During the last three decades, as the U.S. economy grew so did the average American’s possessions.  Ordinary middle class people became used to the second home, home theaters that were once reserved for movie moguls in Beverly Hills, enormous sport utility vehicles with DVD players for the kids, and buying anything else that struck their fancy — often on a credit card already overburdened with a big balance. 

By 2006, 33 percent of all new homes were larger than 2,400 square feet, up from just 18 percent 20 years earlier.  That meant far more space for more “stuff,” since the average size of the family had decreased.

But now, there’s been an abrupt reversal.  According to an article in The Guardian,¹ many people are retreating from consumerism and intentionally simplifying their lives.  This trend is driven by at least three factors: 

The first and most obvious is that the financial crisis and the associated recession frighten people.  People who are frightened hold on to what they’ve got.  That equates to far less spending on non-essential items. 

Another factor underpinning this new frugality is a perceived need to be so-called “good custodians of our planet.”  Buying and throwing away products like mobile phones, iPods, and computers is not only perceived as wasteful, but also as bad for the environment.

The third influence is the increased realization that buying stuff doesn’t really make people any happier.  It’s now clear that one’s life is no more meaningful or fulfilled with a plasma television screen than without one. 

Almost overnight, people have stopped spending in the same way we’ve come to expect.  Even some of the wealthiest people are cutting back to buying only what is necessary.

In a recent article in The Economist, Harvard Business School professor John Quelch dubbed these new consumers the Simplifiers.²  As defined by Quelch, Simplifiers share four distinctive characteristics:

First, they have now come to believe that they have far more consumer...