What is the Law of Diminishing Return?

The law of diminishing return can be applied to many aspects of life.  To begin with, it’s important that you understand what it means.  The idea behind this law is that the more you buy or consume of the same item, the less rewarding or satisfying it will become.

Understanding the Law of diminishing return and identifying when you are experiencing it, can help keep you on budget.

Let’s look at a few examples:


How many times have you gone into a restaurant with your eyes bigger than your stomach?  I know we all have at one point or another.  But the difference is how we handle it.

Do you think it’s better to order 3 hamburgers (for all vegetarians please consider this a veggie burger for this example   ) all at once or is it better to order what you would normally eat (perhaps 1 or 2)?  The first hamburger that you bite into seems to melt in your mouth and tastes incredible.  The second one still tastes good, but not as good as the first one.  Now after the first 2 hamburgers, you are full.

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But what are you going to do with the third one?  You don’t want to throw it away and there is no one around that you can give it to.  So, of course, you eat it.  The third one has even less taste than the second one and to top it all off, you feel so full you can barely walk to the car.

After looking at this example, don’t you think it would have been a better choice to only order what you would normally consume (1-2 hamburgers), despite the abnormal hunger, and wait to decide if you should order the third one or not.

If you eat the first hamburger (or even the first two depending on your normal order) and then discover that you are full, you would have been more satisfied stopping here instead of stuffing yourself.  Buying less also helps you to spend less money.

Overall, the idea is to consume till you are satisfied and not exceed this point; this way you will feel better and spend less!

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This same idea came be applied to eating at home.  For example, you have food leftover from dinner.  You think to yourself, “There isn’t much left, I should just finish it now.”  By this point, you are already really full, eating the rest will not even be enjoyable.

The return on eating the food left is on a completely downward slope.  Perhaps a better idea, would be to save what’s left and bring it to lunch with a side item such as a piece of fruit.  This is what I find myself doing a lot of the time in addition to batch cooking.  This way I enjoy the food and experience less diminishing return and also save money.

Now I have lunch to eat tomorrow and don’t have to pick something up which can be more costly than cooking at home.


Have you found clothes in your closet that you bought awhile back and still have not worn yet?  Or do you see clothes in your closet that you have only worn once?  If you own too many clothes, you will also experience diminishing return.

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I used to be as a guilty as the next girl who liked to shop.  However, moving several times has taught me to change my habits.  The more you move, the less “stuff” you want to move, hence the less you want to own.   Learning this lesson has helped me to change my habits to buying less and utilizing what I have more.  This also helps me to stay within my budget and still buy a few nice things that I actually use instead of leaving in the closet to collect dust.

Next time you order food in a restaurant or are shopping at the mall, remember the law of diminishing return and how it can help you increase your utilization and save more money.

Have you heard the law of diminishing return before?  Will this now help you think differently before consuming?  What are your thoughts?

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