How to Avoid Debt as a Digital Nomad (+ Debt Management Tips)

Don’t let the lifestyle of a digital nomad lead you into debt. Here are some tips for nomads and freelancers on managing money and paying off debt.

In the 21st Century, debt is an ordinary part of life. If you’re in the US, student debt is like a millstone around your neck. In the UK in 2018, total household debt was £1.28 trillion. We have all encountered debt, have lost control of our debt, or know someone who has.

If you’re considering becoming a digital nomad, a self-employed freelancer, or a remote worker, the important thing to remember is that having debt should not deter you from pursuing a digital nomad lifestyle.

In fact, switching to a digital nomad way of life can help you fight back against debt thanks to new options for living freely and cheaply (more on our debt management tips below).

However, it’s also a lifestyle that can put you in the situation of accruing debt if you’re not careful with how you manage your money. As glamorous as some may make life seem, it takes as much management, and sometimes more, than any other kind of lifestyle.

It’s also good to remember, that this is a lifestyle that cannot be attained without a certain amount of privilege depending on where you come from, your dependents, and your family financial situation.

If you are lucky enough to enjoy this lifestyle, or our considering it, here is our best advice to keep it as financially sustainable as possible.

Avoiding Debt with a Digital Nomad Lifestyle

Living as a digital nomad can be difficult and, if you’re not savvy about your choices, you may find yourself falling into debt. This can be avoided if you make these tips part of your life and keep constantly aware of your ingoings and outgoing. Here is how to avoid debt as a digital nomad.

1) Prioritise What You Need

Here’s a secret about life as a digital nomad from someone who has lived it for several years: life as a digital nomad can be fantastic. It’s a life that offers so many daily highs that you don’t need to be spending money in order to keep yourself entertained.

The day-to-day life of moving around, hopping on trains and planes, seeing new sights, and exploring new cities is a thrill enough without feeling the need to spend money on nights out, restaurants, and new clothes. When the free events of your daily life are stimulating enough, you don’t want for as much.

All of this means that, suddenly, your money is only going on what you need, rather than what you want. Those of us who live 9-5 lives famously look forward to the weekend. The weekend equates to evening drinks, shopping days, cinema trips, all of which saps your hard-earned money.

Digital nomads wake up in a new city every few weeks/months and exploring that city takes time. Time that’s free. Suddenly, shopping and cinema trips just don’t mean as much. Your outgoings narrow down to the essentials:

Food (to cook at home)
Seasonal clothes
Flights and train tickets
New tech when essential
Insurance

These are your five main essential outgoings as a digital nomad. Everything else is optional and, if your life is stimulating enough, these optional things are demoted from needs to wants.

That being said, it’s also very easy to get caught up in eating expensive meals out, going on more excursions than you need to, or shopping for souvenirs that you ultimately don’t need. Ask yourself before every purchase, do I need this? And set yourself a ‘fun budget’ or what you can comfortably afford in terms of eating out and exploring.

Read More: Our books on minimalism are a great start if you struggle with defining what you actually need compared to what you want.

2) Plan Far Ahead

This isn’t always possible, we know that. We’ve been there. But, whenever it is possible, make it so. Plan as far ahead as possible to account for every single outgoing.

Let’s use a personal example to illustrate this point: In the spring of 2019, we spent three months house sitting in a suburb of Copenhagen. During that time, we meticulously planned a route through Eastern and Central Europe. We booked planes, train, and ferry tickets. We chose and pre-booked out hotels and hostels.

We costed everything in the spring, then spent our summer in Copenhagen working hard, saving money, organising our funds, and calculating our future outgoings. Every part of our trip, aside from a few meals out in Tallinn and Warsaw, was accounted for.

By booking in advance, jotting everything down, and saving for three months, we were able to afford our summer trip while knowing how much money we would have left when we arrived in The Netherlands. Once we got there, we had one month to hunker down, work, and save before moving on again.

On the other hand, we’ve also been in situations where we’ve shelled out for expensive last minutes flights and trains when that could have been avoided with a little planning. You can’t always plan ahead but if you can, do it, and spend that saved money on something else.

If you can plan ahead in this way, by saving, costing, calculating, and plotting your journey, do so. It allows you to account for all your essentials, put aside a bit extra for any extravagances, leave a margin of error, and pay for insurance, all the while knowing what state your bank account will be in at the end of your trip.

3) Cook Meals at Home

As a digital nomad, you know that ‘home’ is a relative term. We make every place we live/stay into a home, however temporary that may be. So, when we say ‘cook at home’ we mean ‘cook wherever you are’.

When your time is yours to do with as you will, there’s always the temptation to order takeout or head to the nearest cafe for lunch. If you take your laptop with you, after all, it’s now work so it’s allowed, right? Well, yes, if you have the money.

This isn’t a sustainable habit and it leads to unnecessary stress. Instead, get into the habit of keeping your fridge stocked and cooking almost all meals at home. Carry a small Aeropress or coffee filter in your suitcase to make decent coffee on the go.

Between meals, head out for some fresh air and to see whatever sights are around. Do that for free without needing to buy a takeout coffee or stopping in a diner for dinner.

If you’re not in the habit of buying groceries to cook at home, it’s always a surprise when you start doing it. You have to hand over a decently-sized chunk of money all at once. But that chunk of money will sustain you for a week or two.

Paying $100 in groceries that will last you two weeks is cheaper than spending $15-20 every time you go to a cafe or restaurant, minus tips. It’s a larger up-front amount but it goes an awful lot further.

Tip: Prioritize buying cheap items that bulk up meals like rice, pasta, beans, and lentils and supplement them with fresh vegetables and protein. Check if your local area has a farmer’s market or a grocer, these can be cheaper than the supermarket in many countries.

Here are some cheap and easy meals you can cook at home as a digital nomad that also minimize food wastage:

Fried rice: Boil your rice and stir-fry it with any vegetables and protein you have left in the fridge. Mix in an egg or top with a fried egg and you have a cheap and easy meal.

Soup: Making your own soup at home is incredibly easy and healthy. If you don’t have a hand blender or food processer then you can make ‘chunky’ soups by boiling cubed vegetables with a stock cube and herbs like rosemary or coriander. If you do have a hand blender then you can get very creative with your soups. Add cream for a heavier finish or a dollop of sour cream on top for flavour.

Rice, quinoa, or lentil bowls: Similar to fried rice, this involves cooking a base of rice or lentils and topping with anything you have in the fridge. Avocado, tuna, fresh greens, just put it on top and add a sauce of your choice like sriracha, salsa, or mayo.

Brunch staples: Many brunch staples are quick and easy to make at home, think smashed avocados on toast, poached eggs on toast, shakshuka, pancakes, These dishes require minimal ingredients and will save you a bomb on eating them out.

4) Know the Value of Your Work

People with salaried 9-5 jobs have the luxury of knowing exactly how much money they will have this time next month. Freelancers, self-employed remote workers, and digital nomads (most of us, anyway) don’t have this luxury. Our lives and our incomes are far less predictable.

This is a challenge. It means that, every month — even every week — we have to reassess how much money we have, how much we are owed, and how much work we currently have which will, eventually, transfer to future earnings whenever that payment is due.

Self-employed people and freelancers think about money far more than salaried workers do. We are always wondering where our next injection of money is coming from. In some ways, this is healthy. Hyper-awareness of money teaches us the value of it, the fickleness of it, and also how much every bit of work we do is worth.

Let’s say you’re a freelance writer and you just earned $100 for an article. It took you two days to research and write. How much do your salaried friends earn in two days? What did they do to earn it? How much does $100 mean to them? Probably less than it means to you.

Next time a payment lands in your account, think back to how much time and effort it took to find, pitch, research, and write the thing that then turned into $100. Then decide how you want to spend it. Your time and your work is valuable. How are you going to spend it?

Choosing to keep that money in your account, either for a rainy day or as part of a pile of savings, isn’t as exciting as spending that $100 on a new sweater or a meal out, but it is much more satisfying. The comfort and security you feel each day going forward is wonderful.

The longer that $100 sits in your account for, the more you respect your own value as a worker. You earned that money; it took time and effort. Now you get to look at it each day and feel your own worth reflected in it. It’s a tangible reflection of your value and it feels great.

Tip: Check out our favourite, easy-to-read, personal finance books if you want to learn to get savvier with your money.

5) Charge What You are Worth

This point only applies if you’re a freelance digital nomad. If you’re a salaried remote worker, you may not get as much out of this point but you may still be able to take something away from it.

This is something that every single freelance worker has to learn for themselves, and we learn it more as time goes on. Whether you’re a writer, an artist, a designer, an engineer, a photographer, or something else entirely, your work has real value.

Avoiding debt as a digital nomad is, of course, intrinsically tied to how much money you have and how much you earn. How much you earn is, in turn, tied to how much you are worth. The self-respect we build when we realise the value of our work also helps us say no to frivolities and careless purchases that can land us in debt.

When we first start out as digital nomads, we are all guilty of under-charging for what we produce. We want money, after all, and we’ll take whatever money we’re offered. At the beginning, it just feels good to be paid in exchange for something you create.

That feeling passes soon, and is replaced with a sense of self-worth. This means learning what our knowledge, our skills, and our time is worth. Once you learn that, you can charge clients accordingly.

When you get paid what you’re worth, a few good things start to happen:

You earn more, thus reducing your risk of falling into debt.
You respect your own time and effort more, thus reducing the urge to spend money frivolously.
You see your earnings and savings grow, which leads to a pleasant cycle of financial growth and the urge to hold onto that money.
Your ambition grows and you continue to prioritise well-paid work.

Success breeds an urge to continue working hard. You may then spend more time creating good work. That time spent on work isn’t being spent on shopping or needless purchases. Work becomes its own reward. Pride in your work is more satisfying than any frivolous purchase.

There is so much to be said for job satisfaction and satisfaction in the things we create, especially with regards to how this helps us avoid debt as a digital nomad. Debt often comes with reckless behaviour or bad management. Even boredom. All of this can be avoided when we find success and satisfaction with our work.

Read More:

What to do When a Client Won’t Pay You

How to Set and Raise Your Rates

5 Debt Management Tips

Here are a few tips for how to properly manage your debts as a digital nomad. As we said at the beginning, plans for becoming a freelancer and/or a digital nomad should not be scuppered by existing debts.

If you have debt, you can manage it and pay it off more effectively as a digital nomad. Here are some grounded and actionable debt management tips for digital nomads.

House Sitting

This is the big one. This is something we have advocated for countless times. House sitting is the key to saving money, building your portfolio, living carefree, and managing debts as a digital nomad.

House sitting means living free of rent and bills while offering an exchange of services. Your only outgoings are food and paying off those existing debts that are weighing you down. By becoming a house sitter, you get to live for free in one place, and put almost every penny you earn into getting rid of your debts.

However, house sitting is unpredictable. Some sits are only a weekend long. If, however, you can secure a sit that lasts for 3+ months, the things you can do with that time are astonishing. So, prioritise managing and paying off your debts.

Read More: Our guide to long term house sitting provides everything you need to know.

Slow Travel

If you really want to manage your debts as a digital nomad, learn to take things slow. If you’re paying for train and plane tickets every few weeks, your debts aren’t going anywhere and it’s a sure-fire way to get into debt if you can’t afford it. If you can, learn to stay still and prioritise putting your earnings into paying off your debts.

Once you’ve seen your debts decrease a little, you can then afford to move on. To pay for a flight or a new Airbnb. Slow travel is so much cheaper than being constantly on the road. So learn to stop, breathe, pay off a chunk of debts, then move on when you’re ready.

You’ll also get to know the countries you have the privilege of being in far more intimately and have more interesting stories and connections to show for it.

Tip: You can even consider one of the many digital nomad visas available if you’d like to stay in one country for up to a year.

Sharing with Other Remote Workers

Being a digital nomad can be a lonely life. Even though we get to meet new people every day, it is still a fairly isolated existence. You can combat this by building a community with other digital nomads.

This community might exist online or IRL. Either way, get in the habit of reaching out to other digital nomads for help.

A great way to manage your debts and curb your spending as a digital nomad is to share with others. That might mean sharing things you pay for (more on that below) or, even better, it might mean sharing a physical space.

If you’re in the same city as another digital nomad, you can half the cost of a hostel, an Airbnb, or a coworking space by going halves on it. Get into the habit of doing this wherever you go and watch your outgoings get cut in half. Suddenly, your debts are getting paid off twice as quickly. You also might make some long-term friends and connections.

Get Insurance for Everything

You can plan and plot your outgoings all you like, down to the penny, and things can still go wrong.

If you find the cheapest flight, pre-pay, and earn that money back all before you even catch your flight, it’s all for nothing if the airline loses your luggage. So, buy travel insurance.

If you’re European and you plan a trip to the US with all costs accounted for, but then you break your ankle stepping out of the taxi, your costs are going to skyrocket like you can’t imagine. So, buy travel insurance.

Buy travel insurance. We can’t stress this enough. Buy travel insurance. Your debts will only increase if you don’t. If you’re carrying expensive tech then make sure you’re also insured for theft or damage. It’s far easier to break your items or get robbed than you might imagine.

Tip: We recommend Saftey Wing who cater specifically to remote workers and digital nomads and have personally got us out of some situations.

Share Subscriptions with Other Nomads

This last one is a little cheeky, and it relies on you building a community — either in person or online — with other digital nomads (something we highly recommend doing).

When we say subscriptions, we mean Netflix, Spotify, Amazon Prime, and any other streaming services. If you know just one other digital nomad who is interested, then you can half the price of your subscriptions while doubling the amount you have by sharing your subscriptions with them.

Sort out a plan: you pay for Netflix, they pay for Spotify. Now you get music and TV but you’re only paying for one. This also helps build up a fun sense of camaraderie with other digital nomads. If you’re running a website and want expensive SEO software then share with others, people do it all the time and it saves a lot of money.

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