Thrift gets a bad rap in today's consumer economy, and that's a shame. Done right, thrift means having the money to spend on things you really desire — before and after retirement.
"Thriftiness is not about being cheap," Marketplace Money economics editor Chris Farrell told The Daily Circuit Wednesday. "It's about marrying your money to your values."
People assume thrift in a person's pre-retirement years means a lower standard of living. Farrell, author of "The New Frugality: How to Consume Less, Save More, and Live," says that's not necessarily true.
"You mention the word thrift and you think, 'I'm going to live a miserly existence...I'm going to be the one that when you go out you never pick up the check. This is completely wrong."
Instead, it's about creating your own retirement vision that matches what you want to do and not buying into Madison Avenue's pitch that a happy retirement is about yachts and vineyards.
"It's about realigning your values," CNBC consumer reporter Kelli Grant told callers. "You can do the things that you want to do but not necessarily all of it — or all of it at the same time."
The problem is that economic times were extraordinarily good for a generation of Americans. The Great Recession changed our budgets, but "we're not used to this post-recession mentality yet," Grant said. "This is not an optional thing. You should be spending your money wisely."
A recent Gallup Poll found nearly half of Americans feel they'll have enough to live comfortably in retirement, up from 38 percent last year.
Break those numbers down by age, though, and you find a more worrisome picture: 55 percent of those ages 50 to 64 don't think they'll have enough to live comfortably.
Farrell's optimistic that younger generations get the idea of spending tied to values and not just for the sake of owning stuff.
"It's about taking control over your life and about being able to exercise control," he said. "The average person who spends and has a lot of debt, they don't have a lot of freedom."
LEARN MORE ABOUT SAVING FOR RETIREMENT:
•The Back-to-Work Boomer Financial Recovery Guide
"Experts agree that through a disciplined combination of cutting expenses, working more years, being creative and making some investment changes, boomers who've taken a bath still have time to fix their finances. In the words of Dallas-based financial planner Erin Botsford: 'Take a breath. You will survive and deal with this.'" (AARP)
•The Retirement Topic Nobody Likes to Talk About
"Sometimes, the desire to spend smartly calls for a more dramatic step, like downsizing. The savings you'll accrue from a smaller home compound over time, offering you the prospect of greater lifestyle freedom and flexibility." (Chris Farrell, nextavenue.org)