The murky financial outlook and recession fears are factors. Another driver: fear of being out of step with a cultural mind-set that increasingly says less is more. If your best friend and next-door neighbors are cutting back on little luxuries, shouldn’t you be, too?<\/p>\n
“For years, we had the opposite. It was all about keeping up with the Joneses. Now, the Joneses are starting to cut back,” says Ellie Kay, author of 12 personal finance books.<\/p>\n
The cold, hard numbers on the nation’s economic mood bear out that consumers don’t feel flush.<\/p>\n
Consumer confidence plummeted in February to its lowest since February 2003, which was just before the U.S. invaded Iraq. The Conference Board’s much-watched index of consumer confidence fell to 75 from 87.3 in January, the group reports<\/p>\n
“There’s a sense that prices are rising \u201d\u201d and will continue to rise \u201d\u201d but wages will not,” says Ken Goldstein, economist at The Conference Board. “This is squeezing household budgets whether they’re $200 per week or $200,000 per year. Folks are looking closely at anything they don’t have to purchase now.”<\/p>\n