If you’re an avid traveler, you already understand the importance of saving money and traveling on a budget. You’ve probably even bragged to your friends and family about your unique ability to find great hotel deals and score cheap flights.
But when you’re a digital nomad, saving for your next trip is only a small part of managing your money. In fact, many digital nomads run into money problems within their first few months of being abroad.
These money problems usually occur because their lifestyle provides them with so much freedom that they forget to create a solid budget plan for themselves. This is especially common with digital nomads who are now living in a place where things are much cheaper than back home. One minute, they’re spending money recklessly because they can afford everything. The next minute, they’re wondering if they should just pack up and head home.
Fortunately, this digital nomad fate is easily avoidable with a solid budget and a little bit of discipline. So to make sure that you’re making and saving enough money, we’ve created a travel budget template designed specifically with digital nomads in mind.
Click here to download the budget template and read on for our advice on what to consider when filling it out.
Choose Your Digital Nomad Destination
Fortunately, the first step of creating your budget is the fun part of being a digital nomad: picking a place to live.
However, choosing your destination isn’t just about whether you prefer cities, beaches, or mountains. When selecting your digital nomad city, try to think about the lifestyle you intend to lead. Will you be working in cafes or coworking spaces? Will you be renting an Airbnb or living in a budget-style accommodation? Will you walk and take public transportation or rent a motorbike?
Try to picture your day to day life so that you’ll know what to consider when it comes time to creating your digital nomad budget plan. If you need some inspiration, we’ve already created a list of the world’s best cities for digital nomads, along with essential information about each location.
Determine the Cost of Living
Next, in order to create an accurate budget, you need to figure out the cost of living in your chosen destination. Of course, this varies greatly from place to place. But luckily, there are several incredible resources where you can find this information before you even set foot in your new city.
Nomad List
Nomad List was created by a digital nomad for digital nomads. The site ranks popular digital nomad destinations around the world and provides cost of living information for each location. Users can also leave reviews to let other digital nomads know what they liked or didn’t like about a particular place.
Numbeo
Numbeo is the world’s largest database of crowdsourced information about cities and countries. The site provides the average cost of everything from an expensive dinner to a cappuccino to a pint of local beer. Plus, Numbeo allows you to compare the cost of living in 2 locations side by side.
The Earth Awaits
The Earth Awaits is an interesting tool because instead of starting with a desired location, you tell the site what you’re looking for. Simply enter any information about your desired lifestyle, such as your budget, if you have children, accommodation and language preference, and it will provide cities that fit your criteria.
Digital Nomad Blogs and Vlogs
Wherever you plan to head on your digital nomad journey, chances are that someone has not only beat you to it but has already written about it too. Take advantage of this by simply googling “digital nomad cost of living in [city]” so you can get a personal account of what to expect.
Determine Your Monthly Fixed Expenses
As a digital nomad, your travel budget worksheet needs to reflect all of your monthly expenses, not just the big things like rent or travel costs. For an accurate budget worksheet, you need to consider your monthly fixed expenses.
Your fixed monthly expenses are the expenses that stay the same every month and are not tied to your rent or travels. Examples of fixed monthly expenses include things like:
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- Student loan payments
- Credit card payments (if paying a set amount)
- Storage unit back home
- Subscriptions like Netflix or Spotify
- Health insurance
- Cell phone payments
In addition to the examples above, as a digital nomad, you’ll probably have a few business expenses as well. So be sure to consider other things that you might pay for monthly, like membership fees, an Adobe subscription, or even the VPN you use.
Estimate Your Travel and Entertainment Costs
In order to both keep costs down and to stay productive, digital nomads should really embrace slow travel – staying in a place for weeks or months at a time. Still, the truth is that travel is essential for digital nomads, so be sure to include it in your travel budget worksheet. This includes any weekend trips, sightseeing, or visa runs between countries.
As you get to know your new city, it will become easier to budget for entertainment. To start budgeting for entertainment, envision your lifestyle and use Numbeo or Nomad List to estimate the costs. Then you can update once you find the true cost of entertainment for your city and your lifestyle.
When budgeting for entertainment, don’t just think of things like having beers with friends or hitting the club on the weekends. Think of other leisure activities that you might enjoy in your normal life, such as going to the movies or taking a cooking class.
Have a Safety Net
The goal of this travel budget worksheet is not to break even. It’s to make sure that you can comfortably live your life as a digital nomad. And part of that comfort comes from being prepared.
It’s not fun to think about when picturing your life as a carefree nomad, but things happen. You might get sick, you may go without work for a while, or you could be forced to leave a country on short notice. Whatever the case, this lifestyle comes without some of the structure of traditional life back home, so it’s important to be prepared for anything. Build a safety net into your digital nomad budget and don’t touch it until you need it – no matter how amazing that cheap flight deal is.
Consider Travel Insurance
In support of the point above, digital nomads (and all travelers) should seriously consider travel insurance. Even if you have a traditional health insurance plan in your home country, you may not be covered while abroad. Insurance companies like World Nomads offer plans specifically for travelers. Simply enter a few pieces of information, including your trip length and destinations, and they’ll provide a quote right on the spot.
Stick With It
To take full advantage of this travel budget worksheet, you’ve got to stick with it and continue to update it. Continuously track your spending. Try to notice where most of your money goes and see if you could be saving even more money every month. If you do this, you’ll be financially prepared to handle any changes that your digital nomad lifestyle throws your way.
