Serena Jen

CUTTING BACK: Serena Jen, in her Los Feliz-area apartment, put herself on a strict budget after she became aware of the fact that she spent $10,000 on clothes, shoes and handbags in 2006. (Lawrence K. Ho / Los Angeles Times)

Serena Jen, a renter for 12 years, is determined to be ready to buy the next time prices are right. The real estate market being in a slump "gives me an added incentive to save more cash for a future down payment," the Los Feliz-area resident says.

The problem with saving is the cost of everything. "In January, when I got my gas bill, I couldn't believe my eyes," Jen says. Her bill, usually about $8, was $40.

So she wears a coat in the house when it's cold and wraps herself in a blanket to watch television. "You just kind of have to deal with it," she says. "Thank God we live in Southern California."

The 42-year-old real estate appraiser, who makes about $54,000 a year, wasn't always so frugal. Her mind-set was jolted last year when a credit card summary of her 2006 charges showed she had spent $10,000 on clothes, shoes and handbags. "I got the shock of my life," she says.

She booted up her computer and designed a budget. Now she keeps all her receipts and monitors every penny she spends.

"If I shop too much I will know right away. So next month I can cut back -- or return some of the stuff that's really not necessary."

Beyond that, Jen has severed the binds of brand loyalty. After shopping only at Trader Joe's for five years, she switched to Fresh & Easy, which she says has lower prices. And she won't set foot in a Starbucks or a Pinkberry.

Jen hasn't stopped spending, though. She spruced up her apartment with cabinets, a rug, a dining room table and a sofa she bought online via Craigslist, where she sold bookcases, night stands and handbags. The net outlay: $1,500.

The state of the economy is enough to make any "normal person sober up," she says. And she isn't suckered into believing that Americans should keep spending to shore up the economy. That's just "manipulation," she says. Instead, Jen says people should look deeply at why they spend.

"I believe most of us have enough pairs of shoes, pants, handbags and dresses to last three or four lifetimes," she says. "Why do we keep on buying things? Maybe there's a void -- and you need to pay attention."

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Leslie Earnest