Making the choice to go may be the first step to a different life as a digital nomad, however, you won't get far on good intentions alone. Becoming a location-independent worker means having organized finances because the costs could be high at the beginning of the journey.
Here we break up the practical steps to budgeting prior to going and all sorts of tools you'll have to manage your money while you work abroad.
Clear your debt
Digital nomads with debts tend not to be digital nomads for very long. Before you go, attempt to clear any outstanding money your debt. The aim is, remember, to possess all of your money fully available to fund a lifetime of travel. For those who have a home loan and intend to keep the house or apartment, rent it out to pay for the monthly obligations and appoint an administration company to cope with all the admin. Look for landlord insurance packages which include an assured rent for any periods when you aren't able to find a tenant.
Build up a nest egg
Before you say "sayonara" for your old life, you will need to build up a cushion of cash to fund your start-up costs and cover you for emergencies while you build up your remote-working business. Through an emergency stash of cash to pay for replacing your laptop if it's lost or stolen is pretty much essential. Put on your accountant's visor and exercise just how much you need to get to your first destination and live for 8 weeks without any income whatsoever, adding 50% as a buffer.
Know your limits
Set yourself a minimum level your savings can drop to before alarm klaxons sound. If things go wrong and also you have to pull the emergency chute, having enough money to clear any outstanding costs in the destination, fly home, and fund yourself while you slot back into normal life will help you avoid more stress than you can put a price on.
When accumulating and maintaining your emergency fund, aim for enough money to pay for the following for at least two months:
★ Eating and accommodation costs
★ Internet access
★ Cell phone bill
★ Co-working space membership
★ Transport to in which you work
★ Funds to exchange your phone or laptop
★ Money for hospital bills in an emergency
★ Cash for a flight home
★ Living costs while you look for a job back home.
Managing your money overseas
However you choose to receive money, you'll need a safe and secure method to manage your hard earned money overseas. Most nomads receive money for an account that they can access on the internet, however for real-life day-to-day living costs, you need to be in a position to access your money, often in difficult currency. If clients are paying into a merchant account that charges you high fees for each overseas card payment or ATM withdrawal, a chunk of your hard-earned cash is going to be visiting the bank rather than supporting your digital nomad lifestyle.
Cash
No matter how much your destination has moved towards a cashless economy, you'll likely need use of hard currency for small costs for example coffees, snacks and trains and buses. The golden rule when withdrawing cash from an ATM overseas is to make larger withdrawals less often, to avoid repeated bank charges. Keep the hard currency safe inside a money pouch worn against the skin.
Credit and debit cards
The default way to purchase many travelers, credit and debit cards are easy to use and simple to cancel if lost or stolen. But pre-advise your bank if visiting a fraud-heavy location to stop your card being blocked, and monitor statements regularly in the event of card cloning. Also consider bringing a "clean" backup credit card (without any payments outstanding). Utilizing a prepaid debit card avoids transaction fees and punitive forex rates; top up from whichever account customers are paying into. Caxton FX, Revolut and FairFX are major prepaid players, but shop around in your house country, too. Where possible, make card payments in local currency to prevent the poor forex rates provided by retailers.
Pay by telephone
Apps such as Apple Pay and Google Pay work as digital wallets, allowing users to create contactless payments using the chip inside the phone. To use the apps, you'll need to load information on your debit and charge cards, but there are no additional fees along with exactly what the card issuers charge (the app company charges a little fee towards the card issuer however this doesn't come from your last). The down-side? Mobile payment only works at locations that are positioned up for contactless payments.
An emergency stash
Store a supply of cash in $ $ $ $, UK pounds or Euros hidden somewhere safe like a last-ditch emergency fund, in the event you do not have access to your accounts (think power cuts, communication blackouts, political unrest). Travelers checks also work for this function, and also have the benefit that they can be replaced when they get lost or stolen, but they're receding of favor with travelers and therefore are accepted by fewer and fewer outlets.
Best money apps for digital nomads
★ XE The earth's most popular currency exchange app offers real-time exchange rates between every global currency, and stores the last-checked rates for your 10 favorite currencies for times when you can't get online.
★ Trabee Pocket A travel expenses tracker to help you keep an eye on incomings and outgoings, and split your costs into different categories – handy for spotting in case your beer finances are pushing you within the limit.
★ Splittr Designed for categories of travelers sharing costs and splitting bills, Splittr also works as a tool for monitoring your own non-business travel costs.
★ WeSwap Combining an app and a pre-paid card, WeSwap uses peer-to-peer gets in eliminate the expense of dealing with normal foreign exchange channels. There are 18 supported currencies, exchange fees are modest, and exchange rates are better than on the high street – but you will need to wait seven days to gain access to your hard earned money, or pay a fee.
★ Starling Halfway between a bank account and a pre-paid debit card, this UK-based mobile-only bank charges no fees for overseas ATM withdrawals and card transactions created using the contactless Mastercard that comes with each account.
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Lonely Planet's ultimate digital nomad packing list
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Everything you need to consider before being a digital nomad
