In 2009, cutting back was cool. Whether thriftiness proves to be short-lived fad or an enduring trend remains to be seen.
An LA Times piece reports not only that “Being frugal is back in fashion,” but that the free-spending days of yore may be gone for good:
For economists, the shift is chronicled through reams of data that track indicators such as consumer debt and same-store sales. The national savings rate, for example, which lingered around 1% in 2008, has soared to 4.4%. Sales of “apparel and notions” have fallen 13.7% since January. Consumers are even spending less at the grocery store, according to the U.S. Census Bureau.
All the data tell the same story. People who spent every dime of their disposable income two years ago are now saving and paying down billions in debt.
Certainly, this demonstrates scaled-back consumer behavior over the last year. But I’m not so sure what this says about the future. Once the job market improves and people start to feel secure again, it’s likely that they’ll tire of skimping, and those recently formed support groups—in which friends encourage each other to stay out of the mall—very well may dissolve. There have already been reports of “frugal fatigue,” of folks bingeing in gluttonous shoe-shopping frenzies after going cold turkey for months.
As one economist in the LA Times’ story says:
“Conspicuous consumption doesn’t necessarily go away. Once people can afford it, they go back.”