New Frugality Won't Last, We Are Natural Spenders

As many of us recieved pink slips, see our investment portfolio drop, realize that our stock options are now worthless and our home equity dissapear, unbridled consumption became very unfashionable. The new "In" is now frugality. You hear this word being thrown around in the a lot in the media. Frugality is defined as being economical in use or spending; carefully saving or sparing; not being wasteful.

It is now fashionable not to throw your money around. Instead, you try to get the most value for your dollars by spending more frequently at discounters and eating in more often. Impulse buying is out and planning your spending is in. Every dollar will be scrutinized. Rather than buying the premium brands, you go for the store name brands. You do bulk buying to save on price and also make less shopping trips. Instead of flying down to Aspen for a ski vacation, you instead will be skiing at your local ski hill. At least your thighs won't be burning by the time you reached the bottom of the run.

The reality is that we are natural spenders. We only embraced frugality when we were forced to and are uncertain about the health of the economy. Lets face it, we rather dine at a good steakhouse than go to MacDonalds. If we were really frugal, we would forgo our cell phones, video games and cable TV. Instead of going camping, we rather stay an some nice resort somewhere in the islands.

Let's face it, by the time the economy turns around, we will go back to our old spending habits. Good and bad times do not last forever. Being frugal may be fashionable now but in will be soon old news. Remember the last recession when grunge fashion was in? If we want to know what being frugal is, we should look at the spending ways of those who lived through the 1930s Great Depression.

On the bright side, it is not different this time. Everything goes in cycles. There will eventually be light at the end of the tunnel. We should keep in mind that once the economic recovery does come, we are unlikley to see the easy credit that fueled our unrelentless spending. Once the consumer does come back, investors should look at the stocks of companies that are considered the best of the best. Some of them are Apple, Honda and Target.