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For many Americans feeling the slump of recession, the first casualties have been life’s little luxuries.

Jim Smith, a 39-year-old Indianapolis father of four, has dropped movies and eating out from the family budget, as well as grocery extras like soda. Michelle Marchena, 29, of Sunnyvale, Calif., has begun buying Starbucks tea instead of latte. She's also cut out the personal trainer and manicures.

And 31-year-old Dale Smith (no relation) now uses frequent flier miles for his travels, and has kicked the habit of buying new clothes.

"People are spending more time at home, cooking more meals," said Michelle Rutkowski, marketing director at ConsumerReports.org, the Web site for Consumer Reports magazine. "They’re looking for value. They’re not going to make frivolous purchases."

Economist Ken Goldstein of The Conference Board, a business research group in New York, said the change from splurging to conserving is not so much because of the Sept. 11 terrorist attacks or the war in Afghanistan.

"The unusual thing about this recession is not that consumers are running out of money, but their willingness to spend it has virtually disappeared," he said. "What scares them is the unemployment rate climbing higher."

Fear of the unknown is exactly what drives Jim Smith, who is out of work on disability, to be frugal.

"We’ve had to cut back on everything," he said. "You watch what you do because you don’t know what’s going to happen tomorrow."

Going out to dinner or the movies is rare now. Non-essential treats like soda and chips have been cut from the grocery list. And Christmas was much leaner this year: Smith and his wife spent about $50 on each of their children for gifts, down from the usual $100 or $150 apiece.

Marchena quit her marketing job in Houston a year ago and has been unemployed ever since, looking for a new one. She’s shaved a lot of frivolous spending to make ends meet.

"I’ve cut back on luxuries: facials, manicures, massages," she said. "I used to let myself have an indulgence once a month, but I really don’t do those anymore. It doesn’t seem worth it."

She’s also scaled back on eating out, which used to happen about six or seven times a week. Now, at most, it’s once.

Marchena also doesn’t get her hair highlighted in a salon anymore, opting to color it at home. Instead of frequent impulse shopping sprees, she shops online and only buys things on sale. The personal trainer is gone. And she checks books out of the library instead of purchasing them at Barnes & Noble.

"It was ‘I want, I buy,’" Marchena said of her pre-recession lifestyle. "I always had well-paying jobs, and never had to think about it. This whole experience has made me more aware."

Thanks to a dot-com crash, Dale Smith has been unemployed and job-hunting for more than a year. He’s also made do by trying to keep his expenses to a minimum: cutting out pricey daily Starbucks espressos in favor of the store’s cheaper drip coffee, wearing the clothes he already has and traveling on saved-up frequent flier miles.

"I’ve postponed different expenditures, and am really trying not to spend any money I don’t have to," he said. "Instead of being freewheeling, I’m trying to conserve as much cash as possible."

The lean economic times have been bad for department stores, upscale shops and restaurants but good for discounters like Target and Wal-Mart and inexpensive restaurant chains like Wendy’s. All three have seen significant increases in sales in the last year.

"It’s been a good season for discounters, especially here at Target," said company spokesman Lee Crum. "Generally when there’s a downturn in the economy, discounters fare very well."

Consumers also tend to gravitate toward the familiar and the comfortable during difficult times. That could explain why inexpensive fast-food restaurants like Wendy’s, with menu offerings including chili and baked potatoes, and even pricier chains like Starbucks Coffee Co. have continued to see growth.

"We have some great comfort food," said Wendy’s International spokesman Bob Bertini. "We try to provide a familiar, predictable dining experience … and that is particularly important when times are tough."

While doing without the small luxuries has required extra thought and diligence, it hasn’t necessarily made people unhappy. Some say they’ve learned a lot by cutting costs.

"I’m really looking forward to getting a paycheck again," Marchena said. "I think I’ll use it more wisely."

Fox News’ Jeff Goldblatt contributed to this report.