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For consumers as a whole, Boss sees a collective psychology prevailing. "We ask, 'What are others doing, and what can I get for myself?' Nobody wants to admit that there's anybody they're keeping up with, but we do collectively keep up with one another."

Financial experts cite varied reasons for the lack of savings. Some are economic. Average weekly earnings decreased by 0.4 percent in 2005, according to the Bureau of Labor Statistics. Housing, healthcare, and education costs have skyrocketed.

Other reasons are cultural and attitudinal. "People don't remember the Depression," says Lewis Mandell, professor of finance at the University at Buffalo School of Management in New York. "People who are younger just really believe that nothing bad can happen to them. Either they think Social Security is going to be there for them when they retire, or they may feel that the government will never let them starve."

Losing a tactile sense of money

Another culprit involves the changing idea of what money is. "We have lost a tactile sense of money," says Rakesh Gupta, associate dean of the School of Business at Adelphi University in Garden City, N.Y. "We're using plastic now. It doesn't seem like money. When we have a roll of money that gets smaller and smaller, we think about where we should spend it. Now that we can whip out a credit card or debit card, the pool of money seems endless."

Popular culture plays a part as well. "People watch TV and think they have to live the life of characters on their shows," says DebtSmart.com creator Scott Bilker. "They start spending a little more."

That spending often marks a generational shift. "What our parents saw as luxuries, people our age see as little indulgences," Davis says. "My mother would never spend $5 on a coffee. Some people do this every day." She adds, "My parents are appalled at the way I justify my spending. I think, 'Why work and make money unless you're going to enjoy it?' That's a fine theory until you're 60, homeless, and with no money in the bank."

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