Personal finance for digital nomads is absolutely not a piece of cake. There are many unique lifestyles as digital nomads, meaning that it can be easy to get caught up in this “glamourous” lifestyle, and your bank account may just be the one to suffer.

However, if you are wanting to become a digital nomad, you probably know how important it is to have savings and to ensure you have a healthy cash flow into your bank account each month.

In this article, we are going to dive into personal finance for digital nomads, why it’s critical to your success in this lifestyle, and how I manage my finances as a full-time digital nomad, travelling and working on the road full-time.

Geo-Arbitrage

Geo-arbitrage is one of the most important concepts for me as a digital nomad and the reason why I left my home country and started travelling the world over six years ago.

If you don’t know what geo-arbitrage is, this concept is where you make money in a strong currency, and you spend the money in a country with a lower currency where the cost of living is less.

This is a concept I first heard discuss on Millennial Revolution’s finance blog years ago, and this concept was the reason I moved halfway across the globe, from Canada to China.

I realized by living in a country where the cost of living was less, I would be able to easily save more money each month, meaning I could invest those extra dollars in something that would bring money back to me in the long term… dividend stocks and ETFs!

And the even more beautiful part of the story? Since the cost of living was so much less in China than in Canada, I could save money for investments and still live an amazing lifestyle in China. Back in Canada, I never thought this was possible – I felt like I had found a gold mine with my new tool, geo-arbitrage!

If this is your first time hearing the concept of geo-arbitrage, I highly recommend thinking of where you are now in the world. In what countries you could make money in a good, stable currency, and where could you live where that money could go further? Hint, there are tons!

If you are in a Western country, this could look like moving to South America or Southeast Asia, where the cost of living is much lower… having an affordable apartment and eating affordable food and groceries so that you have more leftover in your bank account at the end of the month.

If you are from a country with a medium salary, I recommend for you get creative and think about where you could go that it would cost less, where you could still enjoy your lifestyle.

I also implore you to start thinking about what skills you have that could make you money in a higher or more stable currency… with the internet, anything is possible these days, and skills are in demand every day.

This applies to both those from Western countries or otherwise… what skills do you have that you can monetize, so you can work from anywhere in the world, make money online, and live out your ideal lifestyle?

Minimalism and Personal Finance

The next concept I will share when discussing personal finance for digital nomads is called minimalism. Minimalism has become quite popular in the last few years; however, the concept of minimalism is decades, even centuries, old.

Personally, I have personally always been quite minimalistic, no matter where I am in the world. For me, this concept came naturally, and I was able to easily integrate minimalism into my digital nomad lifestyle.

However, if minimalism does not come naturally to you, that doesn’t mean that it doesn’t have to.

I encourage you to start thinking about what brings you joy in your life, as Marie Kondo would say, and what things you own that don’t bring you joy.

Another aspect of minimalism that I love this that it clears my headspace. When I have a clear mind, I am free to do my best work, and having fewer things in my life generally means I have fewer “things” to clutter up my life so that I am free to work online as I please, with a clear mind.

Since we move to a new hotel every few weeks, minimalism also means that I, of course, have fewer physical items to pack up each move. I now emphasize collecting photos and experiences over things, because I just can’t pack everything!

I love minimalism for all of the above reasons, but also because it just saves me more money. I don’t feel a need (or have the space) to buy new clothes, furniture, skincare products, etc each month. I will just need to leave them behind.

Budgeting and Spending for Digital Nomads

Of course, we can’t talk about personal finance for digital nomads without talking about budgeting and spending; one of the most critical parts of knowing where your hard-earned money is going each month.

I highly recommend having a tracker of some sort that you use daily if you want to keep track of your expenses and income.

It is important to know that if you want to live a digital nomad lifestyle, you are going to have to have a good handle on how much money you are bringing in each month and how much you are spending.

There are different ways to track this, and I recommend figuring out which way is best for you. Personally, I have tried various apps and software programs, but what works best for me is a good old-fashioned spreadsheet.

I use Google Sheets and had an income and expenses spreadsheet custom-made for me, as I was not able to find exactly what I was looking for online. You can purchase my spreadsheet for lifetime access if you want to start tracking both your income and expenses and keep on top of your finances as a financially informed digital nomad.

One struggle I had in finding the perfect finance tracker was that most trackers are built for budget tracking, meaning they will only track your expenses. I also felt it was important to track my income in an easy spreadsheet so that I could at a glance see my monthly income, expenses, and how much money I had left at the end of the month, which went directly into my bank account.

If this sounds like something you are seeking, but perhaps haven’t found the perfect tracker for you yet, this could be exactly what you need – I know it’s what I needed.

Conclusion

These are my top tips for personal finance as a digital nomad, however, this could easily become a never-ending list. If you are looking to become nomadic, this is one of the most important topics you need to consider before you begin your journey.

Just remember… don’t overlook your finances as a digital nomad, or you may not be a digital nomad for much longer!

Learn More

If you want to learn more about becoming a digital nomad, creating a business you are passionate about, global taxes, and entrepreneurship, check out the links below:

The Work, Wealth and Travel Podcast

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Also Read

Ultimate Guide to the Best Digital Nomad Visas

Opening a Bank Account in the Country of Georgia

What Is Geo-Arbitrage: An Introduction