How much money do you need to live as a digital nomad?
How much money do you need to live as a digital nomad?
With the world opening up, there’s been a renewed interest in travelling and working in different countries as a digital nomad.
Being a digital nomad is usually done as an individual or with a partner or friend, but even entire families can get in on the action.
I’ve been a full-time digital nomad since 2019 and have lived and worked in six different countries.
Here are some estimations for how much money you’ll need to live as a digital nomad in different country tiers:
- Lower-cost countries: These are countries in Southeast Asia such as Thailand, Indonesia, and Vietnam, or South America such as Colombia and Argentina. There are also places such as Mexico, Turkey, Georgia, and Bulgaria. I’ve seen people live for as little as $800 per month in these countries, but I’ve lived comfortably at around $1,500 per month.
- Mid-range cost countries: The next tier of countries are places such as Costa Rica, Portugal, Spain, Italy, and Greece. I would budget a lot more here, about $2,000 - $3,000 per month, and a budget traveller could do it for $1,500 or less per month.
- Expensive countries: The United States, Australia, Japan, Singapore, France, and Germany are some examples. My budget would be around $3,000 - $4,000 a month, and a budget traveller could do it for $2,000 or less.
Here are some critical choices to make when budgeting for a digital nomad journey:
- The country you will live in: As seen above, the country you choose is the most crucial factor as to what your expenses will end up being. Many digital nomads start in cheaper countries in Asia, Eastern Europe, or South America. If you can afford a bigger budget, many more options are available.
- Lifestyle considerations:If you need to travel in style in luxury hotels or apartments, this will be much different than the backpacker who wants to live in a hostel.
- How often will you travel: The more you travel, the more you’ll spend due to transportation costs. When I started, I wanted to hop around to different cities or countries weekly, but I’ve since changed my approach. I now prefer the slower route, and I stay a minimum of one month in each location.
- Who you will travel with: If you’re travelling alone, this will be more expensive than having a partner or friend with you. I am fortunate to be able to travel with my girlfriend, and we budget for sharing expenses such as apartment rental costs and transportation.
Your most significant expenses as a digital nomad will usually be the following:
- Apartment rental costs: Rental costs will vary greatly depending on how you find them. Airbnb for long-term rentals is usually cheaper than hotels, and I’ve had a lot of luck with Facebook expat groups that post listings of apartment rentals.
- Transportation and flights: How much will your plane tickets cost? When you arrive, how will you get around the city? Will you rent a vehicle, take the bus or bicycle?
- Food: You can save a lot of money by shopping at local markets and cooking your food, but depending on the country, eating out can be pretty cheap.
- Co-working spaces: This isn’t always needed, and many people go without it, but it’s great when you need to get some serious work done or want to network with like-minded people.
- Visas: Each country has different visa requirements for entry, and not all of them are free.
- Health care and travel insurance: If you’re going to a country with costly health care, such as the United States, look into purchasing travel insurance.
My strategy is to pick my target country and budget according to all the above factors. I do extensive research into that country and find out the average cost of living using sources such as Numbeo to get a ballpark idea.
I’m in the mid-range regarding travel costs; I don’t need the fanciest accommodations, but I can’t do the hostel life anymore either.
I also highly recommend having an emergency fund of at least six months before starting this journey, as many issues can happen during long-term travel.
How much money it takes to live as a digital nomad depends on the person, the lifestyle choices, and the country you will live in. If you can figure out these things, you’ll have a good idea of how much money it’ll take to live comfortably.
Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.
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