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Money Management Guide for Digital Nomads

Money Management Tricks For Digital Nomads: From Financial Plan To Taxation

Being a digital nomad allows you to live anywhere you want and experience different cultures firsthand. The downside of this lifestyle is that you are more likely to face financial insecurity, which requires cautious money management. Effective budgeting is not just necessary for financial stability. With proper preparation and financial planning, you will find it simpler to negotiate international tax systems and settle in new countries. Is this something that you are aimed at? Great — we can guide you a bit! Read our guide about money management for digital nomads covering everything you need to know — from spending monitoring and tax compliance to banking and currency conversion.

Arrange Currency Exchanges and Banking For Online Payments

Using your bank card outside your own country may result in extra expenses. You will be hardly happy to overpay a dime without a reason. Luckily, there is a solution. Here are some methods for avoiding or reducing these charges:

  • Select a worldwide bank — It is important to find the best bank for digital nomads. Some banks provide accounts with no international transaction costs and ATMs in many countries. 
  • Use a virtual card — Virtual cards provide cheaper transfer costs than conventional banks. what is more, you can easily issue a card in the local currency. You can even get multiple virtual credit cards or get a virtual crypto card if needed.
  • Limit cash withdrawals — Reduce payments by conducting major supermarket purchases with your debit card instead of multiple small ones.
  • Offset with travel points — Check whether your credit card provider offers incentives for using certain airlines, accommodations, and rentals. This is a good opportunity for you to save on your costs.

In the long run, all these small points allow you to save a bomb on low-fee payment processing. So you should always consider them.

Create a Budget

Analyzing your income and estimated living costs can help you develop a realistic budget. The initial step is to estimate how much you’ll make from different sources such as customers, companies, and passive ventures. Make a careful estimate of your overall income for each month.

Next, determine the minimum amount you need to spend on the following:

  • Relocation (including your digital nomad visa and travel fees);
  • Housing & utilities;
  • Costs of remote work (such as WiFi and coworking space rentals);
  • Groceries and toiletries;
  • Health and travel insurance;
  • Childcare and education;
  • Savings and investments;
  • Fun money for goods, vacation, and recreation;
  • Debt payback (such as college debts).

Compare your revenue to this budget. This way, you will determine how much freedom you have and change the numbers. For example, since you are location-independent, you may opt to live in places away from a public transportation route, where rents are cheaper. It is up to you to choose. You can fully control your expenses. 

Track Your Spending

While you may make accurate estimates of your budget, your financial status will most likely vary. For example, even if your income is stable and fixed, governments may sometimes change their tax and visa policies for expats and digital nomads. Therefore, it is critical to keep track of your spending and make adjustments to your budget as needed. Use budgeting software to track your inflows and outflows in the same currency. This will allow you to keep an ear to the ground.

Set Aside Money for Taxes, Insurance, and Emergencies

Digital nomads should budget for taxes, insurance, and emergencies. This is not something that you can set aside and forget. Here are some suggestions for doing so:

  • Estimate and save for taxes — Determine your tax burden and put aside money each month to guarantee you can pay your taxes when they are due.
  • Invest in insurance — To protect yourself and your company, consider purchasing insurance such as health, liability, or travel coverage.
  • Start an emergency fund — Create an emergency fund to cover at least three to six months of living costs in the event of an unforeseen disaster.

This way, you can avoid unexpected expenses, and you will be always ready to pay for the necessary things.

Manage Taxation and Compliance

Expats may find it difficult to navigate tax laws. To prevent compliance concerns, you should be familiar with the legislation of both your home and resident nations. Start with checking where you should pay taxes. Often, if you stay in a country for a certain period of time, you immediately become a tax resident. For example, EU nations have a restriction of 90 non-consecutive days each calendar year. Also, see whether there is a treaty between your home and resident nations. If not, you may be liable to double taxation, which requires you to pay in two or more jurisdictions.

After you’ve analyzed your tax liabilities, look into whether you’re qualified for any deductions or breaks. Many governments want to encourage visitors to their nation; thus, they give incentives to digital nomads. For example, Greece provides a 50% deduction on professional income for the first two years. Finally, define how and when you must pay taxes to prevent late fees. Tax returns may be required at any time since countries’ fiscal years fluctuate.

Top Effective Budgeting Methods for Remote Digital Nomads

Budgeting allows you to plan and manage your money while also working strategically to achieve your financial objectives. There are several ways to manage money as you are freelancing on different projects. There is no win-win solution that will work for all. That’s why it is important to choose an option that you stay most comfortable with. It is up to you to choose the best strategy for your scenario and organize it properly. Let’s delve into:

  • Zero-based budgeting assigns every penny you make to a single item, allowing you to monitor expenses and become more aware of your spending patterns. You should try to conclude each month with all income and costs totaling zero. In this case, any excess would be set aside for savings or investments.
  • Envelope budgeting allows you to assign your spending to several areas with a set limit, such as entertainment. Reaching your spending limit in this category is like running out of cash in an envelope labeled “Fun!” Because no one can compel you to stop spending, this strategy requires some self-control.
  • Proportion-based budgeting involves carefully allocating a proportion of your monthly income to several categories of costs, such as rent, food, or business supplies. The most typical technique is to follow the 50-30-20 rule. It states that you should spend 50% on living costs, 30% on wants, and 20% on savings.

All of these strategies have a similar basis: proportions! Having a clear image of where your money is going and allowing yourself some pleasure each month is essential for sticking to a well-set budget.


Many digital nomads work on an as-needed basis and may not have a constant monthly income. There is a dependency on how do nomads make money. It depends on how many customers you have, the projects you take on, and how much time you put aside for personal stuff like traveling, family, or finally brewing that beer in your bathroom. Unfortunately, your costs have a propensity to keep quite steady. That is why it is critical to monitor your cash flow and budget estimates. A digital nomad without a budget is doomed. We do hope that the above tricks will come to the rescue.

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