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A Nation Full of Tightwads

Older people pinch pennies more than younger folks, poll shows

In these tough economic times, more Americans say they're cheapskates than those who say they are spendthrifts. But younger people are more likely than older adults to admit that they have trouble curbing their spending, according to an AARP Bulletin poll.

See also: 99 money-saving tips.

Despite high unemployment, a fallen real estate market and a decline in consumer confidence, two in five people polled in June (42 percent) say they spend money wastefully. And those ages 18 to 49 (18 percent) are more likely than adults 50-plus (11 percent) to admit to careless spending.

But overall, nearly one in four people (24 percent) polled characterize themselves as tightwads. More than one in seven (15 percent) say they're spendthrifts. Nearly half (48 percent) say they're neither.

The poll of 1,078 people age 18 and up found that one in three (34 percent) say that they have trouble spending, and often don't buy necessary items because it makes them anxious. For three in five (64 percent), however, laying out money for purchases is no problem.

Interestingly, respondents with incomes between $50,000 and $74,000 were more likely than those with incomes less than $25,000 to say they identified with shoppers who had difficulty spending money.

Men more likely to curb spending

What makes a consumer a penny pincher or a spender? Behavioral economists studying consumer spending habits in 2007 identified significant patterns among tightwads and spendthrifts. They found that men have a harder time spending money and are more than 2 1/2 times more likely than women to be tightwads. But contrary to what some may think, women were no more likely to be spendthrifts than tightwads.

Mirroring the AARP poll results, the behavioral economists found that younger folks in their 20s were more likely to be spendthrifts, while those older than 70 were more likely to be tightwads.

Joey Herman, 45, a telemarketer from Signal Hill, Calif., makes no bones about his spending habits.

"If I've got money in my pocket, I spend it," he says. "I inherited a bunch of money. I took $100,000 of it and bought a [Ford] Mustang, bought a bunch of guitars and recording studio equipment, traveled around the world, went to nice places to eat. My buddies needed money so I gave a bunch away. I invested the rest and I get a monthly return. I'm trying to save for retirement."

What about retirement?

Herman says he's not worried about being able to live comfortably in retirement. And two in three respondents feel the same way: 68 percent of those 50 and older and 65 percent of younger people say they are very or somewhat confident they'll have enough money.

Not surprisingly, people who say they have a hard time limiting their spending are twice as likely as those who can curb their impulses to say they aren't confident about their retirement security.

Nathan Champine, a candy factory worker in West Mifflin, Pa., says he's a "tweener," that is, in between a spendthrift and a tightwad.

"I do try to find bargains and I've found some good ones online," says Champine, 45. "If I need something, I'll spend the money but first I'll ask myself, 'Just because I can buy this, should I?' If the answer is no, then I don't buy it."

You may also like: Make your money last a lifetime. >>

Carole Fleck is a senior editor at the AARP Bulletin.

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