Avoiding Conspicuous Consumption At All Costs

In the face of the current prolonged recession, frugality has become the new social norm. Sales of high-end goods have fallen off a cliff, and even consumers who have not felt the effects of the recession are cutting back on spending. In a time when shopping for clothes at Target is considered too much of a luxury, it seems that a class of consumers has emerged - individuals who don't want to abandon their materialistic ways but who wish to escape the ire of their peers and avoid conspicuous consumption at all costs, often by lying about the prices they pay for their upscale items so as to seem cost-conscious deal mavens.

Let me give you an example. My friend "John", a male in his late 20s, recently booked a trip to Australia for late April/early May that cost $1,200, inclusive of airfare from California to Brisbane, a domestic flight from Brisbane to Sydney, and a one-week hotel stay. Instead of thanking his lucky stars for being able to land such an awesome deal because of the effect of the recession on bleeding airlines and hoteliers, John began to complain to me via Gtalk that he was starting to feel that "the trip might not be worth it" and that he was afraid that "the $1,200 could make the difference between life and death" if he were to become hungry and homeless.

I then reminded John that he recently spent close to $1,000 on a Prada messenger bag and did not lament about that purchase, and that the current complaints seemed to indicate an inconsistency in his behavior. (I was being kind in not mentioning the $900 Burberry coat, $1,200 Ermenegildo Zegna suit, and several hundred dollars of shoes that John has also recently acquired.) In response to my observation, John claimed that he had only spent $500 on said Prada bag. This disturbed me greatly, since I remember very clearly when John showed me the bag on a website a few months ago and told me that he purchased the bag for $900, less a 10% discount.

The next day, I told John that this issue was bothering me, and that it would make me a lot more comfortable if he could check his credit card statement to make sure his $500 claim was accurate. John's response was: "Well, maybe the $500 was a little bit of an underestimate, but I'm sure the actual price was much closer to $500 than $1,000." Unsated, I repeated my request for him to double-check. After what seemed like an eternity, I finally received a Gtalk message stating that he paid $794 for the bag. "Does that include shipping?" I asked. John gave a negative response. "Well, how much did it actually cost you, after shipping?" was my follow-up question. "$812," John replied, more than slightly flustered.

The reality of the matter is that $1,200 for a one-week (excluding flight time) trip to Australia is an amazing deal that one could not in his (or her) wildest dreams have imagined to land but-for the current global recession. I confirmed that John was not understating the cost of his trip by checking the prices on Expedia.com. I remember when I went to Australia three years ago in the dead of the Southern Hemisphere winter, I paid $2,200 for a roundtrip flight from New York to Brisbane and close to $150/night for my hotel. (All prices are in US dollars.) I find it sad that John would complain about the cost of an incredibly low-priced vacation while trying to mask the depth of his shopaholism.

Incidentally, John is a former hedge fund manager who left his job to return to graduate school after receiving a "measly" $10,000 bonus in 2008.