Budgeting for the Digital Nomad Lifestyle


Digital nomad hiker relaxing on top of mountain.

A successful digital nomad journey begins with planning for your travel and living expenses. This guide will teach you how to budget for the digital nomad lifestyle and long-term travel.  While some may argue that planning takes away from the thrill of spontaneity, this guide will help set you up for financial success and security.  

You can also use this guide to determine how much you need to earn from a remote job or freelance work to support your long-term travel plans.  How to find a remote job that fits the digital nomad lifestyle is covered in my Guide to Finding the Best Jobs for the Digital Nomad Lifestyle.

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Disclaimer: This article is provided for general information purposes only and is not intended to constitute financial or other professional advice. You should obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. Deskless Nomad makes no representations, warranties, or guarantees, whether express or implied, that the content in the publication is accurate, complete, or up to date. Please see the full Deskless Nomad Disclaimer

Choose your travel partners.  Discuss your collective travel needs.

  • Solo travel?
  • Travel with friends or partner?
  • Travel with family?

The first step is to figure out who will be your travel partners.  Will you be traveling solo, with a partner or friends, or with your children?  Your travel partners will determine the type of accommodation, number of bedrooms, internet bandwidth, etc. needed.

When you travel with multiple people or family members you may be eligible for certain discounts.  Sharing costs with travel partners can lower your individual expenses.  Knowing even one person in the country where you are staying and having someone to rely on will make you feel safer. Your travel partner may also have certain language skills you lack.  

One challenge of traveling with other digital nomads is you may need to juggle two sets of job requirements.  These may include WiFi speed and access, time zone differences, access to co-working spaces, etc.  Your travel partners may also want your accommodations to have a different level of luxury (like a pool or beach access). It is useful to discuss these needs early with your travel partners to help in planning your budget.

Traveling solo may allow for more flexibility than traveling with others but can be lonely at times.  You may want to consider options like co-living spaces where you live in a house with fellow digital nomads, flat shares where you share an apartment with a local roommate, or work exchanges where you receive lodging and food in exchange for working 4-5 hours a day for a family or small business (doing things like working on a farm or helping a small hotel set up a website).

If you are traveling with your family you may need to plan for homeschooling or remote school online depending on the ages of your children.  This may also impact your internet bandwidth needs.

Family enjoying walking park. @monkeybusiness/Depositphotos.com

Choose how long you want to travel and decide if will you keep a home base.

The digital nomad lifestyle can take several forms depending on your desired length of travel and whether or not you want to keep a home base in your resident country. The location of your home base and if it qualifies as your “tax home” will have major consequences on how you pay taxes as a digital nomad.

Part-time travel while keeping a home base.  

In this model, you keep your home base in your resident country while you travel for part of the year.  Your home base is either a home that you own or a place that you rent in your resident country.  You can choose to keep it empty if your finances allow or if your travel is more short-term.  

One way to offset expenses is to rent out your home as a short-term rental via websites like Craigslist or sublet.com.  Alternatively, you can turn your home into a vacation rental via websites like Airbnb and VRBO.  This will require someone to help manage the property in between clients while you are abroad.  You will also need to make sure that local laws and homeowner’s associations allow short-term rentals. 

You can hire a vacation rental property management company such as Vacasa to take care of client needs and cleaning while you are away.  You may want to keep certain personal items in storage units or with family or friends.  Make sure to factor the costs of property managers and personal property storage into your budget.

Another option is to do a home exchange where you list your house on websites such as Home Exchange or Love Home Swap and then send an exchange request to other website members.  This will allow you to stay in other people’s homes for free while traveling abroad while offering your home in exchange (there is a small website membership fee).

Infographic by J Dubois, “Part Time with Home Base”

Part time travel with intermittent stays in home country without a home base.

In this scenario, you do not maintain a home base in your resident country but you do return periodically to stay in short-term rentals or with family.  You treat your home country as another destination, booking short-term rentals or sublets.  You may choose to keep your personal property in storage and access it as needed when you return from abroad.     

Full time travel with long term renting of your home.

In this option, you maintain a mortgage on a home in your resident country but you rent it out long term as a vacation property or to a single tenant (unless your finances allow you to keep it empty while you travel). 

Managing the property yourself can save money but is complicated and expensive if you are constantly traveling or in different time zones.  If something happens and your home requires repairs or servicing it can be difficult to arrange from abroad.  You may opt to use a vacation rental property manager or local rental property manager to save you these headaches. 

You can rent your property furnished or unfurnished but there may be personal items you prefer to keep in a storage unit.  Make sure to factor the costs of property managers, repairs, and storage units into your budget. 

Full time travel without a home base.   

You can sell all of your belongings and go all-in on the digital nomad lifestyle.  This is a big leap to take and you may feel more comfortable trying out the lifestyle in one of the other previous lifestyle models before taking this step.  

Before selling everything you own, a reasonable first step would be to put all of your belongings into storage while you try out the digital nomad lifestyle full time.

Vanlife – camping van on mountain in Switzerland

RV or Van Life with or without home base.

For those who want to be digital nomads in their home country or continent, an RV, camper trailer or converted van can provide amazing freedom to travel and explore.  This lifestyle allows access to remote areas that may not have short-term rentals available.  Some people have even shipped their vans overseas to continue van life abroad. 

Alternatively, you can rent camper vans abroad to explore areas that wouldn’t have been an option due to the lack of short-term rentals.  By using a mobile hotspot device, you can maintain internet access on your journey.  

Decide if you will travel on tourist visas or if you will apply for long-term tourist, freelancer or digital nomad visas for a single country or region.

When you are first starting out with the digital nomad lifestyle, it makes the most sense to try out different locations on tourist visas to get an idea if you would want to be somewhere long term.  Many tourist visas allow for a stay of anywhere from 30 days to 180 days depending on your resident country.  There are some exceptions like the country of Georgia which allows citizens of certain countries to stay up to a year without a special visa or Svalbard, the Norwegian archipelago, which is a completely visa-free zone.  

Applying for freelancer and digital nomad visas can be complicated and time-consuming but may be worth it if there is one place you would like to be for an extended period of time.  Digital nomad and freelancer visas for countries in the European Schengen zone allow for extended travel in other Schengen member countries as well. Make sure to understand the pros and cons of these programs before applying.

Stamps on passport.

Calculate your current annual expenses.

The next step in budgeting for the digital nomad lifestyle is to understand your current annual expenses.  Most people have no idea how much they are spending in various categories.  There are several apps that can automate this for you.  Mint and Personal Capital are two of the better-known ones.  After syncing all of your financial accounts, the apps will keep track of your spending and help you keep on budget.  In addition to monitoring your expenses and budget, [Personal Capital] also allows you to keep track of your retirement savings and net worth.  Pocket Guard is another good option that has both free and subscription versions.  

Although I have tried a couple of budgeting apps, I did not feel that they gave me an accurate picture of our expenses.  I found these apps frequently mislabeled expenses and I still had to go through and manually sort them.  I also did not feel entirely comfortable giving them access to all of my financial accounts.  

I recommend manually evaluating your annual expenses the first time you do it.  This activity requires knowledge of excel, google sheets, or similar spreadsheet programs and a small investment of time.  The advantage is it will give you an accurate snapshot and a better understanding of what kind of lifestyle you can afford.  This will be easiest if you mostly use credit and debit cards since you can easily download your statements online into an excel format.  

Start by looking at what you’ve spent in the past 12 months. Download your credit card, debit card, and checking account expenses in excel or another format from your financial websites.  Aggregate these, making sure the column labels are the same (date, account, description, category, and amount).

Next, label each expense with its corresponding category (rent or mortgage, utilities, phone and internet, car payments, health insurance, car insurance, home or renters insurance, student loan payments, credit card payments, food, entertainment, subscription services, etc).

Use the sort function to sort all expenses by category.  Calculate the sum of expenses for each category to see how much you spend in each category per year.

Decide which expense categories will continue while you travel.  Look at which unnecessary expenses you can get rid of like gym memberships, gaming subscriptions, streaming services that can’t be used internationally, meal subscription services, etc.  After removing unnecessary categories, sum your remaining base expenses.  Keep this information handy since you will need to add your base expenses to your expected travel expenses.

Make sure to factor in any additional taxes you may owe when working remotely while traveling abroad.

Infographic by J Dubois, “Digital Nomad Year in Europe”

Decide where you want to travel and how long you want to spend in each location in the next year.

Make a list of places you want to go in the next year and how long you will spend in each location.  Check the U.S. Department of State website to see if these countries have pandemic travel restrictions.  Your resident country will determine if you need to apply for a tourist visa and how long you will be allowed to stay in any given country.  If you are a US citizen, you can quickly check if you will need a visa and how long you can stay in each country here.

If you plan to spend time in Europe it is important to understand the Schengen Agreement and the new Etias visa waiver program for travelers to Europe starting in 2022.  European countries that are part of the Schengen Zone limit stays to 90 days in a 180 day period of time.  Even if you are visiting a different country every month, you can’t be in Schengen countries for more than 90 days in that 180 day period.  In order to stay on the European continent long-term on tourist visas as a non-EU citizen, you can plan to split your time staying in non-Schengen countries like Croatia and the United Kingdom.  

Infographic by J Dubois, “Schengen and Non-Schengen Zones”

Other popular digital nomad locations include:

  • Thailand
  • Vietnam
  • Indonesia
  • Singapore
  • Malaysia
  • Maldives
  • Mexico
  • Brazil
  • Columbia
  • Panama
  • Costa Rica

If you want to stay longer in a specific country you can research long-term travel visas or digital nomad and freelancer visas for that country.  There is some cost and lead time associated with many of these visas.  The country you are in when you apply for these visas may impact your ability to obtain them or the length of issue.  

You may want to consider the weather during the time of year you will be in each location.  Don’t forget to consider the expected tourism volume since this will impact flight and accommodation prices.  Traveling off-season will help you save money.  August is notoriously busy in many parts of Europe.  Thailand’s high season is November to March.

For each location make a table of expenses and start your research.

Two good resources to explore potential locations and their average costs of living are Nomad List and The Earth Awaits.  The Earth Awaits site lists average apartment prices in and out of city centers, broadband speed, and average utilities (electricity, heating, water, garbage, internet).  Most furnished short-term rentals will include utilities in the rental price. 

There are several great video resources on YouTube for the cost of living for digital nomads like this one about Croatia on $47/day, this one about France on $53/day, and this one about Thailand on $20/day.  Search YouTube for the cost of living and your destination of choice.

Remember that costs will vary widely with tourist seasons and as countries reopen after pandemic restrictions ease.  If you do your research you can find budget accommodations just about anywhere so you don’t have to restrict yourself to certain locations.  

When beginning your research for travel expenses make sure to check multiple sites for the best rates.  Also, consider the advantages of using a travel rewards credit card to book your stays.  Your travel booking may be covered by the credit card’s travel insurance and may earn you additional reward points.  Some rental sites will not be recognized as “travel” by these types of credit cards.  Some sites like hotels.com will list similar vacation rentals and offer loyalty rewards like free nights and additional savings.

Depending on how often you move between locations the biggest costs will be food, accommodation, and flights.  Focus on these first to decrease costs.  Learn to travel hack through The Points Guy blog.

Flights

Use google flights and Scott’s Cheap Flights as a starting point for finding the best cheap flights.  Flights may be cheaper if you fly into nearby cities and then travel by ground. Another great option is to buy round the world airline tickets

You may want to budget for blocking an adjacent seat or an entire row in economy so you can lie flat on long haul flights. Several airlines offer this option and it is a surprisingly affordable way to add a little comfort to your travel. Don’t forget to check out these other ways to make your economy flights feel like first class.

YouTube Video, “How to Find to Find Cheap Flights Using Google Flights”

Accommodation

I recommend starting with Airbnb to see the average price for an area.  Airbnb also lists accommodations with discounts for stays longer than 30 days.  Look at both the average monthly price for an area as well as the range for the lower half of prices.  Use these numbers as a comparison as you research on other websites.  Many of the same properties will be listed on multiple sites and have significant price differences. 

Check out my post on Alternatives to AirBnB for furnished short-term rentals for long-term international travel.  Read more about Alternative Accommodation Options for Digital Nomads like co-living, housesitting, and work exchange.

International phone and data plans, VPNs

You may be able to continue using your cell phone service from your home country but the expensive roaming charges and limited data can make this option unappealing.  Instead, consider getting your current provider to unlock your phone so you can purchase a prepaid data SIM card for international cell phone service.  I recommend checking out Google Fi, Orange Holiday World, Three UK, Surfroam, and KnowRoaming. For more information, check out my post on International Phone and Data plans for Digital Nomads.

Consider getting a VPN to secure and encrypt your data when you use your short-term rental WiFi or public WiFi networks. 

Local Transportation

Decide if you will use public transportation or lease a car for each destination.  Research local metro and rail passes. Car leases longer than 21 days will be cheaper but still may be prohibitively expensive in some areas. For more information, check out my post on how to find the best long-term car leases when traveling long term.

Travel Insurance and International Health Insurance

Some credit cards like Chase Sapphire Preferred/Reserve and the Platinum Card from American Express provide travel insurance and emergency medical insurance as a benefit.  The Points Guy has an excellent review of credit cards that provide travel insurance.  

Your current health insurance plan likely doesn’t cover costs you incur while abroad but may have an international travel add-on product you can purchase.  For example, BlueCross BlueShield has the GeoBlue add-on product.  Make sure your health insurance plan or travel insurance covers you in all the countries you plan to visit as well as covid quarantine costs if you test positive upon arrival or departure.  To learn more, check out my post on international health insurance and healthcare for the long-term international traveler.

Other Expenses to Consider

Some banks will charge you fees when you withdraw money from ATMs when traveling abroad.  Consider switching to a bank that reimburses ATM fees or has branches in the areas you will travel.  Make sure you use credit cards that don’t charge foreign transaction fees and have multiple credit cards available to use.  Some types of credit cards may not be accepted in some locations.  

Infographic by J Dubois, “Annual Expenses”

Make sure your income will cover your needs.

Look at your projected income to make sure you will have enough to cover your variable travel expenses as well as your fixed expenses for several months in advance.  Start an emergency fund for unexpected expenses or inconsistent income.  Make sure you can quickly book a flight home for a family emergency or in the event another pandemic wave arises.  

And finally, don’t forget to plan for taxes.

If you are self-employed or a freelancer, don’t forget to plan for quarterly tax payments.  US citizens can find more information on the IRS website for the self-employed. 

Jamie Dubois

I am a freelance writer, wanderer, kayaker, rock climber, and adventurer exploring the world on my own terms.

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