Old values for money

The global financial crisis is inspiring a major shift in our financial values, and experts suggest it's likely to continue.

A powerful, attitudinal change in consumer behaviour means boom-time consumption is giving way to the rise of frugality as people concentrate on paying back debt and living a more measured lifestyle.

Almost all those polled in the latest Nielsen consumer confidence survey vowed to maintain prudent new habits even when economic conditions improve.

People are more concerned about community values and social connection over the promotion of individual interests seen during the boom - and epitomised in celebrities like shallow, frivolous Paris Hilton, says KPMG demographer Bernard Salt.

"She's a product that could only rise during the good times; she will not survive the downturn," says Salt.

"During a boom, it's all about living for the moment - it's a culture of excess, spending.

"If you have confidence in the future, you can live in a sliver of time called the present."

But in a recession, we retreat to the security of the family, the herd, the tribe, the community - we repent, we deny what we have done in the past and vow to change and mend our ways in the future.

Like chastened children, we promise to have sustainable and community values.

"It's quite biblical when you think about it," says Salt.

He argues the retreat to "real value" evident in consumer behaviour extends to celebrity, and explains the fixation with Susan Boyle. Boyle is the antithesis of Hilton: middle-aged, plain and talented.

"No longer engaged by suburban materialism, we see beyond outward appearances to the beauty of her voice.

"We're looking at inner qualities; we did not have that perception 12 months ago."

During the 1992 recession, American pop-psychologist Faith Popcorn correctly predicted the occurrence of "cocooning", where people retreated to their homes and invested in decorating.

Current local retail sales reflect similar trends happening, with cafe, bar and restaurant takings down while supermarkets, liquor stores and takeaways are doing well.

"You buy a bottle of wine and some pizza and invite some friends home.

"Being out and about, seeing and being seen, seems immoral and distasteful when there are people out there losing their jobs," Salt says.

Human beings are fundamentally tribal, and even though your personal circumstances may not be threatened, if everyone around you is affected, that has an effect on your confidence, he says.

Even if your job is secure, your superannuation or pension fund will have dropped in value.

There's no doubt that if you're middle or upper middle class, then your property value has just dropped too.

Money mentor Anton Nadilo - author of Budget Wise, Dollar Rich - says average New Zealanders rode the wave of the increase in value of their property during the sustained boom and most of their spending wasn't from cash, it had come from debt.

Now they have reached the end of their borrowing potential and are "dematerialising their lives," realising these things are less important than they thought.

"The crisis has given them a wake-up call."