Living as a digital nomad opens the door to new experiences, cultures, and adventures. But before you dive in, it’s crucial to get your finances in order. Whether it’s managing exchange rates or securing reliable travel insurance, proper financial planning is key to a smooth journey. Here are four finance tips to help you thrive as a digital nomad.
Understand the economics of each destination
Create a realistic budget
Understand your banking needs
Diversify your income
1. Understand the economics of each destination
You don’t need to be a financial expert, but knowing the economic landscape of each destination is essential for avoiding financial surprises. Start by researching the cost of living in areas you plan to visit, including expenses like groceries, accommodation, transportation, and utilities. Websites like Numbeo and Expatisan can offer insights into average costs in different countries and comparisons between cities.
Don’t forget about taxes. In some countries, you may be required to pay local taxes, especially if you work for companies based there or stay for extended periods. It's important to know the local tax rules to avoid fines or unexpected bills. Always do thorough research from multiple sources before settling in. bunq’s AutoVAT feature makes managing taxes easier by automatically setting aside part of your income in a separate account, ensuring you’re prepared when tax season arrives.
2. Create a realistic budget
Budgeting is one of the most important skills for a digital nomad. Start by analyzing your income and expenses, and set realistic financial goals for your travels. Ask yourself key questions:
When creating a budget, ask yourself:
What are your starting funds?
How often will you earn, and will it be consistent?
Do you prefer daily, weekly, or monthly budgets?
Where are you likely to overspend?
Organize your expenses into three categories: fixed, fluctuating, and incidental.
Fixed costs:
Accommodation (Rent or mortgage)
Travel and health insurance
Phone and internet plans
Emergency savings
Fluctuating costs:
Flights, visas, and transportation
Food and entertainment
Health and wellness
Incidental costs:
ATM fees, exchange rates, and transfer fees
Taxes, tariffs, and other hidden charges
If budgeting feels overwhelming, bunq’s Easy Budgeting tool can simplify the process. It analyzes your spending, suggests saving tips, and helps you create dedicated savings accounts for each goal, so you can manage your money without stress.
3. Understand your banking needs
Once your budget is set, focus on banking. As a digital nomad, your financial needs differ from those working traditional jobs; you’ll need a bank that offers flexibility, security, and international accessibility, like bunq. Here’s what to look for:
Security
Your bank should prioritize the security of your funds. With bunq, your money is protected up to €100,000 under the Dutch Deposit Guarantee Scheme (DGS). Plus, the bunq app allows you to freeze and unfreeze your cards or change your card details instantly if needed.
Digital Accessibility
As a digital nomad, it’s essential that you can manage your account from anywhere, at any time. With bunq, you can handle your cards, payments, and personal details through the app. You can even block your card or change your CVC code if you suspect any fraudulent activity.
24/7 support
Access to customer support is vital when you’re traveling across different time zones. Bunq offers 24/7 customer service, and Finn, your personal assistant, is always available to answer any questions or help you troubleshoot issues.
Localized features & benefits
If you’re constantly moving between countries, you’ll want a bank with features that make international banking easier. Bunq supports 5 Local IBANs and 22 Local Currencies, allowing you to receive payments and spend money without worrying about exchange rate fees.
4. Diversify your income
As a digital nomad, finding multiple income streams is key to financial stability. Freelancing, remote jobs, consulting, and side gigs like house sitting or dog walking are great ways to earn extra money while traveling. You might also consider investing in stocks, cryptocurrencies, or other assets to create passive income.
Platforms like Upwork, Fiverr, and Remote OK can help you find freelance or remote job opportunities. If you have specialized skills, like web development, graphic design, or writing, you can often charge premium rates, increasing your earning potential.
If you’re looking for flexible options, consider participating in the gig economy. Apps like Rover (for dog walking) or TrustedHousesitters (for house sitting) can provide quick ways to earn money while you explore new destinations.
Conclusion
With the right planning, mastering your finances can open the door to a life of financial freedom. By understanding the local economy, creating a budget, choosing a bank that supports your lifestyle, and diversifying your income, you can thrive wherever the road takes you. Now, grab your passport and set out on your next adventure with confidence!
