Traveling the world, working from beachside resorts, never getting stuck in a rut – the nomadic lifestyle looks genuinely magical from the outside. However, as any digital nomad will tell you, it comes with plenty of troubles of its own.
To enjoy success and make this unique way of life work, you have to keep your finances healthy and in order. With this in mind, we’ve checked in with a group of successful long-term nomads and condensed their advice into the following five core tips:
1. Do the right thing with your taxes
This is one of the most complicated aspects of the nomadic lifestyle, but it’s crucial to get right. If, for example, you’ll be taking a working holiday in Australia, line up one of the best tax agents in Sydney or Melbourne to help you get your tax return right. Complicated residency criteria, foreign tax credits, and other factors can make digital nomad tax returns complicated, so it’s worth investing in expert support. You don’t want to end up on the wrong side of a tax audit, so always make sure you do the right thing.
2. Look for longer stays
It’s perfectly fine to treat yourself to a few whirlwind trips, but if you’re looking to save money, longer stays are where it’s at. This means finding countries that offer longer visas and then finding house sits, homestays, or cheaper long-term rentals.
House sitting is a fantastic way to save money as you won’t have to pay any rent. However, you will need to do at least a little caretaking (often including care for pets), so be sure to factor that into your schedule.
3. Live like a local
While it’s nice to connect with other travelers, you’ll generally find that the touristy areas and ex-pat communities come with inflated rental prices. Everything from food to motorbike rental is usually more expensive in these areas as well, so you’ll end up paying more for many things.
Living like a local gives you a much better chance of saving money on most of your expense categories. This is especially true if you learn at least a little of the language and make a genuine effort. You’ll likely open up more enriching travel experiences while you’re at it.
4. Set small and large financial goals
Your goals should relate to building investments, earning more, and spending less. For example, you might have an overall goal of saving $100,000 in two years, with smaller goals that’ll help you get there. Having a no-spend month could be one small goal. Building a $20,000 emergency fund could be another. Then you could set monthly goals for adding to your investment and retirement accounts.
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5. Quit expensive addictions
You may notice that a lot of backpackers and digital nomads smoke, drink, and live on caffeine, especially in countries that don’t tax these commodities to oblivion. However, even when they’re cheap, the cost of indulging in these substances can add up to an eye-watering amount. Then there are the future health costs you can look forward to as their long-term effects take their toll.
One of the joys of traveling is discovering that you don’t need booze to have fun or coffee to concentrate. Of course, you don’t have to live a monastic lifestyle. However, it’s worth taking advantage of the natural highs of exploring new horizons – the money savings alone are well worth it.
Put these tips and hacks into action, and you’ll be a few steps closer to the life of financial stability and flexible freedom you crave.