Save more or spend less?

I've read about some early retirement extremists (check out Mr. Money Mustache and Jacob at Early Retirement Extreme) who live on relatively low annual budgets (ranging from $7,000 for an individual to $25,000 for a family of 3.  The trade-off for going without some luxuries and living a modest lifestyle is retirement well before 65 - in their early 30s.

Mr. Money Mustache rarely eats out or drives a car and Jacob chooses to live in an RV.  Those guys seem perfectly content with what they are doing, but I have a hard time seeing myself living like that for the rest of my life just to make retirement by 35 possible.  I could certainly do it for a period of time, but not for decades on end!

So part of what I'm trying to figure out is this - should I adjust my expectations for lifestyle and live on less, OR should I need to focus on saving more money to afford the lifestyle I currently think I want when I retire.

If my family only lived on $25,000 a year, it is possible that my husband and I could both retire in the next year or two (the hubbie isn't interested in early retirement right now as he is really enjoying what he is doing for work).  But I don't see how that would leave much room for pursuing the travel and hobbies that I currently see as part of my retirement life.   

The other option is to work longer and save more.  I have the 5 year plan going right now, and I *think* that will leave me with the lifestyle I want, but I won't have a great sense of this until I get closer to retirement.  I also need to keep in mind that retirement for me won't mean a full-stop on any income-producing work, just the ability to quit working for an income if I want.  Who knows where new hobbies or business-ideas will take me and the income streams they might produce.

I guess the important thing to figure out is, what is my top priority?  A type of lifestyle or more free time?  What would you choose?