Living frugally is a great way to get your spending under control and set a base to improve your personal finances. However, what is the point of cutting every expense and possibly retiring early if you aren’t able to put the money to good use with the things you enjoy in life? Tanja Hester is the writer behind the blog, Our Next Life, and new book, Work Optional. She’s joining us to share her views on how we can be selectively hard-core in our money saving ways but still be able to spend on quality items or experiences that align with our priorities.

Welcome to The Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. You may soon find yourself with a huge tax refund burning a hole in your pocket. How should you spend it? The smart thing you can do is invest it. In fact, put it right into your RRSP and get a jumpstart on your contributions. As a Maple Money reader you can get $10,000 managed for free when you open a new account or transfer your existing RRSP to our sponsor, Wealthsimple. Go to maplemoney.com/wealthsimple today. Now, let’s chat with Tanja.

Tom: Hi Tanja, welcome to The Maple Money Show.

Tanja: Thanks Tom. Thanks for having me.

Tom: I was going through your blog and I one of the things I noticed—and it sounds like Jonathan from ChooseFI came up with this term; selectively hard-core which is about frugality. I really resonated with this because I think I do the same.  I can rarely buy clothes but I can spend money on travel. I think I’ve said it on the podcast before but my big expense ever, was when I put a home theater in my basement. It was a full-on, multiple-level seating with projector so I get the idea that you spend on what you want but you can still cut other places. Is that how you see it?

Tanja: Yes, absolutely. I think there are some people who love being frugal in every way and view it almost as a hobby or lifestyle. For those folks, that’s great. But I don’t think that’s most of us. Most of us work hard, make money and want to be able to put that money toward things we enjoy so the idea of not spending on something you can technically afford is tough. That’s why I put non penny-pinching in the subtitle of the book in terms of not thinking about how you can be frugal in every way possible but how you really can just cut the stuff out of your life that doesn’t add value. To your question about the selectively hard-core, it’s funny to me that we’re known for this because Mark and I are really not very frugal. I think we’re pretty un-frugal, especially among folks who are in the early retirement community. We’re known for keeping our house really cold. We keep it at 55 degrees Fahrenheit, 13 degrees Celsius and it’s really cold. I’m not going to lie, it’s very uncomfortable if you’re not used to it. But we kind of built up to that. We got our first heat bill when we moved from LA to Lake Tahoe and it was really, really high. It was hundreds of dollars. We were not going to pay that high of a bill every single month in the winter so we wondered how cold we could get it. It turns out 55 degrees Fahrenheit (13 degrees Celsius) was the answer of what we could stand before we started to feel miserable. Even at 54, one degree colder and we were shivering but 55 we could do. We bundle up and wear a lot of fleece in the house. I have slippers on at all times. Often we have our hoods up which I don’t have because we’re on video. But yeah, that sort of became our thing. It’s not even financial anymore. It’s a way to toughen up a little bit and to practice a little bit of being uncomfortable for the sake of being better as people. It’s just a nice side effect but it also saves money. And, of course, it saves energy which is big because we care about the environment. So not burning extra fossil fuels is a good thing too.

Tom: Yeah, here in Celsius, room temperature would be 20 or 21. My advice is to try and lower it one degree. Lowering it seven or eight degrees would be tough for me.

Tanja: But you can work up to it. You can do one at a time.

Tom: It’s actually interesting. I know I can survive this because my office here is in the basement and I’ve got NEST sensors around the house. Right now it says I’m at 14 degrees. It’s actually almost the same. Normally, I’d also be wearing a sweater. And I have worn one on the show too but I don’t want to keep wearing the same sweater every episode. I don’t have it on now. Yes, it’s cold but doable.

Tanja: And for folks who think it sounds kind of crazy of us to be doing that, I think it’s a good way to try. It’s similar to how you might think about spending. It’s not about cutting back everything at once. It’s more like tightening your belt one notch at a time. Turn it down one degree and live with that for a month and see if you can do one degree more. I know a lot of couples have thermostat wars and I don’t want to get in the middle of that but it can be a good exercise to just see if you can stretch your comfort zone a little bit.

Tom: Yeah, my basement is cold just because it’s a basement and it’s winter. On the main floor it’s about room temperature. But I do find having that NEST does help make it a bit of a game. They give you a little eco-leaf when the temperature is a little bit better. I try to get that eco-leaf when I can. And then it starts to program itself. It’s a smart thermostat that will start keeping those temperatures as if you’re always setting them to that. This is obviously (I would assume) the most extreme frugality you do. Are there other spots in your spending where you’re finding ways you can save money?

Tanja: I don’t think our life looks like a very frugal life. I think anyone who saw us living it would not think that we are super frugal because we’re really not. What we’ve done is focused on cutting out expenses that don’t add value to our lives, but we still let ourselves spend money on the things that do. We just try to find ways to make them cheaper. For example, we spent three weeks in France last fall. France is known for being pretty expensive. Obviously, you can try all you want but you’re still going to end up spending a good chunk of money. And, we did. But we also went in November which is off-peak. We went when airbnb, hotels and rental cars were really inexpensive. We were able to have a really lovely experience with only a few differences because it was off-peak time. When we went to the beach in Nice we weren’t swimming. We were walking at the beach because it was chilly. But that was fine. We didn’t need to swim in the Mediterranean. We’re not really beach people anyway so that worked for us. Then we looked at some other destinations. Last year we went to Mexico and Taiwan which were both pretty inexpensive. And I really love the traveling so travel is something we absolutely spend on. But we look for ways to bring the cost down. We don’t go at peak times. We don’t have three trips in a year that are all really expensive destinations. We might have one expensive trip a year and two cheaper ones. But then we looked at whole categories. We haven’t had cable in about seven years. We were trying to remember that just earlier today. We don’t really buy a lot of new clothes and when we do, we shop very discount. I’m a big fan of TJ Maxx or ciera.com which is more of the mark-down, outdoor wear. If we buy new sporting gear—which we do a fair amount because we live here in Lake Tahoe where it’s mountainous. We can ski, mountain bike and do all that stuff. We definitely buy second-hand with everything. Take skiing for example. If you love to ski but you don’t live near skiing it’s really expensive. If you don’t have a season pass—I think season passes in the US at a resort are up to almost $200 a day whereas we pay $600 for the whole season. You could easily take a family on a ski trip and spend $10,000 or more where we’re not paying for lodging on the mountain (because we’re 20 minutes from it) and we’re spending $600 for the whole season. Skiing is actually a very economical thing to do (in that way) because we ski a lot. Things like that where it doesn’t feel frugal to us. We’re getting to do things that feel really adventurous but we’ve found a lot of ways to make them pretty inexpensive.

Tom: Going back to that travel idea, I love traveling off-season. And it’s not just for saving money. Sometimes it’s just nicer. We are a family of four. We’ve got two children so we’ll go somewhere like Disneyland. There is nothing worse than going during the summer. You’re paying more, you’re not enjoying it. Just this last January we went to Mexico. I believe it was January 2 so everybody was leaving from their Christmas trips and New Year’s Eve trips. It was like we had the resort to ourselves. I got a great deal on it because of that.

Tanja: Yeah, if you’re able to travel in November, December up through right before Christmas, and January after New Year’s, those are the most magical times to go almost anywhere—unless it’s a ski destination. If you’re trying to ski in Japan, January is a little more expensive but everywhere else, yeah, it’s like the big secret.

Tom: And I didn’t even fully realize that. I was just looking for a trip and got a really good deal. It was only when I got to the resort and literally met people there that were leaving after New Year’s Eve that I realized the place was only one-third full. Two thirds of the resort was empty. It made it a lot easier to do things. You could get in the pool. You could get drinks. You could get on excursions easier. Everything was just way more available. And, being where we are in Canada, it’s nice to go to Mexico in January. It’s a nice break in the weather. One more thing I wanted to go back to was, you mentioned not having cable for seven years. Now, I don’t watch a lot of TV but I do need some. Do you guys have Netflix or anything like that?

Tanja: Oh yeah. I don’t mean to sound like we’re some anti-TV people. We have a Roku box where we get Netflix and Hulu. And, I don’t know if I should admit this but we have stolen HBO now. It’s from someone who used our Netflix password for a bunch of years and we feel like we’re just evening out the karma on that.  

Tom: It’s shared, not stolen.

Tanja: Yeah, there you go. Exactly. Shared… willingly.

Tom: I know people who have android boxes that can stream everything possible. That’s probably more stolen than this. This is just a shared account.

Tanja: I fully respect artist’s rights and copyrights. We don’t steal any content but we are mooching off a friend’s HBO.

Tom: I remember before all of these digital accounts, people would actually get additional satellite dishes—the little pizza-sized ones. You could get another dish and share an account because you couldn’t really see where the signals were coming from. Everybody is still getting paid, it’s just that you’ve got a box in a totally different house. But that’s not necessary now. Today, everything thing is online. Another thing I want to talk about aside from some of the places you’re cutting is about something else you mentioned. I really like the idea of quality over junk. Our mutual friend JD Roth just got a lot of hassle over this and I keep perpetuating it myself just to bug him but, he bought pajama pants for $80 and he assumes they are going to be good enough to last forever. What are your thoughts on quality over junk? Maybe give us some examples where you make that decision.

Tanja: I’m just thinking about if I would spend $80 on pajama pants. That would be tough for me.

Tom: We were just together last month and I pulled out the $25 pajamas I got at Costco saying, “These are pretty good quality. I think they’re going to last.” So, we might have a competition going now to see whose gets holes first or something pulling apart because we bought them around the same time.

Tanja: Keep us all posted on that. Pajama pants competition. I think we definitely take the view of trying to buy quality for a couple of reasons. One is, we just don’t want to put a lot of stuff in a landfill. I understand right now ideas like KonMari and such—the whole “tidying up” thing is very popular. Most of the stuff you’re donating to charity is ending up in landfills. I hate to say it.

Tom: Oh, really?

Tanja: Yeah, that’s the truth. We try to be really intentional. We don’t just want to think we can drop something at the thrift store as a way to dispose of things. We try to think about how we can get as much use out of something as possible knowing that most often we’re just delaying the process of it throwing it away by a couple of days. Again, $80 pajamas pants I probably wouldn’t do. I’m mostly saying that to antagonize JD because he’s a friend. I do think it’s worth spending on things that truly add to your quality of life. I’ll give you an example. You talked about your home theater before, which I’m sure gives you a ton of joy and makes your life better because you have this amazing setup. Well, we spent a fairly extravagant amount of money on our sofa, but we practically live there. It’s super comfortable. It’s really durable. It’s made of hardwood. It was made in the US. It’s really good fabric that our dogs don’t rip up and all of that good stuff. And, it’s going to last us forever. That’s something that feels so much better than going and buying a cheap couch at IKEA which is less comfortable, less durable and is going to require you to toss it and get a new one someday. I’d rather buy something that’s more expensive that you can buy once, especially if it’s something more comfortable. Something that adds value. I see a lot of people, for example, who  work from home sitting in  really cheap office chairs and I wonder how their back is going to feel in five or 10 years after sitting in that piece of crap chair. Yes, good office chairs are expensive but isn’t it worth buying one so your back doesn’t hurt?

Tom: Yeah.

Tanja: Things like that. I think looking at what the value of something adds—not just the happiness stuff but something adding fun is good. But does it also keep you healthier? Does it make you more comfortable? Does it make something you do things a lot easier? Is it something that really improves your life? To me, those are things worth spending on. Not that you want to spend tons on everything. Just prioritize the most important ones or spread those purchases out so you’re making one or two big purchases a year that are really high priority.

Tom: You mentioned the idea that buying things that will last. I may have a home theater and I’ve set up my office pretty nicely. But, in general, much of my furniture is from the mid 90s. I was a teenager at the time. But I’ve still got the same bedroom furniture I had back then and my parents couch from the mid 90s. They’ve lasted so far. They’re probably due for replacement but I’m having a hard time replacing them. Especially having young kids. We bought a new kitchen table and it’s already scratched up and has scuff marks on it. I say to my wife every time she talks about needing a new couch, “No. Look what happens when we buy stuff,” so especially with kids it seems like we’re probably just going to wait as long as possible. Right now if we buy something it’s probably going to have a very short life of two or three years at the rate they’re (the kids) destroying things.

Tanja: I think that’s smart. I think maybe waiting until they’re at a slightly less destructive age wouldn’t be the worst thing. And too, we live in a world where manufacturers and marketers make it hard to find quality. I laugh because my favorite “rebranding” thing in recent years is vegan leather. Vegan leather is polyurethane which is basically plastic. It’s amazing how much stuff online now is called vegan leather. They make it sound responsible when it’s really plastic that’s going to degrade on you, fall apart, break and end up in a landfill. The number of couches that are covered in vegan leather is really high. And that’s stuff your kids will trash instantly because it’s low-quality. I think waiting until they’re slightly less destructive is probably good. Then, if you like leather, buy leather or a really good strong fabric. But that does take more work as a consumer. You can’t just go in and say, “Oh, this is pretty. I’ll take this.” It’s a little bit like all the money stuff that goes along with it. It’s just being intentional with what you want to bring into your life and what you don’t. So yeah, there’s no shame in keeping the older furniture for awhile.

Tom: I think we have to. Another thing you mentioned before was the idea with FIRE, which we’ve talked about on the show before. It’s basically about what you’re retiring to. Your angle on it was more about whether or not you’re going to be bored. But in addition to being bored I think we can bring the spending back into that too because we talked about this idea and a lot of people at FIRE believe you need to be super frugal and not spend. Sure, there are people that like it, but I think there is also even more people that are probably turned off because they don’t want to live that way. What are your thoughts on this idea where someone is retiring early or maybe even retiring at a normal age; what are they retiring to? Do they want to be too bored? Do they want to be able to spend and maybe do something with their time?

Tanja: I want to respond to so many different things in that. I started out the book with a three chapters. Part one is really about looking at the life you actually want to live because I do think there is a tendency when people learn about early retirement or FIRE—I don’t actually like the term FIRE but we’ll just go with that because that’s what everyone else uses. People learn about that. They get really excited and start building their spreadsheet. They look at how much they can save and that’s often very motivating. But I think most of us come at it from the view of, “I can’t wait to quit work,” where they sort of burn the last place down and march out of there triumphantly. We don’t necessarily picture what we’re actually going to do with our time and what life will actually look like. I think it’s really important to think about that stuff even more than the money piece, particularly if you’re in a marriage or committed relationship. Doing a lot of that with your partner, not just doing spreadsheets together but actually creating your life vision I think is super important so you don’t end up bored. A lot of us who are drawn to early retirement are people who have many, many interests and aren’t really at risk of being bored. But it’s still very easy to let days slip by doing nothing when you have no one forcing any external structure on your life. So, making sure you feel like your days add up to something does take some planning and thought and that’s really what part one of the book is about. The other side of it though, of not being super frugal and thinking about the life part is, once you have that vision it helps motivate you to save and to make different choices in your life so that if you know exactly what you want to do, it’s so much easier. You can just say, “Oh, I don’t need that thing. I can live without it,” whereas when you’re seeing how hard you’re working at work and how miserable it may be making you (or whatever it might be) you think you deserve that thing because you work so hard and you’re taking the work stress home with you. I think it really does change your whole point of view on it. It’s easier to make different financial decisions when you know what you’re aiming for.

Tom: I’ve seen a lot of people with full-time jobs that take that stress of the job and basically spend it all. It becomes this constant thing where they believe they have to do something like go out for drinks with their coworkers or they need to travel during their vacation time. Everything is sort of a forced thing by then.

Tanja: I can relate to that. That was what Mark and I did for a long time. We had very high-stress careers. We worked a ton of hours where we had to be reachable around the clock. And yeah, we thought we should reward ourselves for that. But as soon as we saw what was possible and how quickly we could exit that traditional path, it was amazing how much that changed our mindset and how we instantly thought, “Oh, do we need all of that?” I think too, it helps to remember that none of this is all-or-nothing. It’s not like saying you can go to happy hour, eat at restaurants, take trips and buy new clothes, or do none of that. That’s just a false choice. It’s more about calibrating. So maybe you do all of that but you just do it less. Or you decide out of all of that what is more important to you. For example, the most important thing may be travel but you can do without happy hour. It’s really about figuring out what you value both in life and financially then letting that drive your decisions.

Tom: I like this. There’s a nice balance to this. You don’t have to be poor but you don’t have to wait until you’re 65 to retire. This has been great. I love going through all of this. Can you tell people about your book? It’s just been released this year so let everyone know about it.

Tanja: Absolutely. It’s called, Work Optional, Retire Early – The Non-Penny-Pinching Way. For those watching on video, I’m showing a picture of it. It’s very pretty. It’s a guide to how you can make work a smaller part of your life and to be very intentional about what role you want work to play. So I talk about how to pursue full early retirement, how to semi-retire which is, in truth, what a lot of people pursuing early retirement end up doing. They end up working some. And generally not because they have to but because they find something they really enjoy like me—I wrote the book. That paid a little bit of money but it was a cool opportunity and I always wanted to write a book so that was something that just felt really fortuitous. I also talk about career intermission and being able to take a year’s break once every 5 to 10 years; giving people different options for how they can save, create a life in which work plays a smaller role and ultimately, how you can live a life that feels really purposeful and meaningful. Because that’s what this is all about. This is about living your best life and that’s why I am so against the absolute frugality trend. Or, the judging people for certain expenditures, like the story that went around last year about Millennials who can’t buy houses because they eat avocado toast. If you love avocado toast, why are we going to shame you for that? As long as you aren’t buying avocado toast at restaurants everyday and driving the latest sports car and buying a big house, let people have things they enjoy. I think of it as a very modular, choose-your-own-adventure approach to early retirement and a “work optional” life that lets you decide what you value, how fast you want to save, how fast or slow you want to get there and what that life ultimately looks like.

Tom: Great. Thanks for being on the show.

Tanja: Thanks for having me.

Thanks to Tanja for showing us that you don’t have to pinch every penny to become financially independent. You can find the show notes to this episode at maplemoney.com/tanjahester or head over to maplemoney.com/show to catch all the past episodes. Tanja wanted one lucky listener to get a free copy of her book, Work Optional, Retire Early-The Non-Penny-Pinching Way. For your chance to win the book, head over to maplemoney.com/giveaway today as the contest is over on March 20, 2019. Thanks for listening and we’ll see you back here next week.