How to Save for Retirement As a Digital Nomad
Track your expenses carefully., Pay down your debts before traveling., Find ways to cut costs., Account for currency exchanges., Maintain sufficient insurance.
Step-by-Step Guide
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Step 1: Track your expenses carefully.
When you're traveling to exotic locales, it can be tempting to spend extravagantly so you get the most out of the experience.
However, if you intend to also save for retirement, you must have a good idea of how much you need to spend to survive.Start by writing down your regular expenses – those that won't change regardless of your location.
For example, if you have a mobile phone bill that is always $100 a month, budget that expense and any other similar expenses first.
Once you have the expenses that don't change down, take a look at what you've spent on food, lodging, and transportation in the past two or three months.
If you haven't left home yet, you'll need to come up with a reasonable estimate for these expenses.
Consult other digital nomads to get a good idea of how much these things will cost you in the places you want to go.
Average everything out to come up with a good daily spending figure that you can use for budgeting purposes. -
Step 2: Pay down your debts before traveling.
It's not the best idea to start a digital nomad lifestyle when you still have significant debts, such as a student loan, that require monthly payments.
Ideally, you should have as few debts as possible before you set out.If it's not going to be possible for you to eliminate your debts, at least try to pay off your consumer credit, such as credit cards, before you go.
Leave one credit card open to use on the road, and plan on paying it off every month. , It can be tempting to live more extravagantly when you're on the road, especially if you've just come off of a grueling journey.
You'll get more bang for your buck if you stay in hostels and cheaper accommodations rather than hotels.Use your accommodations solely as a place to sleep, and look for free public Wi-Fi where you can do your work.
If you need a more secure internet connection for your work, get an unlimited data plan and tether your mobile phone.
Rather than eating at restaurants, look for open markets and street food vendors, where you can eat more cheaply.
You also might consider buying groceries and cooking your meals if you are staying in a place with a communal kitchen. , If you're getting paid in local currency, make sure you know how that amount will be converted to the home currency you're using for your savings and other financial accounts.Digital nomads often are drawn to locations, such as Southeast Asia and Latin America, that have a relatively low cost of living.
However, this low cost of living also frequently translates into lower pay.
Keep in mind that just because you can live comfortably off of the local pay in one of these areas, that may not necessarily translate into significant savings if the local currency has significantly less value than your home currency. , Particularly if you're young when you start the digital nomad lifestyle, you may not think insurance is necessary.
However, difficulties and accidents can happen.
Insurance makes these issues less of a catastrophe when they occur.Look into health insurance, life insurance, and liability insurance, as well as insurance for your personal property.
You also may need non-owner automobile insurance, depending on where you're planning to travel and whether you anticipate leasing a car at any point.
Keep in mind that in less developed countries, medical treatment may not be available at the same level of quality that you've come to expect, especially if you are from North America or Europe. -
Step 3: Find ways to cut costs.
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Step 4: Account for currency exchanges.
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Step 5: Maintain sufficient insurance.
Detailed Guide
When you're traveling to exotic locales, it can be tempting to spend extravagantly so you get the most out of the experience.
However, if you intend to also save for retirement, you must have a good idea of how much you need to spend to survive.Start by writing down your regular expenses – those that won't change regardless of your location.
For example, if you have a mobile phone bill that is always $100 a month, budget that expense and any other similar expenses first.
Once you have the expenses that don't change down, take a look at what you've spent on food, lodging, and transportation in the past two or three months.
If you haven't left home yet, you'll need to come up with a reasonable estimate for these expenses.
Consult other digital nomads to get a good idea of how much these things will cost you in the places you want to go.
Average everything out to come up with a good daily spending figure that you can use for budgeting purposes.
It's not the best idea to start a digital nomad lifestyle when you still have significant debts, such as a student loan, that require monthly payments.
Ideally, you should have as few debts as possible before you set out.If it's not going to be possible for you to eliminate your debts, at least try to pay off your consumer credit, such as credit cards, before you go.
Leave one credit card open to use on the road, and plan on paying it off every month. , It can be tempting to live more extravagantly when you're on the road, especially if you've just come off of a grueling journey.
You'll get more bang for your buck if you stay in hostels and cheaper accommodations rather than hotels.Use your accommodations solely as a place to sleep, and look for free public Wi-Fi where you can do your work.
If you need a more secure internet connection for your work, get an unlimited data plan and tether your mobile phone.
Rather than eating at restaurants, look for open markets and street food vendors, where you can eat more cheaply.
You also might consider buying groceries and cooking your meals if you are staying in a place with a communal kitchen. , If you're getting paid in local currency, make sure you know how that amount will be converted to the home currency you're using for your savings and other financial accounts.Digital nomads often are drawn to locations, such as Southeast Asia and Latin America, that have a relatively low cost of living.
However, this low cost of living also frequently translates into lower pay.
Keep in mind that just because you can live comfortably off of the local pay in one of these areas, that may not necessarily translate into significant savings if the local currency has significantly less value than your home currency. , Particularly if you're young when you start the digital nomad lifestyle, you may not think insurance is necessary.
However, difficulties and accidents can happen.
Insurance makes these issues less of a catastrophe when they occur.Look into health insurance, life insurance, and liability insurance, as well as insurance for your personal property.
You also may need non-owner automobile insurance, depending on where you're planning to travel and whether you anticipate leasing a car at any point.
Keep in mind that in less developed countries, medical treatment may not be available at the same level of quality that you've come to expect, especially if you are from North America or Europe.
About the Author
Marilyn Murphy
Experienced content creator specializing in organization guides and tutorials.
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