Money Management Guide For Digital Nomads: How To Budget & Save on the Go

Managing money is tough for everyone, but for digital nomads, it’s an even bigger challenge. There are several uncontrollable things, such as unpredicted income or tricky accommodation expenses.

Without a solid plan, financial stress can take away the freedom that makes this lifestyle so appealing. 

In this article, we will show the best tips for money management to help digital nomads on the way. Don't miss a single sentence in this article!

1. Budgeting for the Digital Nomad Lifestyle

The first tip for money management for digital nomads is to set up a realistic budget. 

Know Your Costs

Before you leave, make sure to estimate your expenses.

It is said that planning is half the battle. And it couldn’t be more true. A good starting point is to break them down into two categories:

• Fixed expenses – Predictable costs that stay the same every month, such as subscriptions, insurance, and student loan payments.

• Variable expenses – Change based on location, including rent, food, transportation, and entertainment.

For the fixed one, you add up all the monthly recurring expenses you pay. Or, you can use money management apps such as Mint, and NomadWallet to track your spending automatically.

For variable expenses, we recommend doing some research. Costs vary wildly by location; a £5 meal in Vietnam might cost £15 in Spain. Simply type “cost of living in [city] per month” into Google to get a general idea. Read all the reviews and compare the prices that you find.

And when you have a number that fits your ability to pay, it’ll be easier to decide: Will you stay in a hostel, hotel, or Airbnb? Will you cook at home or eat out most days? Calculate the final expenses, and you have it. 

Creating a Flexible Budget

When you first started budgeting, you might have struggled to figure out where your money was going.

Use the 50/30/20 rule. It’s simple: half your income covers necessities like rent and groceries, 30% for entertainment (yes, that coffee habit is fine), and 20% is for savings or investments. 

Regarding slow months, there’s no better strategy than cutting expenses as much as possible. It may be a bit more effort, like instead of the metro, you cycle to save on commuting costs. 

Emergency Fund Essentials

No matter how well you plan, unexpected expenses are bound to happen. A lost client or a last-minute flight home could leave you scrambling for cash - unless you're prepared.

• How much should you save? Ideally, at least six months of living expenses, maybe even a year if your income isn’t stable.

• Where should you keep it? A high-yield savings account is a solid choice. But if you're always on the move, consider a multi-currency account like Wise or Revolut.

• When should you use it? Only for medical emergencies or emergencies requiring relocation. Not for overspending.

2. Managing Income Streams

Diversifying Income

How do digital nomads make money?

It is risky to rely on one income stream. And, instead of stressing over expenses, learn how to diversify your earnings.

If you're a freelancer, join local job groups and stay updated on new opportunities. You can also explore affiliate marketing or create content on TikTok and YouTube - both are booming worldwide.

Another option is remote consulting or coaching if you have expertise in a particular field. For example, you can sell design templates on Etsy if you're a graphic designer.

Invoicing & Payments

No one loves to be stuck chasing overdue payments, right? Getting paid on time is just as important as earning money. As late payment can throw off your budget, you should avoid it by sending invoices on time and choosing payment methods that work best for international transactions.

PayPal is often a popular choice,  but if you want lower fees for cross-border transfers, Wise is a great alternative. Handling multiple currencies? Payoneer can help you receive payments from global clients.

And to keep everything accessible, invoicing tools like Hiveage or Invoice2go help track payments and ensure you get paid on schedule.

Setting Stable Income Goals

It may seem like a strange strategy for money management for digital nomads. However, after all, having a stable income goal can actually make life on the road much easier.

Aim a little higher with your income goal - it’s one of the best ways to stay motivated and keep growing. For example, look at how much you earned last month, then challenge yourself to double it in the next. This mindset pushes you to explore every possible way to reach your target. 

Maybe it’s picking up a new skill, or taking on an extra online gig in your free time. If you’re up for it, try something totally different, such as working in a coffee shop for a while, growing and selling flowers The more you experiment, the better you get at spotting opportunities. Over time, making money won’t feel like a struggle.

This juggle is something many nomads master over time.

Tracking Income & Expenses

We know it’s hard to keep track of where your money goes, but getting into the habit of recording your spending will make a huge difference. The easiest way to start? 

Just note it on your phone whenever you spend. At the end of the day, take a quick look, and by the end of the week, review everything to see the total number. 

Over time, you’ll naturally get better at managing your money without thinking about it. 

3. Banking & Payments for Digital Nomads

One of the trickier parts of a global lifestyle is handling money across different countries. As a digital nomad, you might earn in US dollars, pay rent in euros, and buy dinner in Thai baht – all in the same month.

Best Digital Nomad Bank Accounts

Generally, you'll be charged an extra 3% on international transactions if you go through traditional banks. That doesn't sound like much initially, but those extra fees can drain your budget. So, why waste money when there's a better way?

We recommend digital banks - they're made for digital nomads. Wise, Revolut, and N26 offer low-cost transfers and better exchange rates. 

Wise turns sending and getting money abroad a breeze. Revolut is the best for managing multiple currencies, and N26 is popular among European digital nomads. 

Online-only banks for ease of access

Keeping money safe is a priority, as you will often be on the move. It’s also inconvenient to carry cash with you.  And having to exchange money every time you enter a new country? That’s neither smart nor cost-effective.

So, you should use online-only banks to make managing your money trouble-free. They give you immediate access to your funds, and enable you to pay in different currencies.

4. Taxes & Legal Considerations

Keeping the admin side of nomad life in check can save headaches.

Figuring out taxes as a digital nomad isn’t exactly fun, but it’s something you can’t ignore. The last thing you want is an unexpected tax bill or legal trouble because you didn’t know the rules. So, let’s break it down in a way that makes sense.

Understanding Tax Obligations

Taxes can get complicated when you’re constantly moving. Some countries tax you based on residency, while others (like the U.S.) tax you no matter where you live. That means you must know what rules apply to you, especially if you earn from different countries.

The steps will include: look into tax treaties, residency requirements, and any benefits like the Foreign Earned Income Exclusion (FEIE) or tax-free thresholds. 

If you’re British and remain a UK resident for tax purposes, you’ll need to file a self-assessment and possibly pay UK tax even on income earned abroad.

Mind the 183-Day (and Other Local) Rule

Most countries consider you a tax resident if you spend over 183 days (around 6 months) in that country in a year. Do your homework for each long-term stop.

For instance, if you decide to live in Portugal for 8 months, research Portugal’s rules on foreign freelancers or remote workers (Portugal, for example, has a Non-Habitual Resident (NHR) scheme that offers tax benefits to newcomers).

Some nomads hop between countries (never more than 3-6 months in one place) to legally minimise taxes. However, it requires discipline and careful planning to pull off – it’s not a loophole you should jump into without understanding the implications (also the ethics and risks).

Should You Hire a Tax Advisor?

When you ask: Where do I pay tax if I'm a digital nomad? or which digital nomad visa is best for tax? They can advise you about the latest regulations and help you save your taxes legally. Plus, they will take care of all the necessary documentation, so you do not have to bother. 

Further, they can advise you about whether you should register a business entity like an LLC or not, and if it can help you save more on your taxes.

Keeping Track of Receipts & Deductions

Many expenses could be tax-deductible when working remotely, such as coworking spaces, travel costs, or even your laptop. To make the most of these deductions, you need to stay organised. 

It doesn’t have to be complicated - please use apps like Expensify or even a simple Google Sheet to track. Simply retain your receipts and be informed of what is permissible in your nation of residency. 

5. Retirement Planning for Nomads

We all love the benefits of living as digital nomads - freedom, adventure, and the flexibility to work on your terms. However, there is one drawback to admit - no company-sponsored retirement plan, and no steady pension. So, retirement planning is really necessary for money management as a digital nomad.

Smart Investing

Investing is always the key to building your wealth. The good news? You don't need to be a money expert to get started.

Do you know about ETFs (exchange-traded funds)? They spread your money across different stocks, so you are not putting all your eggs in one basket.

Buying single stocks is where the bigger payoff is, but it's research-intensive and takes time. There's real estate too, if you want to have a passive income from rents.

Automating Savings

Saving money requires discipline, which is simple to forget when constantly on the go. And you can try automating your savings.

Most banks and investment apps allow automatic fund transfer, which means a portion of your salary automatically gets deposited into savings or investments every month (or whenever you get paid). 

If you earn variable income, try to select a percentage rather than an amount to continue saving in poor months.

6. Affordable Travel & Cost-Saving Tips

Choosing Budget-Friendly Locations

How to save money as a digital nomad? The first step is to choose affordable accommodation.

As you can decide where to work and live, you can stretch your budget so much further with cheaper accommodations.

Southeast Asia, Eastern Europe, and parts of Latin America are great for a low cost of living but still offer fast internet and an amazing culture to explore. 

Instead of spending a fortune in cities like London or New York, you could live comfortably in Bali, Mexico City, or Ho Chi Minh City for a fraction of the cost.

Long-Term Stays for Savings

To make the most out of your budget, be mindful of the peak tourist seasons since rental rates usually spike during these times. Additionally, a majority of landlords and Airbnb owners provide lower rates for longer rentals or early bookings, and if you agree to pay a deposit upfront, so you can even try haggling for a great deal.

In our experience, spending 3+ months in one country has allowed us to negotiate better rent and build relationships with locals, all of which lead to money saved and make travel more enriching.

Affordable Transport

While flights are sometimes necessary for moving between countries, you can save a lot on your daily commute. Try cycling or public transport instead of Uber or taxis - it will be much cheaper.

Plus, it’s a great way to stay active and take in your surroundings at a slower pace. And if walking is an option? Even better. You’ll barely spend anything on transport while enjoying the hidden corners of each place you visit.

Embrace Minimalism

Nomadic life taught us the beauty of owning less. Travelling with only carry-on luggage doesn’t just save you airline baggage fees; it also psychologically deters you from buying unnecessary stuff. There’s simply no space for that giant souvenir or extra pairs of shoes in a single backpack. 

Some travellers would mail home any new clothes or items to keep their backpack lean – the mailing cost forced them to really consider if each purchase was worth it. Minimalist travel and frugal habits often go hand in hand, only bring what you need.

7. Financial Security & Safety

Keeping Money Safe

Imagine being stranded in a foreign country without access to your bank account - what a nightmare. So, you should never rely on just one card or account. Instead, keep a mix of digital banks, credit, and debit cards.

Cash is still king in some places. Some nomads keep a small amount of USD or EUR as an emergency fund. And always have some hidden backup cash (like $100 or €100 tucked in a secret compartment of your luggage) as a last resort safety net.

CabinZero’s tip: Store backup cards separately from your main wallet. If one gets lost or stolen, you’ll still have a way to pay. Oh, and don’t forget online security, enable two-factor authentication, and never use public Wi-Fi for financial transactions. Better safe than sorry.

Insurance for Digital Nomads

Without a home country safety net, insurance becomes even more important for digital nomads. Many people assume travel insurance is enough, but if you’re living abroad long-term, you’ll need more than just coverage for lost luggage and delayed flights.

Health insurance is a must, especially in countries where medical expenses can be high. Some companies, like SafetyWing and World Nomads, offer plans specifically designed for remote workers. 

Emergency Cash Plan

Running into payment issues while travelling can be frustrating, so it’s always good to have a backup plan. It’s always smart to keep a small stash of local currency in a secure place, just in case you can’t use your card. 

Passive Income

Relying 100% on client work or a single remote job can be risky for nomads. If you fall ill, want to take a week to trek in the mountains, or your client contract ends suddenly, your cash flow can dry up.

For example, renting out your flat while you’re abroad can turn a sunk cost into income (just ensure you have someone to manage tenants or use a property service).

Even a few hundred pounds or dollars per month of passive income (covering a week’s rent or some grocery bills) can extend your travels significantly. As the saying goes, make money work for you, not the other way around.

There’s no single “right” way – only the way that works best for you.

Financial Freedom For A Sustainable Digital Nomad Lifestyle

Living as a digital nomad isn’t just about booking flights and hopping from one destination to another. If you want to do this long-term, you need financial stability. 

The key to financial freedom is smart money management. It will require you to have strategies to save consistently, make wise spending choices, and even look into investments that can grow your wealth over time. That’s why you need to take note of all of our tips above. 

Ready to take control of your finances? Download our free financial sheet designed specifically for money management as digital nomads and start planning smarter today.

If you found this helpful, share your thoughts in the comments and let others know your best budgeting tips. And don’t forget to share this with fellow travellers.

Ha Ngan