“I want to become a digital nomad but I have no idea where to start!”
I can’t even remember how often I have heard that sentence before. Traveling the world while making money online is the ultimate life goal for many. However, you shouldn’t just book a ticket and leave. You should prepare your digital nomad life thoroughly.
Because the last thing you want is to realize that you have no idea what you are doing and have absolutely no money left after a few weeks into your new lifestyle.
That’s why the following post will list the most important steps you have to take before you become a digital nomad.
Table of Contents
1. Prepare Your Digital Nomad Life Financially
Your first and maybe most important step is: Sort out your finances.
The digital nomad lifestyle is not for free. You will have many expenses and you have to find a way to cover them. Just like in a “normal” life ;) How to prepare financially?
1. Calculate Your Expenses
First of all, it’s a good idea to calculate roughly, how much money you are going to need. Take into consideration one-time investments like:
- Your first flight ticket,
- Vaccinations, or
- Equipment, e.g. laptop or backpack
Also think about regular costs, such as:
- Transportation, or
- Coworking spaces, if you prefer working there.
You should also always have a little bit of emergency money. For example, when your laptop breaks and you need a new one. Or if there is a family emergency and you have to fly back home on short notice.
As soon as you know how much money you will need to survive for let’s say the first 4-6 months on the road, you know how much you have to save.
2. Reduce Current Spending
Now you should check what you spend every week or every month and try to save whatever you can.
Start with regular expenses, such as rent or electricity. Could you maybe move to a smaller apartment or rent out an empty room? What about things like Netflix or your gym membership: Do you really need that or could you live without it?
Next, try to reduce your impulsive expenses. Coffee to go every morning at the coffee shop adds up quickly. The cute dress on sale might be cheap, but do you really need it?
I know this is very hard for some of you but try your best to live as frugally as possible. Because the sooner you have enough savings, the sooner you can start your digital nomad life.
If you want to find out more about how much money you should put aside exactly, read this post with all the potential expenses of a digital nomad and lots of example costs.
3. Sell What You Don’t Need
As a digital nomad, you will most likely live out of one big backpack or suitcase. That’s it. You can’t drag all your jewelry, shoes, or electronics with you. Of course, you can store some of it with your family or friends or get a storage room somewhere. But will you really need it when/if you come back?
Sometimes it’s easier to let go of all your material possessions. Turning them into money is a double win.
Extra Tip: I know it sounds tough but do yourself a favor and get rid of your debt before you start your digital nomad life. Or at least try to minimize them to a manageable amount. This lifestyle is so exciting and things change all the time, the last thing you want to worry about is debts.
2. Find a Location-Independent Job
Many aspiring digital nomads quit their jobs, buy a plane ticket and try to figure everything out as they go.
Well, that can definitely work. I did it this way and managed to find clients as a freelancer fairly quickly.
However, I don’t recommend it. Especially, if you don’t have a lot of savings. You will be super stressed and worried about finding a way to generate income. You won’t be able to enjoy the traveling part because you know that you will run out of money soon.
So do yourself a favor and sort out your income BEFORE you leave and when you still have your current job. That gives you plenty of time to figure out what works for you and what doesn’t. You don’t have to accept deals or contracts out of desperation which you normally wouldn’t.
When you want to find a location-independent way to generate income, you have the following options:
- Keep your current job and ask our boss to do it remotely.
- Look for other employers that are willing to hire you on a remote basis. Check out this post to learn how to find these remote contracts.
- Start as a freelancer and offer your skills. Check out these active and legit freelancer platforms or learn how to find clients on other channels.
- Start your own business. You could, for instance, start a dropshipping business and sell products. Learn how to build an online shop in less than 30 minutes.
If you want to change your career but are still a bit lost about what kind of job you could do, check out this post that lists more than 40 popular digital nomad jobs.
3. Quit your Commitments
Ok, so you have enough savings and you have found a way to make money online. Now it’s time for the next step of preparing for your digital nomad life: Quitting your commitments.
Think of smaller commitments like newspapers, gym membership, insurance, or internet plans.
Of course, don’t forget the two biggest commitments: Your job and your apartment.
Unless you really hate your job, give notice in a polite and nice way. You never know. In case the digital nomad lifestyle won’t work for you for any reason and you have to come back, it would help a lot if the door to your old job is not shut entirely.
Another idea regarding your apartment or house: If you are renting and considering coming back in the near future, you might want to keep that place. Ask your landlord if you could sublet it.
In this case, you have to find someone very reliable since you will be far away and have to trust that person. But if you can, this could be a nice option.
Extra Tip: Start quitting your commitments well ahead of time as you will probably have to stick to certain periods of notice.
4. Pick a Place Where You Start
I bet you already have a long list of places you want to go to! The only question is:
Where to go first?
There are a couple of factors you should take into consideration:
- Climate / Season. Make sure you check things like the rainy season, monsoon time, heat waves, etc. before you book your flight. Personal preference is also an important factor. Are you more of a summer or winter type of person?
- Local happenings. There are certain local events that you want to avoid and others that you definitely see. Whereas you might want to be in India during the Holi festival, you probably want to avoid Chiang Mai during the burning season when farmers burn their fields and cover the city in smoke.
- Internet. Although you can get decent internet in almost every place today, you will be surprised how bad or expensive reliable internet can be in some regions. To get an idea about the internet quality, have a look at websites like Nomad List or ask around in local Facebook groups.
If you want to make sure you always have unlimited WIFI wherever you go, check out this amazing global hotspot.
- Visa. Depending on your passport, it can be either easy or hard to get a long-term visa. Sometimes you won’t need a visa at all but will be able to stay for a few weeks without one. Check your options in advance with the respective consulate.
- Costs of Living. If you are just starting out as a digital nomad and don’t have much savings or a well-paid job yet, you might want to go to places that are a bit more budget-friendly, like Southeast Asia or Eastern Europe.
- Digital Nomad Community. Some people couldn’t care less about this factor. Others, especially newbies, prefer staying in places where they can find a community of like-minded nomads. A good way to find out is by checking the coworking space situation or local Facebook or Meetup groups.
There are a few more factors that can determine the perfect place for digital nomads. Check out the linked article to find out more about them.
Extra Tip: If you don’t want to start your digital nomad life alone for whatever reason, you could also join one of the many programs out there for nomads. They usually take a group of location-independent professionals to different places around the world.
You knew this one would come: boring bureaucracy stuff. But you have to sort that out, too, before you start your digital nomad life. So let’s have a look into taxation:
One of the biggest mistakes many nomads make is assuming that you don’t have to pay taxes anymore in your home country once you have left. That is WRONG!
You always have to check the taxation rules for your home country as they vary greatly. In some countries, you have to officially unregister and cut all ties (housing, job, etc.) to that country to not be liable for taxation anymore. Other countries will need proof that you are paying taxes in another country from now on.
And if you come from the USA you will have the hardest time avoiding paying taxes in the States because US citizens usually have to pay taxes no matter where in the world they are.
In addition to the tax situation in your home country, you should also check the tax law in the country you are traveling to. Many countries have the 183-day rule: Only if you stay longer than 183 days, you will become a resident for tax purposes and have to pay taxes.
Others will make you pay straight away. And again others don’t care about foreign income no matter how long you stay.
Make sure you do your research to avoid getting into trouble for committing tax evasion.
If you want to learn how you can minimize or even avoid income taxes as a digital nomad the legal way, check out the linked post.
6. International Health Insurance
I know that many nomads live on a budget and try to save money wherever they can. But skipping on health insurance is definitely not the best idea.
In case you have an accident overseas or need any other type of medical help, this can quickly become a financial nightmare. So, in my opinion, international health insurance is an absolute must-have.
One of the most popular companies and definitely one of the best travel insurance providers out there is SafetyWing. They offer 24/7 emergency assistance, cover medical expenses, medical transportation, and trip cancellation, and have very affordable prices.
If you want to learn more about them, check out this extensive SafetyWing review.
If you need more information on this topic in general and want to check out more providers, have a look at this post on the Best Digital Nomad Insurance.
7. Organize Your Stuff
Finally, the last step of preparing for your digital nomad life. Now it’s time to organize your stuff.
For one, that means getting rid of everything you can’t take with you. Maybe you have already sold all your furniture and stuff that you don’t need. If not, now is the time.
You might also have to buy some new things that you will need, for instance, a proper digital nomad backpack or a laptop. There are plenty of other things that come in handy for digital nomads, both work-related and travel-related. Only to mention a few things:
- Laptop stand
- Day bag
- Packing cubes
- Mobile hotspot
- Cable organizer
- Productivity planner
- Action Camera
- Travel towel
If you want to make sure you don’t forget to pack anything, check out this extensive packing checklist for digital nomads. You can also have a look at this post which talks about fantastic online and offline tools for digital nomads.
Fully Prepared for Your Location-Independence?
I know it sounds like a lot of work but if you start early enough, you will surely get through it easily. And it will be worth it. If you prepare your digital nomad life thoroughly instead of just rushing into it, you minimize the risk of failing.
Of course, you can simply quit your job, book a flight, leave, and try to figure everything out along the way. But this can be harder and may result in more stress.
Make sure you are able to enjoy the location-independent lifestyle as much as you can without having to worry about things that you could’ve organized before.