Anyone who dreams of ditching the 9 to 5 and hitting the open road knows that one obstacle stands out among the rest: money. However, as remote work continues to grow in popularity, many employees have begun jetting off the mid-work week, logging on from foreign lands, allowing for continual cash flow.
Though transitioning to full-time digital nomad life can be a liberating experience, it also requires a firm grasp of budgeting. Fortunately, with a little bit of planning and some creative thinking, it’s possible to fund your digital nomad lifestyle.
When budgeting for your digital nomad lifestyle, the first and most important step is calculating necessary accommodations, like boarding. Wherever you go in the world, housing will be one of your most significant expenses.
Do your research
Before you book anything, make sure you’ve researched extensively. Not all housing is created equal, and you’ll want to find something that suits your needs and your budget. Once you have an idea of what’s available, you can compare prices and scour the web for discounts.
Consider your options
When looking for accommodations, consider your circumstances. Are you hoping for a long-term solution? Or maybe a month-to-month lease? Depending on your travel needs, you may want to consider top-rated hotels, couch surfing, or Airbnbs. You could also look into long-term rental options such as apartments, rooms, or even house-sitting arrangements.
Think about your location
When budgeting for your digital nomad lifestyle, take your location into account to avoid overspending on housing. Where in the world do you want to go? Are you looking for a more affordable, underrate destination, or are you willing to splurge on popular tourist spaces?
Cost of living
Another vital factor to consider when budgeting digital nomadism is the cost of living in your chosen location. Some cities are notoriously expensive, such as London and New York, while others are much more affordable.
Before committing to an overpriced area, spend time researching the cost of living in your ideal city and compare prices to your budget.
During your research, take special note of transportation options to ensure you can navigate the area around you. For example, some cities have excellent public transit options, while other destinations require a personal vehicle to get around town.
Or, you can opt for a bike or scooter as an environmentally friendly option. Whatever you decide, make sure your new home accommodates your mode of transportation.
Bills and expenses
Remember to factor in the cost of bills and expenses when budgeting for your life on the open road. Things like internet, phone, and transportation costs can add up quickly without proper planning.
While some expenses, like flights, can be easily estimated, others costs, like food and entertainment, are more unpredictable. Ultimately, budgeting appropriately is critical to ensure you can cover the cost of living.
Of course, one of the most important things to consider when creating a financial plan is your income. If your current position is online and reliable, this may not be a significant issue to solve going forward.
However, if you’re planning on making a complete career change, you’ll need to engage in thorough research and formulate a solid plan for earning an income on the road. Fortunately, there are plenty of opportunities to make money while exploring the world, like freelancing, blogging, or working as a remote employee.
Don’t forget about retirement
Just because you live the digital nomad lifestyle doesn’t mean you can forget about retirement. Unfortunately, some remote employment opportunities are exempt from retirement packages and planning. Still, you need to plan and save for your future.
First, consider setting up a retirement account such as an IRA or 401k. You may not be able to contribute as much as you would if you were working a traditional job, but every little bit helps. Additionally, make sure you have a solid plan for how you will withdraw your money when you retire.
Budget for emergencies
Finally, no matter how well you plan, there will always be unforeseen expenses that pop up. That’s why it’s essential to have a budget for emergencies. Whether it’s an unexpected medical bill or a last-minute flight change, you’ll be glad you have some extra cash set aside for unanticipated accidents.
The best way to budget for unforeseen circumstances is by creating separate savings account for emergency use, making sure you contribute funds monthly.
As you can see, there are many things to consider when budgeting for the digital nomad lifestyle. It’s essential to do your research and plan, from finding the right location to making sure you have a solid income. However, you can make the digital nomad lifestyle work for you and your budget with a bit of preparation.