In a recession, cheap is chic

(Reprinted from cnn.com)

Jeneba Jalloh Ghatt is the first to admit that she likes nice things.

But these days when she passes the new upscale shopping area en route to her Chevy Chase, Maryland, office, she refuses to even glance at the lavish goodies.

“There’s a Ralph Lauren store, a Louis Vuitton store, Tiffany’s,” said the attorney and principal of The Ghatt Law Group. “I drive by and I don’t even look in that direction.”

With the economy in shambles and so many people losing their jobs and homes, it is no longer considered cool to brag about possessions and purchases.

For many during a deepening recession, conspicuous consumption is out and frugality is the new black.

“People have long used the way they shop and what they buy as a way to communicate with other people about their values, their tastes and their interests,” said Kit Yarrow, a consumer psychologist and professor at Golden Gate University in San Francisco, California.

“A year ago, what was considered the ultimate status symbol would have been the chicest bag or the most luxurious outfit,” Yarrow added. “Now what’s chic is being the most knowledgeable and efficient at saving money.”

Yarrow said that despite the tough economic times, there are many Americans who still have disposable income.

Those people are choosing not to spend, she said, or making more thoughtful purchases.

“What I am saying is that we have moved from an era of conspicuous consumption to an era of considered consumption,” Yarrow said. “People at one time wanted to showcase all of the things they are buying and now they are stopping and really thinking about it.”

Brett Wright, co-founder and chief creative officer of Uptown Magazine, is also seeing evidence of that attitude shift. iReport.com: What adjustments are you making to your budget?

His publication is targeted at what he terms the “triple A’s” — affluent African-Americans and those who want to be.

Wright said he is seeing consumption of big ticket items being put on hold or done more discreetly.

“Buying the new red Ferrari is certainly not in favor,” Wright said. “Everybody is trying to do things sort of under the radar screen. No one is looking to be as ostentatious as they may have been in the past.”

Consumers are looking for value for their spending, Wright said, and focusing on “How do you live like a king without having to spend a king’s ransom?”