"...limit their expenditures in a big way..." The important word here is big. Before the go-go 1990s before stock portfolios shot up and ordinary stock investors became richer overnight, the average millionaire bought their cars with cash, their houses with with 20% down, and their kids didn't attend universities they couldn't afford.
After the go-go 1990s with their inflated stock values, the average investors spent money without selling their equity assets. They borrowed based on their newfound wealth not anticipating that their asset prices might drop. As we all know, it does and it did.
However, the overspending became the new norm. Owning luxury cars became accessible. Anybody who is willing (not necessarily afford) to pay the monthly lease got one. Shoppers charged their designer bags on the high interest rate credit cards. (Credit card companies gave anyone who had a pulse a credit card.) Home loan lenders came up with "no doc" loans so homeownership were like owning a luxury car. Everyone had to have one. Kids want to go to that expensive university but there's no money in the bank? No problem. Let mom and dad cosign the private student loans.
I'm not saying all or most of us spend profligately. But there sure a lot more of us who do than I saw during the 1980s.