Frugality is the New Black

Thrift & savings are back in style. No longer will you look at others in envy of their luxury & excess. Most will want to hide, and preserve, whatever wealth they have hoping it's enough for their later years in life. Whether you have (had) money or not, you won't be questioned about your thriftiness, you will be acknowledged & admired for it.

There is a SECULAR change happening. The theory of "if we advertise it they will buy it" is being challenged. The common notion that Americans will continue to consume at a rate well beyond their needs & ability is being forcibly changed.

The American psyche about how & what they need, want, desire...consume is changing. The concept of ever growing prosperity & entitlement has been replaced by a fear of having less & living a lower 'standard', maybe even not keeping up with the Jones'.

The damage of a generation of profligacy & excess is done. It is apparent that the baby boom generation, for all its good, has left an indelible mark on our country's financial health & has jeopardized its own retirement years. The next generation is watching & hoping the financial damage can be fixed before they retire. And, the younger generation is watching in horror & preparing carefully to make sure they don't end up with an even worse financial situation.

None of these 'generations' has lived "like their grandparents" did. I remember my grandparents always asking why we needed this or that or why we weren't using something longer or more thoroughly...you know, to "get the most for your money". That wasn't part of our thinking. IN fact, most of the time we were getting very little for our money, and didn't really care much about it. We thought their would always be "more where that came from".

My grandparents were always trying to "get the most for their money". We would mock them for their thrift & frugality...joking that they should stop being so cheap & enjoy their money (spend it). Well thank goodness they didn't listen to us, because when the passed away they had something left, which we got & enjoyed (spent) in short order.

The current economic situation has created a new dynamic. Wealth has been destroyed & careers have been interrupted. Every socio-economic class has been impacted. The government is trying everything to fix the situation, but we all know what has happened & that the future is going to be different. Changes are being forced upon the entire American population. Consumption behavior has changed & will be very different going forward.

The implications of this secular change in consumerism are enormous. One good implication is that in 5-10 years, we will have rebuilt our savings & financial security. Near term, this will cause considerably more economic damage in order to resize our retail complex.

The boom times have created a hugely overbuilt retail complex...from the manufacturing & supply chain to the marketing & store base...all of which will have to be 'downsized', some wiped out completely. The days of relying on the all mighty US consumer are over. Frugality is the new black.