The Financial Challenges of Digital Nomads and How to Overcome Them

If you’re a digital nomad and working as a freelancer, you’re probably already familiar with the “feast and famine” financial cycle: some months when you generate a high income and some months when you barely have enough money to pay the bills. 

While in your 20s or early 30s, this might not seem all that bad but ask yourself this: how will you spend your retirement? Will you have enough money to maintain your current lifestyle? (Assuming that your doctor won’t forbid you to drink mojitos, of course.)

If the answer is no (and I’m not referring to the mojitos), then it’s probably time to start thinking about your future and how to start putting some money aside for your golden years.

Here’s how you do it step by step.

1. Reduce Your Costs Wherever Possible

You need to save as much money.

If you want to reduce your costs today, you should use a monthly budget. Just put everything you spend on a list and, at the end of the month, see what unnecessary purchases you’ve made. Next month, set that money aside and put it in a savings account.

2. Spot Your “Hidden” Fees

Some digital nomads are still using a traditional banking service from their country of origin, which is a big mistake. Some banks charge extra fees when you use their cards abroad. On top of that, you might also end up losing money via the bank’s exchange rate.

In the best case scenario, you would only be charged a 1% fee. If you’re spending $2,000 per month, that’s $20, which you could be saving each month.  

Instead of using your old account, you should switch to a digital bank. Bunq (link to bunq review), for example, charges zero fees when using your card in Europe. On top of that, you get free cash withdrawals and up to 25 sub-accounts in almost any currency you want. Switching to a digital bank means that you will also say goodbye to such fees.

The same goes for money transfers. Are you sending money to your loved ones back in your home country? If so, consider abandoning the classic bank transfers and switching to a money transfer app like Wise. You’ll end up paying lower fees and sending money at a better exchange rate. 

What to Do Next

Start by finding the best digital bank for you, that will help you save money. Also think about looking for a money transfer app. You can search for both with Sortter. Our services are 100% free.