- please note this guide was written in 2020, pre-covid. please use common sense when reading this guide to allow for current circumstances
So you want to be a digital nomad? It’s totally possible, and nowadays easier than ever if you are ready to restructure your lifestyle and live outside pre-existing societal frameworks and create a schedule that works for you. However, it can seem overwhelming with so much information on the internet and no idea where to begin. If you’re ready to work from anywhere in the world but don’t know exactly where to start, you are in the right place. Keep reading and you will learn how to be a digital nomad and travel the world this year!
When I was interested in becoming location independent I read so many different books & guides, scouting comments on Facebook groups trying to learn the secret of how people were traveling to these amazing destinations and making a full-time income. Overwhelm is the antithesis of action. I’m here to help you break it down into organized, step-by-step actions you can take to begin your life of travel by combining my 3 years of travel into one manageable guide.
We will do this over a timeline that works for you so that you’re not stressing about your expenses in the first year and have momentum going by the time you get on the plane!
I have broken this guide into 5 manageable sections, and recommend you follow them in this order! I recommend giving yourself a day or so on each category to digest and implement accordingly.
- Get ready! — Optimize, Allocate, and Streamline Expenses
- Unlock your potential — How to discover your profitable freelance niche for success
- Join a community and find your tribe for support and inspiration
- Manage your time — Build systems & strategies around freelancing
- Choose a destination & design your lifestyle (+ hacks)
This article is for the person that wants to make working and traveling a lifestyle. You’re dreaming about becoming location independent and ready to make it happen! So let’s get down to the nitty gritty…
Day 1: Optimise, Allocate & Streamline Expenses
Don’t quit your job just yet! Let’s work with what you have before taking the nomad leap. Before getting started I recommend not only spending more intentionally but optimizing your current financial habits.
I recommend tracking your monthly expenses, multiplying by a minimum of the months you plan to travel, and having that much saved up before you go. Six months of living expenses for six months of travel, minimum. This will give you half a year to begin making money on the road. If you don’t track your expenses, not to worry! I’ll show you how in a minute.
How to budget with intention, optimize money + create space for your nomadic trip:
LESS IS MORE. I firmly believe in this. Less stuff, less baggage, less to think about = more time to enjoy traveling and be present in the moment.
I suggest getting really intentional about your spending and being more mindful before making purchases. You can try to cut out the little things like daily coffee. I KNOW, I know, miss death before decaf talking about cutting down on coffee over here seems hypocritical, but saving five dollars a day really adds up to $150~ a month. There’s your plane ticket to Europe right there!
Track every purchase you make
If you’re going to be a digital nomad and travel the world, it’s time to begin tracking all of your expenses and getting familiar with your spending habits. I use an app for this called Trip Wallet, it allows me to track all of my expenses by category and location so I can see how much I’m spending on each category and sort it by location.
My categories look a little like this:
Coffee & Cafes
Beauty & Wellness
It’s pretty handy so I can then compare the cost of living in the places I’ve been and after a few weeks it becomes second nature, especially for purchases made by cash that aren’t trackable automatically. (Click here to read about my favorite travel apps.)
I also use You Need A Budget to track my expenses on autopilot by connecting them to my bank accounts and categorizing them once a month. This is such a mindset shifting budgeting tool that will change how you view and manage your money. You assign a job to every dollar you spend, and always know where you stand financially.
I recommend taking your monthly expenses, optimizing them with the tips below, and then creating a figure you should aim to stay under for your daily budget. This will include rent, food, transportation, and other travel expenses.
You can do this by looking at your monthly income or saved expenses for your total months of travel, and divide your monthly number by 30.
This will give you a daily budget you can keep in mind when spending ~ and you can set the amount in the Trip Wallet app which will alert you when you’ve reached your limit for the day.
- After you’ve examined your little daily expenses that add up, try looking at your biggest monthly expenditures and either eliminate or combine them (how about sharing your netflix and spotify membership with a friend?) Do you have any monthly subscriptions you’ve forgotten about? I bet you there’s a few!
- Have a car? Call your car insurance company to see if you can get a lower rate. Even better, see if you can freeze it while traveling ~ if your state allows. I saved $20 a month on car insurance just by calling and asking if they could match a competitor’s rate (they did) and adding renters insurance actually allowed for a discount! It’s about $10 a month, and covers your personal items while traveling. Totally wish I knew this sooner!
- Consider downgrading your car or renting it out while you’re on the road. There’s an app called Turo that makes that handy. It’s also a nice way to rent a car while traveling.
- Start going through all of your belongings through the eyes of Marie Kondo, and ask yourself if each item brings you joy, and if you’ve used it in the last month. If not, is it replaceable? Does it have tremendous sentimental value? If no to both, consider selling it or donating it.
Before traveling I sold pretty much all of my belongings except for a couple of boxes and didn’t miss any of it and when I came back I ended up selling most of what was in them anyway. I realized I didn’t really need it and had collected new, meaningful belongings from around the world.
- Take inventory of your full-size “necessities” and ask if they will make good travel companions. The smaller the better. For instance, I had a huge DSLR camera that took up a lot of room and weight in my bag, and sold a lens in exchange for buying a mirrorless camera that still took wonderful images at a fraction of the size and cost. I still have my Canon 5D Mark ii but use my mirrorless Sony a6000 on trips for a more lightweight option.
Allocate your income for success + earn more in interest
It’s important to have a good system going before taking the leap. We will begin specifically allocating a percentage of your paycheck (and the $ from all your “stuff” your going to sell) in high-yield savings account separate from your other expenses.
I recently read a book called “I Will Teach You To Be Rich“ and despite the scammy sounding premise of the title, it’s a very pragmatic guide for getting financial systems in place and allocating money towards your spending goals. Once you set up a system that works for you, you can relax and know it’s being automatically taken care of every month. It’s nice to have a hassle-free system that supports your lifestyle and allows you to make money in interest while you’re sleeping.
Making your bank accounts work for you
One of the first things I did was to make sure I had the best bank accounts to support my digital nomad lifestyle. This meant seeking out accounts with no minimums, no international fees, and higher interest rates. Yes these accounts DO exist and no they’re not the banks that you’ve probably heard of, and there’s a reason for that. The big banks usually don’t have big benefits.
As I am a highly visual person, I like to see where all of my money is going, and separate and allocate accordingly. I enjoy seeing little bundles of money so I can sleep easy knowing I have enough in my “student loan account” for the next 6 months.
Therefore, I have one account for business, one account for my daily expenses, one account for savings, and another just for student loans. This might look a little bit different for you but it’s important that you create systems around your lifestyle and spending habits.
Even if you haven’t started making freelance income yet, it’s still a good idea to get your accounts ready to go so you are ready to begin making money when the time comes.
Here are the accounts that I use and my favorite banks:
No ATM fees worldwide, high-interest rates, no maintenance fees
*I’m not a financial advisor in any way. This is just what I do and it works well for me.
- Radius Bank – Rewards Checking Account (use promo code: CHAL97C2F2 for $50 upon account opening)
I keep 2 months of expenditures in this account and allocate 20% of my income here every month. This is my spending money. There are no international fees, unlimited free ATM withdrawals monthly from ANY ATM worldwide, no minimums, and a decent interest rate of 1.00%
- Capital One – 360 High-Interest Performance Savings Account
I keep most of my money in this account and set up “savings goals” depending on what I’m targeting. There’s no minimums, no fees, 6 transfers allowed a month to a checking account, a mobile check deposit, automatic savings plans, and a high-interest rate of 1.9% compounded monthly. This means you will get back $190 with a balance of 10,000 a month. Free money, wahoo!
- Citizens Bank OR your local bank *optional but recommended if you have a large amount of money to pay off, such as a student loan*
I have a local bank just for student loans, and in case I need to deposit cash. I transfer $450 to this account every month, as this is what my monthly loan payment is. It’s shit, but I gotta pay it right? This is the only thing I use this account for, and I keep at least 4 months of loan payments so I don’t have to think about setting my money aside from my checking / travel account.
- Charles Schwabb High Yield Investor Checking Account (& Roth IRA)
This will be your primary account for all things business / freelance related. You could also use this checking account in place of Radius if you wanted, as it has virtually the same perks. This account will house all your business income, and you will set up automatic payments to allocate accordingly in the accounts above. The remaining funds left in this account will be for business expenses and taxes, ideally.
You just need to open an investment account with it (you don’t have to use it if you don’t want to) but I do recommend opening a Roth IRA as it’s smart to begin investing even if it’s a tiny amount. Just putting aside $50 a month now could lead to hundreds of thousands come retirement. You can read more about this in I Will Teach You To Be Rich — I’m just dipping my toes into the world of investing.
Having these accounts and processes have enabled me to save money on fees, travel around not worrying about currency exchange, and benefiting from travel rewards and perks from my credit card.
The “Travel Hacking Secret” that has rewarded me $3500 to date in free flights
The name of the game is this:
- Use a credit card for all personal expenses
- Pay it off in full each month. Don’t accrue interest. Reap the benefits of free flights, insurance, lounge access, and other travel perks.
The Best Credit Card For Travel Perks
Drumroll please…. I use Chase Ultimate Reserve card. I also recommend the Chase Saphire Preferred for the less intense traveler, who wants a less expensive card with similar rewards but a lower fee. I’ve linked to the pages where you can read all about the features, but here are a few benefits of why I love this card:
– Welcome bonus worth around $750
– Annual $300 travel credit (on anything travel, ubers, the subway, gas)
– Priority pass lounge access worldwide (helloooo free food + drink!)
– Free global entry and pre-check
– Trip delay + cancellation coverage
– Rental car coverage
– 3x points on travel, dining + transportation
Honestly, I’ve used this card for the last 3 years and benefited from so many travel perks! The free lounge access has saved me after say, a 13-hour flight when the need for a shower was REAL. Thank you hong kong lounge.
I’ve taken advantage of the trip delay coverage which meant a $1000 allowance to stay in Mexico *in style* for three more days when the weather was bad back home, and the rental car coverage which has saved me money on those *optional* car insurance plans while traveling.
Streamline your expenses
Again, the goal here is to pay off your credit card in full every month and carry no balance, otherwise, you’ll get hit with interest which you definitely don’t want to pay. Link your monthly payment to your Radius / Charles Schwabb checking account to automate monthly payments so you don’t have to think about it.
Come up with your system and stick to it. Have your “money in” account (your freelance checking) and either automate or manually transfer money out to your checking, savings, and loan accounts. All of your personal expenses should ideally go on your credit card and automatically paid off in full every month.
You can get a bigger overview of this system at work at this blog post here: Building A Bulletproof Personal Finance System. The guy who wrote it also wrote the personal finance book “I Will Teach You To Be Rich“ that I keep referencing.
Track your expenses. Every time you make a purchase, enter and categorize accordingly in the Trip Wallet app and / or YNAB. After a few weeks of this, it will be an automatic reflex.
To recap, my system looks like this:
1. Optimize spending habits to create money for what you value, in our case experiences over belongings
2. Allocate money automatically into separate accounts that support your spending habits
3. Streamline by tracking your daily spending, categorizing and being mindful of your purchases
The first step in becoming a digital nomad and traveling is getting a clear system working for your finances as they will give you a clear picture of what you have available to spend money on! Do this before you leave if possible so you don’t have to worry about making those phone calls internationally.
Seriously, no one teaches us about personal finance in school, and it’s worthwhile to pick up a personal finance book and learn! Money is one of the biggest stressors for us and it feels SO much better to have a system going that you don’t have to stress about, that is working for you and requires minimal maintenance.
In day two, we will begin to dive into the exciting stuff, developing skills to take on the road with you to make traveling a lifestyle that you can sustain.
Day 2: Discover Your Profitable Freelance Niche for Success
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Christine is a twenty-something coffee-obsessed solo traveler from a small town on the east coast of the US. She sold everything 4 years ago to follow her curiosity around the world.
As a passionate creative entrepreneur & digital nomad, she has explored it all! Her mission is to help others create and live their dream lifestyles aligned with their values and ultimately, create more sundays in their everyday.
Thanks for the info and tips, financial stuff is always a bit more comolex for me. These banks and systems, though, do you have to be a US resident to be able to use them or are they open to internationals?
Of course! It was for me too. I do believe they are US specific, but you’d have to check if your country is eligible through their websites.