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 are less plentiful, and parents who supply allowances are feeling the pinch.
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'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.
"I used to be able to buy a T-shirt and jeans every couple of months," Victoria said, adding some friends are "making their own clothes."
Victoria's mother, Michelle Bradley, said she and her husband cut back spending on themselves last year, and early this year started paring back "frivolous" buying for their three girls.
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.
Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period.
That's still not as bad as the 13 percent drop in teen hiring in the early 1990s. That means that if the larger job market mirrors the last teen hiring slump, "we're not out of the woods," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.
Economists say this spending slump could be the worst in 17 years, when teen frugality led to the demise of Merry-Go-Round Enterprises Inc.
What makes this slump different, says Deloitte Research chief economist Carl Steidtmann, is the soaring cost of basics such food and gas.
Gas could reach $4 a gallon this summer, and prices for teen favorites like pizza and potato chips have all climbed, squeezing the amount of cash teens can spend elsewhere.
Sales at teen retailers open at least a year averaged a 0.5 percent decline last year, compared to a 3.3 percent increase in 2006 and a 12.1 percent gain in 2005, said a UBS-International Council of Shopping Centers tally.