By Jill Fraser

Lines in the sand have been drawn regarding ‘what’s in’ and ‘what’s out’ in financial fashion. The result reflects a general sense of uncertainty about what lies ahead and major shifts in political and social correctness.

The three biggest issues driving today’s lifestyle changes are economic, climatic and technological change, all of which are impacting radically on our collective hip pocket nerve.

“Frugality could become sexy again,” says Dr Doug Turek, Managing Director, Professional Wealth Pty Ltd. “The economic party is over and our finances need to sober up. As a society we have taken on an incredible amount of debt; as a proportion of GDP it’s unmatched.”

Turek notes that the word frugal is derived from the Latin word, frugalis meaning virtuous. He argues that advertisers, whose success is dependent upon rampant consumerism, have skewed the definition and turned it into a dirty word.

“But the real origin of the word is now coming to the fore and people are beginning to recognise the virtue in possessing only those things that bring them true happiness,” he says suggesting that flaunting wealth might become a “dangerous” habit due to the growing number of victims of rising unemployment and the high cost of staples.

Conspicuous consumption - designer clothes, sports cars and expensive home renovations - will be replaced by discretionary spending, says Turek.

He argues that an indication of this changing trend is the fact that the marketing term “masstige” (prestige for the masses) is already on its way out.

With consumer confidence hitting a record 15-year low and customers demonstrating a reluctance to take on unsustainable debt, Mortgage Choice’s National Corporate Affairs Manager, Warren O’Rourke says that 100% loans will dwindle in popularity and the concept of “genuine savings” is likely to see a return to favour.

Risk and high leveraging could become social no-no’s, says Fat Prophet equity analyst, Colin Whitehead.

Now that the long period of readily available cheap credit has come to an end Whitehead thinks that from a consumers’ perspective that means a period of de-leveraging is needed. “A contraction in the consumer sector is a healthy process,” he says.

“The celebrity culture, where everyone was out buying the latest labels and had no concern about debt is going to be a thing of the past.”

Michael Morrison, an expert on consumer and retails trends and retail course director at Monash University says small businesses will soon be ably competing with national retailers because the 'village economy' is destined to transform the Australian landscape.

“Small is beautiful and big is out”, says Morrison maintaining that rising petrol prices, heightened security issues and the liberating effect of technology are prompting a move to smaller communities and local shopping and entertaining.

Big, “box-like” regional shopping centres are on their way out, he declares.

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