"It’s Hip to Be Spare" – How Frugality Has Become the New Fashion | Credit Withdrawal

"It’s Hip to Be Spare" – How Frugality Has Become the New Fashion

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If you grew up during the 1980’s, you’re familiar with the term ‘Conspicuous Consumption’. It was the age of The Yuppie Generation, preoccupied with the acquisition and flaunting of wealth. The BMW was the car of choice. Power suits, corner offices, and Republican dinners were a requirement for the up-and-coming young professionals of that time.

It was the Reagan era. The time when everything seemed to be ‘going right,… finally’. Pres. Jimmy Carter had been defeated, and the country was coming out of some heavy doldrums that included $1.75/gallon gasoline (oh no!), stagflation, high unemployment rates, and mortgages with interest rates hovering around 14%.

Fast forward a few decades, and we find ourselves in a strangely similar situation. Pres. Elect Barack Obama is set to take office, bringing with him, if not solutions, at least a feeling of anticipation and hope. Sen. Obama is facing a presidency with two on-going wars, an economy in the throes of an economic disaster, and following a president with some of the lowest approval ratings ever recorded. That’s no easy position to be put in, no matter what political affiliation you have.

Seems Eerily Familiar

Our similar situation here, with high gas prices, high unemployment, and a floundering economy, has caused another fashion trend to take root. The Frugality Trend.

Where it was once ok to go out and buy whatever you wanted, today there is a growing sense of peer pressure to not buy anything. In many cases, this is simply due to necessity. With hundreds of thousands of people out of work and businesses either declaring bankruptcy or shutting down entirely, budgets have to be cut and spending naturally goes down.

But for those with steady jobs and disposable incomes, there is an increasing trend NOT to spend money. People are saving their money at rates that haven’t been seen in decades. The U.S. could possibly reverse the recent trend in personal savings (we currently save a ‘negative’ amount, meaning on average, we spend more than we make).

In the short-term, this lack of spending is actually causing more economic problems, as the flow of money out of the system makes it harder for goods and services to be produced. No buyers of goods, people get laid off, businesses go out of business. It’s a self-perpetuating cycle. This re-adjustment in lifestyles is causing a larger re-adjustment in the financial sectors, as businesses deal with consumers that have all but stopped consuming. Not a pretty picture.

Moving into Mainstream

The public relations firms and much of the media are already picking up on this Frugal Trend. Frugal living blogs, like my friend Lynnae over at Being Frugal.net are seeing speedily increasing readership, as people adopt the low-cost lifestyle. Coupon clipping and bargain shopping are moving back into mainstream, with lots of success stories starting to appear on major media outlets.

This New Frugality is long in coming. The United States has been a country of consumers, many living well beyond their means, for years. The mortgage bubble, and the economic crisis we’re now in are due primarily to a combination of people ‘living large’ and financial institutions willing to help them to do so. Our ‘fast food’ mentality means that we’ve turned into a nation of impatient people. We want it our way, and we want it now!

The New Frugality

So how does this New Frugality affect us? People are beginning to scale back their lives. To take control of their finances and their lifestyles. The vacation in Maui is turning into the vacation down at the lake. The Godiva chocolates are becoming the Hershey chocolate bars. Everyone is taking a hard look at what they ‘thought’ was import to them, and re-thinking their value.

Could this lead to families actually doing things together again? A large-scale adjustment of our value system might be a good thing. Spending time with family and friends isn’t expensive, and is much healthier for you than doing a little ’shopping therapy’ by yourself. Reconnecting with people instead of things could be one of the greatest benefits of this new fashion phase.

One final thought. With all the economic problems we’ve been having, I personally think that it has focused everyone on a common problem. Working as a team, trying to solve a common dilemma, and coming together, can’t all be a bad thing. As bad as things are now, I think we’re going to come out of this much stronger as a people, after stripping away some of the rampant materialism that has been distracting us from the truly important things in life.

What do you think about this new trend towards frugality? Is it a flash-in-the-pan, or a worthy movement? Are you joining in? Leave us a comment and let us know.