Social pressure affects spending, saving patterns

04.18.09
By Timothy Jones

When it was popular to spend money on designer brands, celebrity chef restaurants and exotic destination weddings, many American consumers were quick to throw their money in the same directions.

According to an article in Money Magazine, George Mason University economics professor Tyler Cowen says that while "in-your-face-consumption" patterns may be so last year, the trend will eventually come back when the economy recovers.

Until then, says Cowen, individuals looking to spend less and engage in "other frugal activities" will find camaraderie this year as saving emerges as the new spending.

Building on this new found social acceptance of frugality, a MetLife study earlier this year showed that 81 percent of consumers considered a vacation a luxury and over 90 percent called restaurant dining a "perk."

More recently, financial services company Capital One reported that Americans are changing their daily spending habits to adopt a more savings-oriented outlook. Over 50 percent of consumers are cancelling or postponing vacations and 54 percent are clipping coupons.

These savings efforts weren't just lip service - 32 percent of those surveyed were checking their account balances weekly to track progress, reports the company.

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Friends' attitudes may determine how much you save