Ways to Manage and Save Money as a Digital Nomad (1)

Many digital nomads are opting to work from anywhere in the globe as a result of digitalization. Before embarking on their next trip, they should assess their financial situation. The biggest mistake you can make as a digital nomad is to be unaware of your financial situation before starting to travel as a digital nomad.

If you are someone who has made the decision to quit your job and become a digital nomad or if you are someone who is looking for ways to save up money so that every now and then, you can remotely work and travel, you need to know your finances. It sure is challenging to work remotely from another place and have savings to ensure that you don’t go broke at the end of the day. The value of money is different in many countries, hence every decision matters because money matters.

You might be having irregular income because you are a freelancer or you might be an employee making a steady income. It all comes down to how well you know to manage your finances. You need to save enough money if you need to travel and support yourself in another country.

The first thing to understand is how digital nomads make money while traveling. Most of them primarily work for a company remotely or work as a freelancer. There are different means to make money online but this doesn’t suit all kinds of people or professionals. Jobs like graphic design, content writing, website designing, and translation all can be done online whereas this is not the case with other jobs.

You need to make sure firsthand that your job does not require your physical presence all the time. If so, you are good to go tot the next step - savings. You have to ensure that you have enough money to not just travel, but also have a good life. Travelling comes with lots of expenses especially commute and accommodation. It is important to speculate what your budget is and plan accordingly. Looking out for great platforms that offers discounts on stays/ rentals is crucial. So before moving to a place, connect with other digital nomads through facebook groups or social platforms to understand what are the most affordable options available in that particular place.

The cost of living and the exchange rate of the destination you choose to visit must also be considered. If the cost of living is high or the local currency is weak, your money may not go as far in some nations. Yet, the inverse might be true, and you could have more purchasing power. It's undoubtedly something digital nomads should think about while deciding where to go. They utilize internet banking, create budgets, and make purchases with credit cards and e-wallets. Effectively managing income and expenses makes all the difference.

In this blog, we are going to focus on few tips that might help you on a long way to save money and manage finances as a digital nomad.

Create a Budget and Track your Expenses

A thorough, practical budget may help you feel more prepared and confident about your expenditures. To begin, make a list of your monthly income and any fixed costs you may have, such as a mortgage or rent payment at home. From there, you'll need to gather some rough figures for accomodation, food, and basic living expenses in each town/city you intend to visit. This is the difficult part, because the cost of living varies greatly depending on the place you're going.

You should already have an idea of where you want to stay, so find out what is included and do your research on housing and other expenses in the country. Simply having a notion of the prices of housing and workspace vs your salary will offer you a far clearer sense of how much money you have available to spend.

The fundamental goal of budgeting is to keep your money on track. The easiest method to accomplish this is to keep track of every penny you spend. You will observe what you are spending your money on, what your true priorities are, and where you need to cut back.

Clear Your Debts

In today's day and age, it is all too easy to keep piling up debt especially post covid. Alot of people have been working from home and it’s been easier to spend on things online especially if you are someone who owns credit cards. Amassing debt has become a problem lately. People tend to buy goods and services that is not necessary most times. A recent research showed that people tend to be impulsive buyers since the epidemic. Persistent buying can pile up debt if one is not mindful about their finances.

If you are someone who wishes to travel and be a digital nomad, be mindful of debts. Make a good plan for your journey and finances so you don’t lose money. Always review your current spendings and categorise what is essential for you and what is unnecessary. Making this list will help you for a long time. This exercise will essentially help you manage your finances better while you are abroad. Make sure that you clear all your debts before you take the leap. This is not easy. We get it too but it would be so much easier if you are debt free before you make your travel plans.

If you are someone who wants a fresh start without having to worry about a debt baggage, its best to do this before making your travel plans. Travel is expensive and so is staying in another country or city. Even if you find cheap alternatives for stay, you still might have to pay for flight tickets and visas. So it’s better to get this sorted as soon as possible.

Making such a significant lifestyle adjustment is not without its difficulties. Consequently, with a little organisation and discipline, you will soon be able to develop both a short-term and long-term savings fund to enable you continue this beautiful lifestyle without worrying about your money.

In the next blog we are going to continue to talk about more ways to manage your finances without letting go of your digital nomad dream.

Happy Backpacking.