Housing Finance Agency offers good advice for homeowners having difficulty making a mortgage payment:

  1. Don’t ignore the problem.
    The further behind on payments you become, the more difficult it will be to reinstate your loan and the likelihood of losing your home increases.
  2. Open and respond to all mail from your lender and the North Carolina Housing Finance Agency.
    The first notices you receive will offer good information about foreclosure prevention options. Later mail may include notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
  3. If you have requested a modification or other workout plan with your servicer, please confirm that your servicer has received all of the documentation required. If you are already in a trial modification, please verify that your servicer has received the updated income, expenses, and financial hardship information that are required to convert the trial modification into a permanent modification.
    If you are missing documents, submit them as soon as possible. Create a system to track the date documents were submitted and when calls were made to your loan servicer and other entities. Remember to write down the name of the person with whom you spoke. A calendar and lined notebook paper is all you need to create your record system. Homeowners who miss deadlines may lose their eligibility.
  4. Read your loan documents so you know what your lender may do if you can’t make your payments. If you meet with a housing counselor, bring these documents.
  5. Prioritize your spending.
    After health care, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payments. Look for optional expenses: cable TV, memberships, entertainment, etc. that you can eliminate.
  6. Use your assets.
    Do you have assets, such as a second car, jewelry, or a whole life insurance policy that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home. It is not recommended that you use retirement savings, however.
  7. Avoid foreclosure prevention companies and foreclosure recovery scams.
    If any firm claims it can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD-approved housing counseling agency.

You also should not have to pay fees for foreclosure prevention help – use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee for services that are offered for free through HUD-approved housing counseling agencies.

Any program that requires you to pay upfront fees to help you avoid foreclosure is illegal. The Office of the N.C. Attorney General provides help identifying and combating foreclosure scams.

Foreclosures that took place between Jan. 1, 2009 and Dec. 31, 2010 may be eligible for review. The deadline to submit a request for review was April 30, 2012. For more information, click here


National Financial Management Core Competencies discussed in this post:

Borrowing, protecting, spending, earning

Chain Purchasing: The Diderot Effect

March 19, 2012

By Deborah J. Taylor, Extension Agent, Orange County 

The vast majority of Americans are trapped in a “work and spend” cycle. As a society, we have at our disposal an abundance of material goods, which we have to work at an incredible pace to pay for. Many Americans spend more than they earn. Typically when Americans purchase one item, an upgrade of another item is required. This is referred to as the Diderot effect.

The Diderot effect is a social phenomenon related to consumer goods, which results in spiraling consumption (chain purchasing) resulting from dissatisfaction created by a new possession. The term was coined by anthropologist and scholar of consumption patterns, Grant McCracken, in 1988, and is named after the French philosopher Denis Diderot (1713-1784) who first described the effect in an essay. The term has subsequently come to be used, especially in discussion of sustainable consumption or green consumerism, to refer to the process whereby a purchase or gift creates dissatisfaction with existing possessions and environment, provoking a potentially spiraling pattern of consumption with negative environmental, psychological and social impacts.

For example, Jane buys a new couch for $400 for her living room to replace the old, donated one she’d had for the past 10 years. Now that it’s in her home, her living room chair looks shabby and outdated. Jane decides she must also replace this chair to complete her living room’s new look. However, once the new chair, which cost $250, is in place, Jane can’t help but notice how dirty and dingy the carpet looks beside the clean, new furniture upholstery. Jane decides to replace the living room carpet, but finds she’ll get a “better price” if she replaces all the carpet in her home. The total cost for replacing the carpet is $2,300. Jane’s original $400 purchase has now escalated into nearly $3,000.

For the unsuspecting consumer, the Diderot effect can be invisible in the marketplace. With the proliferation of commercials and other marketing strategies being thrust upon consumers around the clock, the insidious side effects can be far-reaching and damaging to individuals and families. Advertisers often look for people who are trendsetters to promote their products and get the ball rolling in influencing the masses to buy certain goods in order to follow suit. In every area of our lives, we are coerced into buying more items to supplement the new items we have purchased. If you buy a new dress, you will need new shoes or a new handbag. If you buy a new couch, you’ll need a new chair. Although some of this need to constantly “add-on” or upgrade” is driven by aesthetics, manufacturers also drive some of it. For example, in the area of electronics, old equipment may not be compatible with new equipment. An example: having to buy a new printer to go with a newly purchased computer because the connections on the old printer are not compatible with the ones on the new computer.

How can consumers avoid falling prey to the Diderot effect or chain purchasing?

  • Control your desire to purchase. Stay away from malls and other places where you may be tempted to spend. When you buy a product, think about how much “more” you’ll need to fulfill that purchase (more games for the game console, more accessories for the redone kitchen, etc.).
  • Create a new consumer symbolism, making it less attractive to be exclusive. Whenever you see a symbol of excessive spending, look at it for what it is: successful marketing. If you desire a certain item, ask yourself if you really need it.
  • Control yourself by placing voluntary restraints on competitive consumption. Not only encourage yourself, but also encourage your friends and associates to put caps on spending. Get involved in making group decisions and suggest spending caps. You’ll often find that others are relieved too
  • Learn to share. Consider sharing expensive purchases (like a lawnmower) with your neighbors. Consider rentals or secondhand items when shopping for sporting equipment and narrow-use items. Use your local libraries for books, DVDs and CDs.
  • Become an educated consumer and deconstruct the commercial system. Deconstruct every ad you see. When you see a product you want, research it and understand it before making the purchase.
  • Avoid “retail therapy”. Spending can be addictive. If a particular mood or event triggers a desire to shop, find other ways to spend time or relieve stress
  • Make time. Look for ways to reduce the time you spend working so you can increase the time doing things that are more valuable to you, and things that potentially can save you money. Choose activities to do with that extra time that don’t involve spending and consumerism.
  • Work toward coordinated intervention. Look for larger societal solutions to this issue. Get involved in organizations that focus on consumer issues and reducing spending. 


Brewer, P. February 27, 2012. Lifestyle Upgrades: Beware of the Diderot Effect.

Manning, L and Mahar, Carla  (2007). Teaching Your Children About Money. G1787, University of Nebrask – Lincoln Extension.

Schor, Juliet B. (1998). The Overspent American: Why We Want What We Don’t Need. New York: Basic Books.

Take Control for Your Future: Telling the Kids: We Need to Spend Less. North Carolina Cooperative Extension – March, 2009.

Core competencies discussed in this post: Spending, saving