With banks wilting, credit elusive, and retirement accounts slashed, this holiday season is going to jingle a little less than in years past. One survey by coupon site RetailMeNot.com found that almost half of shoppers plan to spend less on the holidays than they did last year, and TNS Retail Forward predicts that the season's spending will be the weakest since the 1991 recession.
While the newfound frugality will dismay retailers struggling to boost sales, it's actually, in many ways, good news. Strong consumer spending has helped drive the economy, but it has also drained family piggy banks. The average American is now responsible for over $17,000 in outstanding loans, excluding mortgages. At the same time, the holiday season's emphasis on shopping conflicts with the simpler lives that many consumers say they want.
In fact, there's evidence that the financial crisis is only intensifying a long-standing trend toward simplicity. Since the mid-1990s, pollster John Zogby has found that the amount people say they want to spend on holiday gifts has been dropping significantly. That's part of the shift toward what he calls "spiritual secularism," which describes the one third of the population that says it can achieve the American dream through spiritual fulfillment rather than material success. These Americans rank their families, quality of work, and values such as responsibility and respect for elders as highly important. "Their quest isn't for bigger houses and more cars; it's an inner search, a quest for spiritual meaning," says Zogby.
Tim Kasser, associate professor of psychology at Knox College and author of The High Price of Materialism, has found that people who opt for simplicity tend to be happier and more satisfied with their lives. His research on Christmas shows that those who focus more on family and religious experiences than on spending money and receiving gifts report being happier and less stressed than those who don't.
Kasser grows some of his own food, avoids television, and limits his work hours so he can spend more time with his family. To celebrate birthdays and the holidays, he, his wife, and two young sons exchange coupons for cooking meals for one another, giving backrubs, or spending a day together. "I try to give them experiences rather than another Xbox," says Kasser.
Stuff dusters. Rachel Meeks, creator of the simplicity-minded website smallnotebook.org, says scaling down material goals, such as staying in the same small apartment that she and her husband lived in before their daughter was born, improves their quality of life, as well as their finances. "So much of [people's] time and resources goes into our stuff, to organize, dust, clean, [and] fix it. When you choose to have less, the things you do have become more special, and you can focus on what's more important."
With more consumers trying to do just that, my picks for this year's "out" gifts include pricey jewelry, new cars, and LCD televisions. "In" gifts include cookbooks, museum dates, the promise of an afternoon spent together, and a DVD of It's a Wonderful Life. Not only will the bank-run scene feel newly relevant, but the film's entire message—to focus on what matters and appreciate what you have—will carry extra resonance.