How to earn your penny-pincher credentials

Millions of Americans are forging new responses to today's tough financial times. This economic crisis is serving as a warning siren, blasting many people out of their decades-long reliance on credit cards to fuel lavish lifestyles.

Americans in growing numbers are adopting new values-based lifestyles, focused not on an endless accumulation of possessions, but on a profound realignment of priorities.

This change is reflected in a January study on the American dream by MetLife. Attitudes toward work are radically shifting from job advancement to job stability. This concern cuts across all income and generational groups. Three out of 4 Americans reported that they have been affected by unemployment this year with either themselves, a neighbor, or a family member losing a job. While more than 70 percent of Americans remain optimistic that they will achieve their personal dreams, nearly half worry that they will not be able to sustain their financial security.

One adjustment likely to become permanent is a dramatic drop in consumer spending. That's reflected in a decrease in credit-card debt in the past two months. A renewed focus on personal savings and a commitment to rebuilding personal balance sheets has catapulted the national savings rate from zero in the middle of 2008 to 5 percent in January.

Americans are also fleeing the stock market, selling their mutual funds, and even migrating out of Treasuries to other safety areas.

"The situation is getting worse, not better. Quality becomes very important for investors," Mohammed El-Erian, CEO of PIMCO, told Reuters. "It's hard to say what inning you are in because the rules of the game are changing and you don't know whether you are playing a nine- or a 15-inning game. It is very difficult to call a bottom, as more than half of the job losses have occurred in the last four months."

Frugality has now become the fashion, with a surge of interest in a variety of tactics to stretch a dollar further – off-season vacations, early-dining discounts, and book exchanges, to name just a few.

Suddenly, what used to be negative epithets – miser, tightwad, cheapskate – are now almost revered acclamations. So if you want to earn credentials as a penny pincher, here are a some additional steps:

Share housing – According to a recent AARP recent poll on multigenerational living, 12 percent of respondents reported moving into shared housing over the past six months and 15 percent of respondents answered that they are likely to move in with another family member or friend this year. A change in job status or loss of income was frequently cited as the trigger for such action.

More important, over half surveyed expressed being comfortable with a shared-housing situation.

"Economic pressure to share housing is absolutely about saving dollars, but can be turned into a wonderful opportunity for families," says Elinor Ginzler, senior vice president of livable communities for AARP. "Be open in your expectations [regarding] contribution to expenses, child-rearing guidelines, and personal space."

People looking to share housing with nonfamily members can find learn more at nationalsharedhousing.org. To find a roommate, craigslist.com can be a good place to start.

Wear second-hand clothes – Both buyers and sellers are shouting the joys of consignment stores, where stylish, high-end brands and boutique labels are quickly purchased. Caitrine Callison, owner of Secondi Inc., in Washington, D.C., has seen a 15 percent increase in sales at her consignment store over the past year.

"Executive wives, political figures, and successful women executives are buying and selling," she says. "There is a very solid change in people's behavior – both the down economy and a sensibility toward recycling are spurring bargain-hunting for luxury goods."

Need some cash? Clean out your closet and bring your accessories, shoes, separates, and designer gowns to a consignment shop. After agreeing on a price, maybe even spend some of your new dollars on a previously worn version of that designer-label leather coat you have long desired.

Exchange services, not money – Willing to trade your time and talents for the skills of others? Prepare a household budget, change the oil in a car, or fix a computer. Unlimited opportunities to exchange services abound. Check in at your local grocery or coffee shop for bulletin-board listing or click on barternews.com.

Clip coupons – Some may feel awkward the first time they use coupons, but you will relish the savings. Thrift is in, so support your new talents at couponcabin.com.

Trim down on tech – Cancel your land line and use only your cellphone. Dial back the premium channels on your cable television or dare to return to relying on the public airwaves.

Rethink the travel budget – Can your household get by with just one car? Perhaps relocating nearer to a bus or subway station is worth consideration. Carpooling might turn out to be your next social network. You can also rent a car for a needed occasion, or by the hour. Try zipcar.com

• Dr. Kathleen Connell is a professor at Haas Graduate Business School, University of California, Berkeley.