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4 Financial Steps To Start A Digital Nomad Lifestyle

by | Last updated Jul 24, 2021

If you want to make the move from your 9 to 5 office job to a location-independent work that allows you to travel the world, finances are no doubt a big issue. In case you have a lot of savings you might not have to worry too much about this part. Starting a digital nomad lifestyle will be more relaxed for you.

However, the majority of my readers are not in that position. Maybe you wonder how much money you will need and are scared that you will never have enough to start this kind of lifestyle. The following article will teach you step-by-step how to prepare your finances when you want to become a digital nomad.

Digital Nomad Lifestyle Finance Steps, Prepare location-independent life, Remote job, Online Work

Step 1: Calculate The Money You Will Need

In order to find out how much money you need to save, you need to calculate how much money you will spend. Makes sense, right?

But where to start?

In one of my last articles I talked in detail about how much money you will have to put aside when you want to a digital nomad. So at this point I will only give you a summary of the single points you need to take into consideration.

Write down every single one of the following positions and add what each will cost you.


Expenses Before You Leave

Even before you leave your home country, you will have to spend money on certain things. I strongly advise you to make a plan that covers you for the first 6 months of being a digital nomad. In the beginning you might struggle to generate income, so you have to rely on your savings. That’s why you should make sure you have enough money to keep you alive for a few months.


1. Flight Ticket

Let’s start with the cost factor that is very easy to calculate: your flight ticket. Simply look up flights on websites, such as Skyscanner, to find the best deals to your preferred destination.

You can literally start anywhere in the world. If you want to meet many like-minded people and connect with other remote workers, you might want to go for one of the popular cities for digital nomads, e.g. Chiang Mai or Medellin.


2. Health Insurance

You will also need an insurance plan, that covers you abroad. It depends on your situation whether you should go for a travel insurance like World Nomads or an international health provider, like Bupa. Get a quote to see how much this will cost you each month. My current plan costs me about 90 USD a month. But again, it all depends on your situation.


3. Vaccinations

Check the countries that you want to go to in the next couple of months. Do they require any vaccinations that you don’t have yet? I know it sounds like a small expense, but vaccinations can easily cost you a couple of hundred dollars. So check these costs and add them to your list.


4. Visa

Many countries allow you to stay up to 30 days (sometimes even 90 days) without a visa or a free tourist visa. Other countries will charge you 60 USD for a two-week visa. That also depends on your nationality. Make sure to calculate those costs in as well, at least get a rough number.


5. Equipment

Do you have everything you need to work online? A laptop in decent quality, smartphone, headphones, maybe a mobile internet device? These are essential for your daily work. While you might not need to have the iPhone 8 or newest MacBook, you should bring reliable electronics.

Check this packing list for digital nomads to find out what else you will need.


Monthly Costs

Now let’s look at how much you will spend as a digital nomad.

1. Accommodation

If you want to go to the usual popular digital nomad hubs, like Bali or Bangkok, you will very likely get along with less money than you did at home. You can often rent apartments for less than 300 USD a month. Check out Nomadlist to get a rough idea what to expect.


2. Food

In many places in Southeast Asia you can get a decent meal for 2-3 USD. Consider preparing your own food, too.


3. Coworking

In case you don’t want to work from your apartment or a café or any other public place with good wifi, you could also buy a membership in a coworking space.


4. Transportation & Entertainment

Depending on where and how you want to live, you will also need money for things like going to the movies, day tours, entrance fees , or transportation. Calculate some extra money for this, too.


5. Small Expenses

You will need to buy toiletries or do your laundry every once in a while. Although, this might only be a few dollars, it can easily add up. Have a small budget for this position.


Emergency Money

Make sure to put enough money aside to cover emergency expenses. For instance, when your laptop breaks or gets stolen and you need a new one or when a family member gets sick and you have to fly back home on a short notice. Be prepared.


Now you should have a list with:

  • The expenses you have before you leave your home country,
  • Your monthly expenses and
  • Emergency money.

Add these numbers together and you have the amount of money you need before you can start a digital nomad lifestyle. Keep in mind that you should be able to cover a few month without any steady income.

Digital Nomad Lifestyle Finance Steps, Prepare location-independent life, Remote job, Online Work

Step 2: Check & Reduce Your Current Spending

In this step you need to identify how much money you spend each week to see where you can save money. I strongly suggest you to make a list with everything you pay money for. This list should contain two parts:


1. Recurring Expenses

Think of all the periodic costs you have. This can be rent, electricity and water bills or insurances, such as health or car insurance.

Also add smaller recurring costs, such as mobile and internet plans, Netflix, newspapers or magazines, Spotify, gym membership, or any other types of subscriptions.


2. Impulsive Expenses

On this list you write everything that you spend during the day. The coffee to go in the morning before you go to work, gas for your car, lunch, cigarettes, public transport, groceries, or toiletries.

Also think of money that you only spend every once in a while, like entrance fees to parks, movie theatres, drinks and dinner with friends, or shopping trips.


The easiest thing would be to note the daily small expenses on your phone. Apps like Evernote help you to organize everything. You could also use Google sheets and simply add your expenses on your phone wherever you are.

I know it sounds very nit-picky, but try to write down every single dollar you spend. You will be surprised how much you spend on small stuff without even realizing.


Eliminate Unnecessary Expenses

Track your current expenses for about 2-4 weeks. That should give you a good idea where your money goes. Now it’s time to reduce unnecessary expenses.

Start with the recurring ones. Is there any chance you can reduce your rent? Maybe get a flatmate, move to a smaller apartment or move in with your parents or friends for a few months. Can you cancel your mobile plan and use a prepaid one instead?

If you have a car, do you really need it or would public transport work just as good? If not, maybe you can start carpooling and share your gas costs with others. Check websites like BlaBlaCar or Carpoolworld to offer your empty seats.

How about your gym membership? You could start working out in the park or at home with your own body weight. There are many free programs or YouTube videos out there that help you getting started.

Do you smoke and drink a lot? Try to reduce it. It will save you a lot of money (and your health will profit from it, too).

Also see if you can cut down on entertainment expenses. Netflix, movies, magazines and music streaming is fun, but you can surely live without it.

The same goes for your Starbucks coffee every morning before work. It might only be a few dollars. But spending only 3 USD for five days a week on it, will be 720 USD a year! That could easily be your flight ticket.


Extra Tip: Transfer your savings to an extra bank account and don’t leave it on your normal checking account. This way it’s easier to resist  the temptation to use it for things you don’t need and you can receive interest rates.

Digital Nomad Lifestyle Finance Steps, Prepare location-independent life, Remote job, Online Work


Step 3: Sell What You Don’t Need

I know you have spent a lot of money on your belongings and you don’t want to give them away. But the thing is, you can’t carry everything with you anyway. Most digital nomads carry a backpack or a suitcase with them. That’s it. They may have a few boxes with stuff at their parent’s or friend’s place.

However, you wouldn’t want to store your massive bed or lounge room furniture with them. Or how about your car or bike? It’s probably easier to rent or buy a new one in case you come back one day.

Think of small things, too. We all have clothing that we never wear or electronics we never use. Tableware, home decoration, books, music instruments – have a look in the back of your closets or your attic and identify what you don’t need anymore.

Give it away for free or try to sell it on eBay or local flea markets. This will also add to your savings and helps you start your digital nomad lifestyle earlier.


How long until you can start your digital nomad lifestyle?

As soon as you know how much money you can save each month and how much you can make from selling things, you can calculate how long it will take you to have the money you defined in Step 1.

Example: You should have 6,000 USD savings before you start the digital nomad lifestyle. You can save up to 300 USD a month and make an extra of 2,000 by selling furniture and things like that. So it will take you about 13 months to reach your goal.


Step 4: Start Your Digital Nomad Lifestyle While You Are Still In Your Old Life

This would be the best case: After you have decided how you want to generate income as a digital nomad, you slowly start your transition. You don’t quit your job and leave on the next plane. But you keep on working in your old job, while starting your new one.

I know it is a lot of work. However, it is the safest option.

If you plan to work as a freelancer, it is a great idea to start building a portfolio and acquire your first clients before you leave. It usually takes a couple of months to get your freelancing career running, in which case you won’t make much money.

If you want to get a permanent position with a company that employs you on a remote basis, start looking for potential employers early. The application process can often take a few weeks or even months.

In case you want to start your own business, you should also begin as soon as possible. Define your business plan, set a strategy, if necessary find freelancers and everything you need to get your business running.

Of course, you could also quit your job and start everything once you have arrived in your new country. But beware that you might need to have more savings because it can take longer to generate an income. You will also feel a bigger pressure to make the digital nomad lifestyle work because you have already left your old life



Prepare The Worst Case

Maybe I’m being overly careful here. But it’s not a bad idea to prepare yourself financially in case you fail with the digital nomad lifestyle.

Of course, you did your homework, you know what you are getting yourself into and you are convinced this is the right lifestyle for you. However, there are still many reasons why people struggle with this life and sometimes give up and return to their old life.

This is absolutely nothing to be ashamed of. It’s important to know when to stop because something doesn’t make you happy or you can’t sustain your desired standard of living with it.

If you come to the conclusion that the digital nomad lifestyle is not for you, you should have some extra savings to transfer back. These savings should include at least:

  • A flight ticket back home and
  • Money for rent and food for a month or two.

Put that money on a separate bank account and don’t touch it until you really have to.

Alternatively, you could move in with friends or family, if that’s an option, until you have a steady income again. When you quit your job, do it in a friendly manner. Maybe your old boss is willing to take you back if you have to return, so you won’t have to look for a new job.

Don’t get me wrong, staying positive and truly believing that you can make it is a key requirement of being successful with anything in life. But it doesn’t hurt to have a little backup plan and it takes away some pressure.


Start a Digital Nomad Life the Right Way

As you can see, preparing a digital nomad lifestyle financially is no rocket science.

You first have to estimate how much money you will need the first couple of months. Think of the costs you will have before you leave, such as flight tickets , your monthly costs abroad, such as rent, and put some extra money aside for emergencies, for example if your laptop breaks and you have to buy a new one.

Then you need to list everything you spend in your current life, e.g. rent, food, entertainment. Identify all the unnecessary expenses and see where you can reduce your spending.

Another step is to have a look around your house and see what items you don’t need anymore, can’t bring with you or can’t store anywhere while you are away. You should either give them away or sell them on eBay or local flea markets to make some extra money.

The last and maybe most important step is to start with your new career path before you leave. Set up a professional portfolio, try to acquire clients, or start with your own business early enough.

Also make sure to have a backup plan in case you realize, against all odds, that this is not the right life for you.


If you plan your transition correctly and approach your new lifestyle in a professional manner, there is no reason why you couldn’t make it from a financial viewpoint. It might take you longer, but you most certainly don’t have to be rich to make it.


What is your experience with the digital nomad lifestyle? Did you struggle financially in the beginning? Or are you scared you will?

Denise Mai

Denise Mai

Founder of Digital Nomad Soul

Hi, I’m Denise – a travel addict and remote work enthusiast. I have been traveling the world since 2008 and explored, worked, and lived in more than 80 countries. To me, there is nothing better than the freedom and flexibility that comes with a location-independent lifestyle.

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