Slumping economy reins in teen spending

updated 3:53 p.m. ET April 17, 2008

NEW YORK - The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty.

It's a far cry from the freewheeling spending of recent years, when teens splurged on $100 Coach wristlet handbags, $60 Juicy Couture T-shirts and $80 skinny jeans from Abercrombie & Fitch.

Now jobs for teens are less plentiful, and parents who supply the allowances are feeling the economic pinch themselves.

The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold.

It's even becoming cool to be frugal.

Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.

"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.

Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from baby-sitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes.

Now, she says, she and her friends head for the thrift store or just browse at the mall.

"I used to be able to buy a T-shirt and jeans every couple of months," Victoria said, adding some of her friends are even "making their own clothes or altering their old ones to fit or look better."

Victoria's mother, Michelle Bradley, said she and her husband cut back spending on themselves last year, and early this year also started paring back "frivolous" buying for their three girls.

"We have made a conscious effort to not use credit cards," said Bradley, who stopped paying for Victoria's text messages last month. The top priority is school supplies and choir fees.

The job market for teens isn't what it used to be, either: Nathan Reeser, a Cincinnati 15-year-old, lost his job making pizza four months ago and has had to cut back on spending. He's shopping more at Target and less at Abercrombie & Fitch's Hollister stores.

"Now, I just get money from my parents, but they don't have as much because of taxes and everything else," he said.

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