4 Simple Personal Financing Tips Every Digital Nomad Should Know

To sustain a lifestyle that requires a lot of travelling and no fixed base, digital nomads must practice good financial management. You’ll find that facing your financial responsibilities today prevents costly and time-consuming consequences in the future.

So if you’re ready to achieve a healthy financial status, read these tips to get started.

Digital Nomad’s Guide to Proper Financial Management

A secure savings fund is the ultimate goal. But you can’t secure your finances if you keep piling unnecessary debts. Pay any outstanding debt before travelling, then set aside the remaining cash for your savings.

Although it may take time to clear long-term loans like student loans or mortgages — you can find ways to pay them up faster.

Here are a few suggestions:

  • Pay more than the minimum payment. It’s tempting to pay the minimum amount of your loan or credit card bill. But this practice only adds interest and other financial charges.
  • Run a side hustle. Does anyone need a better reason to make extra money? If you maintain a full-time job as a writer, you can run a side hustle by dropshipping items or offering short-term services (resume writing, social media captions, etc.). You can find a list of short-term gigs on websites like Fiverr.
  • Avoid unnecessary purchases. Do an inventory check on your items. Do you really need a new phone when your old one is working perfectly? While it’s good to reward ourselves, it is also important to maintain control and resist the need to jump in the latest bargains or trends.
  • Travel to affordable places first. Southeast Asia is one of the top nomad destinations for several reasons. It’s culturally diverse, packed with beautiful sights, and most importantly, boasts a low cost of living! Choose a destination that suits your budget while meeting your travel goals at the same time.

Digital nomads need an emergency fund more than anyone. This should be taken care of even before you hit the road. The ideal size of your emergency fund covers three to six months of your basic expenses. It is also advisable to place this in your most accessible account so you can withdraw it immediately.

If you have been working for some time, consider setting up a retirement fund. Digital nomads are considered self-employed, so you can make use of retirement savings options for the self-employed.

For professional advice, consult your bank or financial consultant to find the best retirement plan for you.

Dr. Phillippa Lally, a health psychology researcher at University College London, conducted a social experiment to measure how long it takes for an average person to form a habit.

Unlike what most life coaches claim—that it only takes 21 days for a person to form a new habit—Lally’s research revealed that it takes two to eight months for the habit to be instinctive. This depends on the person’s conviction, the habit’s level of difficulty, and the circumstance or conditions the person is in.

The takeaway? If you’re used to an extravagant lifestyle, learning to be thrifty can be a challenge.

Of course, discipline and the right mindset can sharpen your budgeting skills. To get started, practice these popular methods:

The 50-30-20 Formula

This is also known as the balanced money formula. You break down your income into the following:

  • 50% for your fixed expenses (insurance, accommodation, food, travel tickets)
  • 30% for your personal expenses (souvenir items, entertainment, travel and sightseeing activities)
  • 20% for your savings and emergency funds.

The Envelope Method

This is an old-school finance management, where you prepare separate envelopes for expenses/bills, loans, and savings.

Us the envelope system for items that take a huge chunk off your budget. Think of basic needs like international insurance, accommodation, health needs (medicines, vaccinations, insurance), and clothing.

The Pay-Yourself-First System

Contrary to its name, the pay-yourself-first system doesn’t show you how to earn money. Instead, the money you set aside goes directly to your own savings and investment accounts.

For example, you earn an estimated income of *$5000 USD from your web design job. After writing down your monthly pay, list your savings goals (retirement account, health/ travel insurance, etc.). If it amounts in a total of $3500, then you have a total of $1500 left for your personal expenses.

*remote and freelance work on the web generally pays in US dollars

An important part of budgeting is keeping track of expenses. You can do it by keeping a ledger or with spreadsheets like Google Sheets or Microsoft Excel. But can you really call yourself a digital nomad if you don’t look for more innovative options?

Make use of your smartphone!

It’s easy to lose track of expenses while travelling. So make use of mobile apps that will automate the process. Here are popular options:

  • Trail Wallet. Trail Wallet is the most popular travel budgeting app out there. You’re able to choose specific categories, then assign your expenses in either local or home currencies.
  • Mint. Mint lets you manage your income, expenses, and savings in one place. This full-blown money management tool also lets you sync your bank accounts to track electronic transactions.
  • Wally. Want to know more about your spending habits? Wally can help you do that. Get useful information on where your money is going through colourful infographics and other visual reports.


The digital nomad lifestyle brings a huge amount of freedom. But this freedom requires discipline and a foolproof plan to avoid financial shortcomings. Calculating monthly costs isn’t enough. You need to estimate how much you have to spend before actually setting foot out the door.


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