(MONEY Magazine) – If you plan to slap a low ceiling on your '95 budget, you're not alone. Since 1993, Americans have gunned their spending by an average rate of almost 5% per year, while personal income grew only 4% annually. Roughly speaking, that means for every additional dollar consumers earned since 1993, they spent $1.16. "Such an imbalance can't last forever," points out senior economist Rosalind Wells at the New York City retail consulting firm Management Horizons, a division of Price Waterhouse. And it won't. The past two years' spending spree, says Wells, was spawned in part by the wallet-widening mortgage refinancings that were all the rage in 1992 and '93. Credit got tighter, of course, in 1994. And with interest rates on borrowed bucks and inflation each expected to jump by as much as half a percentage point during '95, she says: "Next year, consumers won't splurge as much." Of course, if the newly empowered Republicans manage to push some sort of a middle-class tax cut through Congress next year, spenders' dollars might flow more freely starting late in 1995 and into '96.

In the meantime, however, Americans will increasingly look to make every buck count, and any indulgences will lean toward the practical and close to home. "People will look for luxury in affordable places," says Tricia Reebs, an analyst with Dain Bosworth in Seattle. "They're choosing to consume less product but at a better quality." In keeping with this new practicality, consumers may prove less inclined, for instance, to splurge on a complete dining room set and more willing to shell out for high-end electronics or a single knockout piece of furniture. Big bytes will attract big bucks as shoppers continue to snap up personal computers for home offices and entertainment. Last year, 18% of all PC households had multimedia models with CD-ROM drives (about $1,800 apiece); that's expected to roughly double--to 34%--next year, with prices holding steady. And as the economy slows in '95 and consumers grow cautious, look for stiffening competition to lower prices 5% to 15% on certain big-ticket items, including appliances and even leased sport utility vehicles by Japanese makers such as Nissan and Subaru.

To identify 1995's prime retailing trends--and to uncover what the next year's likeliest best buys will be--Money canvassed two dozen retail analysts, marketers and manufacturers. Here's what we found:

GET SET FOR BETTER PRICE TAGS FROM THE GET-GO AT THE BIG DEPARTMENT STORES.

Determined to recapture sales from the discounters and off-price retailers like T.J. Maxx and Marshalls, the biggie department stores will begin merchandising most staples, from robes to rugs, at about 15% to 20% lower initial prices. The old pattern at department stores was 100% markup, followed by discounts of 25%, then, perhaps, 50%. But in '95, chainwide at stores like Dillard's and Nordstrom, "You're going to see value-oriented pricing as the theme of the year," reports Peter Schaeffer, a retail analyst with Dillon Read in New York City. Among the department store best buys: clothing, especially private-label threads, such as Macy's Charter Club and Nordstrom's Evergreen, that offer comparable quality to designer fashion. Department stores will also give discounters a run for your dollars on items that feather the refinanced nest. Example: linens with all the accessories and trimmings, including duvets, towels and matching draperies by famous makers. Expect price drops as deep as 40% less than you'd have paid to similarly outfit the bedroom and bath just three years ago.

MAIN STREET RETAILERS ARE GETTING SMARTER TOO.

"More people working from home means an increase in local spending," says Gerald Celente, editor of the Trends Journal Newsletter in Rhinebeck, N.Y., who notes that more than 41 million Americans now work at home full or part time, up from just 18 million in 1988. Tight on time, work-at-home spenders and weary commuters alike will increasingly turn to neighborhood retailers, many of whom will now match the discounts available at out-of-the-way warehouses and outlets.

THE LIVING ROOM WILL TAKE CENTER STAGE.

Next year, as aging boomers opt for home life rather than the thrill of a corporate coup, more of them will discover the indulgent joys of staying in and entertaining at home. One hot homebody item worth checking out: large-screen TVs--25 to 35 inches--sales of which have blinked upwards of 80% since 1989. Prices ($700 to $1,600 for a 30-inch model) were down by 11% during the same time. Through 1996, the industry is projecting further price dips on uber-screens, as brand leaders RCA and Hitachi duke it out.

You will see good values on high-quality cookware and kitchen equipment as well. For instance: Prices on top-of-the-line pots and pans will continue to slide as competitors like Circulon and All-Clad introduce new lines. For the best buys, stick with department stores (rather than the specialty gourmet shops), which dominate as much as 50% of this market. And look for special promotions such as Calphalon's "Italian Mediterranean" gift package. For $49.99, you get a sauta pan as well as some bottles of cooking oils-infused with flavorings like basil or peppers-that would ordinarily set you back $96. It also pays to buy in sets (on sale, about $260 will get you seven pieces of Calphalon with lifetime guarantees). Look for blowout sales on cookware in August and November, when you may snag 40% off regular prices. If you can't wait for a sale, the Chef's Catalog (800-338-3232) routinely discounts name-brand sets by as much as 30%.

INVEST IN YOUR BODY AND SOUL.

With 60-hour workweeks increasingly common and employers reporting a 98% jump in repetitive-strain injuries between 1986 and 1993, today's fast-trackers are learning how to kick back in small doses. High on the agenda next year: short, frequent, back-to- basics getaways, such as four-day health spa stays--for men and women. "It's a trend we call serenity seeking," says Judith Langer, president of the market research firm Langer Associates in New York City. "Pursuing activities that are therapeutic reflects the need to break away from work." For consumers, that means:

PRIME '95 VACATIONS.

Any trip that smacks of adventure, such as hiking, rafting, camping or mountain climbing. For challenging outdoor packages at good prices, try Kaibab Mountain/Desert Bike Tours (800-451-1133). This Moab, Utah outfit offers three- to five-day guided tours throughout the Old West ($390 to $875 per person, including meals but not equipment).

HOME REMEDIES.

Look for homeopathic and alternative medicine to gain credibility as more health plans cover such nontraditional treatments as chiropractic adjustments and acupuncture (at about $50 a session). Overworked professionals and yuppies are also lining up for lunch-hour massages, such as the dollar-a-minute rubdowns offered at the storefront Great American BackRub Store in New York City (800-222-5782). "It's a quick feel-good," says company founder Bill Zanker, "the McRub of the '90s." Zanker, who says he has seen dozens of imitators crop up from coast to coast, is preparing to take his company public over the winter.

DINING OUT.

We'll want to feed our bodies right but only at the right price as well. Expect restaurant chains to slant their menus toward more healthful entraes while still holding down their prices. For instance, at California's rapidly expanding Fresh Choice--the Santa Clara-based, 49-restaurant healthy-food chain famous for its 60-foot salad bars--the average dinner tab rings up at only $7.25. And at the nationwide Chili's Grill & Bar chain, where price increases are held to 2% a year, you'll be seeing more low-fat selections too.

IN 1995, SAFETY FIRST

Despite an overall decline in urban crime reported by a 1994 survey of 22 cities by the New York City Police Department, 36% of all Americans regard crime as the nation's most pressing problem, up from only 7% in 1991. So it's no surprise that products that can protect you--ranging from home-security systems to beepers and pagers--are soaring. At ADT (800-238-4636), for instance, the nation's largest seller of home-security devices, the new, high-end wireless Safewatch Plus RF system, which flashes lights and sets off sirens when it detects intruders, costs about $400 installed (plus a $24 monthly fee). That's less than half the cost of its equivalent back in '89.

Sales of pagers, a.k.a. beepers, are expected to hit $267 million in '95, up about 16% from '94. Pagers were once the exclusive badge of busy execs and doctors. No longer. Now available in kid-glow neon, they're the latest thing to keep active teens and nervous parents connected. Indeed, more than half of all new pager users in 1994 bought the devices for personal rather than professional use. "It's a high-tech way of achieving old-fashioned safety," observes Marion Salzman, president of the New York City consulting firm BKG Youth, because you can reach out to touch a loved one anytime. Today, nearly 25 million Americans, or one in 10, totes a pager, with average prices under $100, vs. the $400 beeper price tag of a decade ago. One of the snazziest models, Motorola's $350 Advisor, has even been downscaled for family use into the new Memo Express, at half the price. It is alphanumeric like its forebear, meaning it receives both word and number messages. Meanwhile, in '95, lower-tech users can look for 5% to 10% price drops on numeric pagers (which display digits only).

Overall, our spending forecast for the year? Everyone's going to be just a little more careful out there.