Ways to Manage and Save Money as a Digital Nomad (2)

Deciding to go is the first step to a new life as a digital nomad, but you won’t get far on good intentions alone. Becoming a location-independent person means having organized finances as the costs can be high at the start of the journey. Here we break down the practical steps to budgeting before you go and all the tools you'll need to manage your money while you work abroad. As a beginner digital nomad, take your time to do research, plan and prepare your finances ahead.

Being a digital nomad comes with a lot of costs. It sure is an unpredictable journey as pay might be unstable and projects might vary. It can be stressful to travel and also at the same time figure out your finances. As mentioned earlier, various factors contribute to this. The value of currencies, accommodation, travel costs, data packages, etc. One has to also be aware of taxes in another country as well as laws regarding visas. All this can be mentally exhausting so it's important to do your research so you don’t waste any money.

1. Create a Backup Plan.

To back up money, you need first to know how much money you spend and what you can save monthly. Calculate your expenses for the few months ahead. We know that you might have to make some initial spending. But post this, you should be aware of your savings and manage accordingly. Make sure that you have enough money as a backup for at least six months. Get your vaccinations and insurance ahead of moving. Check the expenses and add them to your list. Depending on the country, the expense for the visas also varies. Although most countries let you stay for 30 days, check the costs incurred for visas in other countries. Your gadgets play a major role when it comes to finances. It’s possible to have situations where you might lose your laptop or it might get stolen. Make sure you have backed up all your data securely on the cloud or other platforms so that you don’t have to spend so much on retrieving data just in case that happens.

2. Set Limits.

It might feel all sparkly when you enter another country and it’s alright if you want to try the expensive touristy restaurant destinations initially. But if you plan to be in a place for more than a few months, you might want to start eating like a local. Initially, you might find it hard to get used to different cuisines but with time, you will get accustomed to flavours and cuisines in another country. Try authentic foods from local shops which are also cheaper. Meeting someone who is a trustworthy local is a way to spot really good eateries that are not expensive during your stay. Another great option is to cook your meals. This not only saves money but also allows you to experience local fresh produce that’s unique to that region. Also when it comes to accommodation, opting for hostels is a great way to cut down costs. This can save you a lot of money. Also, CouchSurfing is a great way to save money on rent. In this way, you can utilise the accommodation money on other activities that you would want to do in another country.

3. Know your Banking Needs.

Neobanks are the greatest banks for digital nomads. Neobanks are essentially financial technology firms, rather than banks. They only function online and make it easy to complete your routine banking. Because they do not have large overheads, they may provide lower (or no) fees and often specialise in a certain sector of finance. This is why they are ideal for digital nomads. They are easy to handle, more honest with clients, and deliver services that traditional banks cannot give. Some of the best banks for digital nomads include Revolut, Wise (formerly TransferWise), N26, Chime, Monzo, Monese, Charles Schwab, Capital One and HSBC.

Financial technology firms (or 'fintechs') are bridging the gap between what traditional banks provide and what clients now desire. Fintechs for digital nomads offer a viable alternative to traditional, location-based banking systems, which frequently lack functioning online services.

4. Get a Travel Insurance.

If there’s one thing that can help save money, whether you are abroad or in your country is insurance. But while you travel, it’s all the more important to have travel insurance. Now, this might seem like an additional expense when you do it but trust us on this - you never know when things can go wrong. You might be thinking of saving money and not having insurance is not the way to do it. You have great affordable options, especially for digital nomads. In one of the earlier blogs, we mentioned World Nomads and SafetyWing. These are one of the best options in the post covid world. Even a simple doctor’s appointment or medical check-up in a foreign country can be super expensive. If something critical occurs, you might find yourself in a lot of debt if you do not have insurance. So it’s important to have insurance for sure if you are planning to stay for more than a while in a foreign country.

5. Taxes!

A lot of countries are giving tax benefits to attract digital nomads to boost their economies. These new digital nomad programmes/visas not only provide tax reductions but also other perks that make digital nomads want to stay for longer in these destinations. Digital nomad visas enable individuals to stay longer and also provide tax reductions. These are the main advantages. Many countries are offering long tourist visas but they do not have any tax benefits. Digital nomad visas don’t let you work from the host country instead your income should come from outside the country. After 183 days, you become a tax resident of the new country and you will not be anymore a tax resident of your home country. Since some countries have the benefit of no tax, you do not have to pay taxes or probably will have to pay a reduced amount. So, it’s important to do your research on the tax policies of different countries.

These are some of the best tips one could use for managing money while going around as a digital nomad.