Over the past few years, a huge growing number of people have ditched the traditional office and embraced a new way of working: the digital nomad lifestyle. As technology advances, more people are able to work from anywhere in the world, and as a result, the number of digital nomads has skyrocketed.

For Americans, in particular, the digital nomad lifestyle presents a unique opportunity for freedom and flexibility. With the ability to work from any location, they are empowered to explore the world and pursue passions without being tethered to a traditional office. 

In this article, we’ll explore why more Americans are choosing the digital nomad lifestyle, the costs associated with this lifestyle, the challenges they face, and more.

Why Become a Digital Nomad?

The digital nomad lifestyle is appealing to many for a variety of reasons. Here are some of the most common motivations for becoming a digital nomad:

Freedom and Flexibility

One of the biggest draws of the digital nomad lifestyle is the ability to work from anywhere in the world. This freedom and flexibility allow digital nomads to pursue their passions, travel the world, and work on their own terms.

Increased Earning Potential

Many digital nomads have found that they are able to earn more money by working remotely. Without the costs associated with maintaining an office, digital nomads are often able to charge higher rates for their services.

Improved Work-Life Balance

By working remotely, digital nomads are able to create a better work-life balance. They can work when they are most productive, take breaks when they need to, and have more time for their personal lives.

Better Quality of Life

With the ability to work from anywhere, digital nomads can choose to live in places with a lower cost of living or a better quality of life. They can also explore new cultures, learn new languages, and make new friends.

Who Are Digital Nomads

While the digital nomad lifestyle is appealing to many, not everyone is cut out for this way of working. Here are some statistics on who are digital nomads and why they choose this lifestyle:

Age: According to a study by MBO Partners, the majority of digital nomads are between the ages of 25 and 44. However, there is a growing number of older digital nomads, with many people in their 50s and 60s embracing this lifestyle.

Gender: While there are no official statistics on the gender breakdown of digital nomads, it is clear more women are choosing this lifestyle. In fact, a study by FlexJobs found that women are more likely than men to work remotely.

Occupation: Digital nomads come from a range of income levels, but many earn a comfortable living by working remotely.

What Seasoned Nomads Say

What Does It Cost to be a Digital Nomad

While the digital nomad lifestyle offers freedom and flexibility, it does come with some costs. Here are some of the expenses you can expect as a  digital nomad:

Food and Entertainment

The cost of food and entertainment will depend on the individual’s preference and location. Eating out regularly or opting for high-end dining experiences can increase costs significantly. Digital nomads can expect to spend $500-$1,000 per month on food and entertainment.

Work-related Expenses

Digital nomads may incur work-related expenses such as purchasing specialized equipment or software. The cost of these expenses will depend on the nature of their work, but digital nomads can expect to spend $50-$200 per month on work-related expenses.

Overall, the cost of being a digital nomad can range from $2,000 to $5,000 per month or more depending on individual preferences and travel destinations. It is important for digital nomads to carefully plan and budget for their expenses to ensure they can sustain their lifestyle while still earning an income.

The Dream: What is a Digital Nomad?

Has it been your dream to travel the world ever since you were young? Back then, it might have been an impossible dream but now, millions of people are doing it. How?

They’re digital nomads–people who work and travel the world full-time. They rely on their laptops, phones, and WiFi to be able to work anywhere. At the same time, they discover new places, meet new people, and learn about various cultures from the inside out.

It may seem like a luxurious lifestyle decades ago but due to the rise of remote work worldwide, anyone can do it now–including you!

Table of Contents

The Dream: What is a Digital Nomad?
3 Things You Need to Prepare
     1. Your “Home” Life
     2. Your Career
     3. Your Finances: Costing, Saving, & Budgeting
The Steps: Things to Prepare
     1. Nomad Insurance
     2. Banking
     3. Connectivity
     4. Your Nomad Gear
     5. Taxes
     6. Emergency Funds
Your First Trip: Planning Where to Go
     1. Location & Time Zone
     2. Look for Nomad Hotspots
     3. Research Visa Requirements
     4. Accommodations
     5. Fun & Play
     6. Find a Community
Final Steps
Take Your Time

Highlights of the Digital Nomad Lifestyle

● You get to travel the world at your own pace.
● You can make incredible memories all over the world and check off your bucket list of travel dreams.
● You are free from office politics and the 9-5 timetable.
● You’re your own boss. You get to set your work hours, vacation times, and hustle times.

Challenges of the Digital Nomad Lifestyle

● Your productivity can suffer if you don’t manage your time properly.
● Moving constantly can get tiring if you don’t pace yourself.
● You may miss your family back home.

But worry not, because these challenges can be overcome, many seasoned nomads have done it! And these obstacles are nothing compared to the happiness brought by the freedom and adventures of being a digital nomad.

3 Things You Need to Prepare

Before you start on your journey, there are quite a few things you need to prepare and bases you need to cover. Here are 3 things you need to arrange before you start packing up:

1. Your “Home” Life

The first base you need to cover is your “home” life. What ties do you have with your current home base? It’s not just apartments and cars to think about for most people. There are also furniture, appliances, gym memberships, and other subscriptions.

Minimalism is the way of life for digital nomads, for both belongings and budgeting. Start living a minimalist life while you’re still home by cutting down your costs and getting rid of items you don’t need and rarely use.

Digital nomads bring their whole life with them in a backpack or a suitcase, so preparing and minimizing your life back home is a must.

2. Your Career

There are only three kinds of digital nomads–employees, freelancers, and entrepreneurs.

● Remote Work

If you’re currently working for a company, you can ask your current employer to let you work online. If that’s not possible, you can look for other career opportunities with remote companies.

Pro Tip: Look for remote companies instead of a company offering a remote job. Some companies hire remote employees but still have other employees reporting in the office. Sometimes, managers have a bias towards teammates who are in the office compared to remote workers.

Remote companies, on the other hand, operate 100% remotely so there are no biases among teammates. There will also be no logistical concerns because everyone, including the owners, works from home.

If you’re looking for a new career, there are popular remote jobs among digital nomads here.

● Freelance

According to Statista, around 35% of digital nomads are freelancers or gig workers. Freelancers, unlike remote employees, work on a client-to-client or project-to-project basis.

You can invest in your own skills and look for projects online. This is popular among digital nomads as freelancers are in charge of their own time.

● Online Business

Did you know that 88% of digital nomads in 2022 are self-employed, 66% of whom are business owners? That’s right! The majority of digital nomads are not remote employees.

You can operate your current business online and make it a remote company. Or if you don’t have one yet, you can turn your passion into an online business.

It is not recommended to quit your job before going on your first trip. You need to settle your finances and have a healthy amount of savings first.

3. Your Finances: Costing, Saving, & Budgeting

Seasoned nomads carefully manage their finances per month, per year, and per trip. Before starting your journey, plan and settle your finances before you leave.

● Settle your debts. It’s best to settle all your debts before going.

● Savings = 6 months of living costs. Seasoned nomads advise saving six months’ worth of costs. This will act as your safety cushion during your travels in case you encounter unexpected costs or spontaneous events.

● Banking and Credit Cards. Picking the right bank account is crucial for digital nomads as you’ll be booking and transacting almost everything digitally. Find a travel credit card that you don’t need to pay for transfers, debit payments, contactless payments, and ATM withdrawals. It’s also important to have 24/7 customer service you can go to in case you have a concern from a couple of time zones away.

The Steps to Get Started

While settling your “home” life, remote career, and finances, you should need to have travel and health insurance, a travel credit card, a reliable internet connection, and necessary gadgets and gear.

1.  Nomad Insurance

“If you cannot afford insurance, you cannot afford to travel”, says Nora Dunn, a financial planner and a digital nomad for 16 years.

Insurance is more than a backup plan or a monthly bill you have to settle. It is an investment you make for yourself. Being a digital nomad comes with adventures and risks. Insurance mitigates those risks so you don’t blow off your bank.

Safety Wing is the most popular insurance among digital nomads. For only $42 a month, you’ll be covered for unexpected illness or injury including eligible medical expenses like hospital bills and prescription drugs, including COVID-19.

World Nomads, on the other hand, is an insurance made for nomads because it’s made by travelers. So whether it’s a lost laptop or an injury, you’ll be covered. They have a standard plan and an explorer plan you can check on their website.

2. Banking

Find a travel credit card that you don’t need to pay for transfers, debit payments, contactless payments, and ATM withdrawals.

3. Connectivity

a. Phone Connection

Aside from the WiFi connection, you’ll be getting from your accommodations and co-working space, you also need an internet connection on the go. When you’re not working and traveling, you will be using a mobile connection so you need a fast and reliable phone connection wherever you go.

1. International Plan

The simplest option is to check your service provider and upgrade your current plan to cover international service. 

2. Local SIM Card

A cheaper option, and more popular among digital nomads, is to buy a local SIM card when you’re in a new country. Their data plans are way more affordable than availing an international plan

You can buy a local SIM in international airports and convenience stores. Just present your passport and have your phone unlocked.

b. Mobile Hotspot

You can also bring your own WiFi connection with a mobile hotspot or a pocket WiFi. It’s a small device that acts as a portable router where you can connect up to 20 devices.

c. VPN

As a remote worker, you will be connecting with different WiFi connections making your data vulnerable to scams and cyber attacks. A Virtual Private Network, or VPN, will protect your data from unknown sources.

4. Your Nomad Gear

a. Laptop

Your laptop will be your main investment as a remote worker. The model and specs would depend on your line of work and specialty. But you don’t need to have the latest model every year. What you need is a sturdy laptop that will last you for at least four years. So invest in a good model.

c. Backpack (or suitcase)

Your backpack is going to contain your entire life wherever you go so it must be big enough and durable. Not everyone is a backpack person and that’s alright. You can bring with you a suitcase.

However, you still need a smaller bag for your gadgets, passport, wallet, and other necessary things. You don’t want your camera and laptop to be thrown around in the airport.

5. Taxes

If you’re an American, you still need to file your taxes even if you’re not working in the US. It’s best to look up your home country’s tax regulations before flying out.

Pro Tip: If you spend less than a month in the USA each year, look into the Foreign Earned Income Exclusion where you will only pay Social Security, depending on your situation.

6. Emergency Funds

Aside from your savings and insurance, you also need emergency funds. The rule of thumb is to have at least 6 months of savings at all times.

Emergency funds are for urgent and difficult moments where you have to produce cash instantly. Nora Dunn says your minimum emergency funds should cover your emergency flight and other expenses back “home”.

Your First Trip: Planning Where to Go

1. Location & Timezone

When choosing your first destination, we recommend a location that’s not too far from your work’s time zone. This way, you just have a few hours of adjustment to your company or client’s demands.

2. Look for Nomad Hotspots

Nomad hubs’ cost of living is fairly priced for expats and digital nomads. They’re not overly priced like tourist destinations. They also have the infrastructure–like coworking spaces and internet connections–digital nomads need to work and play at the same time.

Check out the top 10 destinations for digital nomads if you’re not sure where to go yet. 

@roza_sifrin

4. Accommodations

For digital nomads, the most important consideration before moving to a new place is accommodations. Should you stay in a hostel, book a hotel, or share an apartment? Regardless of your preference, safety and security must always be your top priority especially when you’re traveling alone.

Your accommodations would depend on your level of comfort–-are you comfortable sharing space with strangers or do you need your own private space?

● Airbnb is the most popular among digital nomads since you can book a room, apartment, or an entire house for yourself. Hosts have properties all over the world and you can choose which city or district you want to stay in. They also have monthly discounts for long-term stays.

● Hostels are a great place to meet and connect with fellow travelers and nomads. You can share a room with other people or have your own space. They have common areas where you can interact with other travelers, some hostels even host barbeque parties or drinking parties.

● A Coliving Space is a building where remote workers and travelers stay. It’s a dormitory-type accommodation with coworking space either in the same building or just a few minutes away. 

● Housesitting is a type of free accommodation. All you have to do is watch over someone’s house while they’re away and do a few chores like keeping the house clean or watering their plants.

6. Find a Community

Loneliness is often what digital nomads battle when traveling alone. So the role that a community plays in your stay is crucial. It is what makes the new place feel like home. 

Before you go to a place, you can find fellow nomads on Facebook pages or Reddit subgroups. You can post a question and surely people are more than happy to answer.

When you’re already in the area, find common places like coworking spaces, dining areas, and lounges. Even a common kitchen is a good place!

Start conversations and foster connections. Your fellow digital nomads may have tips and tricks for what’s bugging you lately. Ask the locals what they do and where they go for fun.

Finals Steps

1. Start simplifying your lifestyle. Becoming a digital nomad doesn’t have to be an abrupt lifestyle change. You can slowly adjust your lifestyle while you’re still at “home” by learning to manage your finances and time.

2. Transition to digital platforms and services. When you’re always on the move, you will rely on your phone and laptop for almost everything–from banking to booking. So research what apps digital nomads use and start using them.

3. Arrange necessary documents like passports, visas, insurance, and international driver’s license.

4. Join Facebook pages and see what most nomads are talking about. Most of the time, nomads share their experiences online. Reading about their discussions will sort of immerse you in the culture of digital nomads.

5. Tell your friends and family about your plans and how you’re preparing for them. It might take them a while to understand so give them time.

One of the main questions for beginner digital nomads is, how much does it cost to be a digital nomad?

“Can I afford it?” “Do I have enough savings?”

These concerns are valid. The worldwide currencies and varying costs of living can be confusing and, sometimes, intimidating.

But worry not because this article will show all the cost factors you need to consider and how much you need for your first trip.

Factors Affecting Budget

1. Location & Season

Staying near the Eiffel Tower in Paris or Macchu Picchu in Peru is going to cost more than Ko Lanta, Thailand, or Lisbon. It’s because tourist destinations charge tourist prices. 

Additionally, during the high season, prices are definitely higher than usual. However, you don’t want to go during the low season and experience bad weather and floods.

Find a balance between locations and seasons where you can live for a long period of time. Remember, you’re not on vacation.

3. Accommodations

Your accommodation (or rent) is usually your biggest expense. You can either rent, do house sitting or do house swapping. Most digital nomads rent. In either case, your options are Airbnbs, hostels, local apartments, and co-living spaces. Luckily, you can easily research this to see what the cost for your accommodations will be in a particular place and time.

4. Food

Food can take up a big chunk of your budget if you’re going to eat our often. Eating fast food and food packets may save you money, but is an unhealthy option in the long run.

Experienced digital nomads recommend a mix of eating out and cooking your own meals to save money.

5. Duration of Stay

It’s the rule of thumb for digital nomads that the longer you stay in an area, the cheaper it gets. This is because you can get more discounts on your accommodations when you book for months than weeks, on everything from a bike rental to coworking & your housing.

Types of Travel and Cost of Places

Taking all the factors above into consideration, your budget would depend on the kind of lifestyle you’re going to live, the cost of the place you’re going, and the activities you’re going to do.

• Are you on a tight budget or a more comfortable budget?
• Are you going to a cheaper country, a mid-range country, or an expensive country?
• What kind of activities are you going to do–hiking, scuba diving, sky diving, or museum trips?

Based on how strict your budget will be, here is what it costs to be a digital nomad:

COMFORTABLE TRAVELER

This digital nomad budget is not blowing the bank, but eating out once in a while, opting for faster transportation, more comfortable accommodations, sometimes renting a bike or scooter, and coworking spaces. Budgets vary widely, but most digital nomads fall into this category.

$1,600 / month in Cheaper Countries
Example: Thailand, Vietnam, Indonesia, Columbia

$2,900 / month in Midrange Countries
Examples: Portugal, Spain, Singapore, Australia

You can afford it!

Financial planner Nora Dunn, a digital nomad for 16 years and contributor to our online courses, says that midrange countries are achievable destinations, even for beginning digital nomads. Even comfortable travel is possible!

If you’re earning a strong currency like US dollar or Euro, you can afford “a good standard of living and high quality of life for a fraction of what you spend in US or Europe.”

You Need 6 Months of Savings

The general rule of seasoned digital nomads is to have savings equivalent to six months of your monthly essential costs. This means that if you’re on a comfortable budget in Thailand of $1,600 per month, you should have $ 9,600 in your savings account.

Why have savings and why six months?

Your savings will act as a cushion in case you encounter unexpected turns in your trip. *Knock on wood* Let’s say you resign from your current job or can’t find a client, your savings will save you from abruptly cutting your trip short. For six months, you can still continue your lifestyle while you look for another stream of income.

Aside from savings, there are also other costs you need to include in your budget before you start your trip. These are:

• Flight ticket           800 USD (one-way)
• Insurance               42 USD (per month*)

*SafetyWing is popular among digital nomads because they provide a combination of health and travel insurance for only $42 per month (28 days).

Factors Affecting Budget

Digital nomads have different budget allotments because they have different needs and preferences. 

Some nomads save on accommodations by sharing apartments or living in hostels while others prefer having their own space. Other nomads love extreme sports like skydiving and need extra room in their budget for activities.

Have you ever seen pictures of people who seem to be on vacation ALL THE TIME? How can they be practicing yoga in Bali when a few months ago they were hiking on the Inca Trail in Peru?

Do you ever wonder how they can afford it and what they do for a living?

Chances are, they’re digital nomads.

What is a Digital Nomad?

Digital nomads are remote workers, either full-time or part-time, constantly traveling all around the world. They live an exciting lifestyle, always discovering new places, meeting new people, and discovering various cultures from the inside out.

Online Careers and the Nomad Lifestyle

Even before 2020, digital nomads are already working remotely while traveling routinely. According to a study conducted by MBO, in 2019, there are already 7.3 million American digital nomads. This number increased to 10.9 million in 2020. Today, there are over 35 million digital nomads around the world.

Digital nomads have three kinds of work: freelancers, remote workers, and entrepreneurs. In fact, according to A Brother Abroad, only 17% of nomads are employed by companies and 28% are freelance workers. The majority of nomads, around 55%, have their own businesses.

Most employed and freelance nomads work in marketing, IT, design, writing, and eCommerce. These professions have been flexible for years, even decades, allowing remote workers to be location independent.

However, since the pandemic, more companies are now switching to remote work, for good. According to Owl Labs, 16% of companies in the world are now operating 100% remotely. Since this switch, the digital nomad lifestyle is now possible for all types of professions. A lot of digital nomads did not have to switch careers to make their dream lifestyle come true. They simply convinced their companies to let them work remotely.

Closing the Gender Gap

Did you know that the digital nomad lifestyle is closing the gender gap in income and career?

That’s right!

According to Remote.Co., around 30% of fully remote businesses have women CEOs, founders, or directors. This is compared to 5.2% of women CEOs in traditional workspaces.

Why do remote companies hire women and let them lead? There are several factors to this however, most studies point to flexibility. So, remote work is actually more supportive of women’s careers progressing.

“Working-from-Home” Away from Home

Where do they stay? How do they work?

The short answer: “home is where the WiFi is.”

Pros and Cons of the Digital Nomad Lifestyle

The digital nomad lifestyle is exciting and dream-like. Most nomads describe it as the best years of their life. However, the lifestyle comes with some pros and cons.

The Highlights

1. Freedom and adventure. Most nomads stay in a new place for 3 to 6 months before moving to a new place. Other nomads stay for more than a year. Since there are no rules, digital nomads can do whatever they want, whenever they want. They can go on whatever adventure they feel like going on and go to whatever country they want.

2. You’re your own boss. You’re free from the 9-5 timetable and office politics so you’re only responsible for yourself. You set your own schedule; how often you work and how long your vacation will be.

3. Your dollar goes a long way in low-cost-of-living areas. So your month’s worth of rent in the US can stretch for three to six months in other countries. In fact, you can actually save more money as a digital nomad than when you’re staying at your home base.

The Challenges

1. Loneliness. This is the problem 51% of digital nomads battle with. You say goodbye as often as you say hello and you can miss your friends and family back home.

2. Your productivity can suffer from constantly moving. You need to manage your time well, avoid distractions, and learn to adjust to new locations.

3. Visas shouldn’t be an issue, so make it a habit to always check the requirements before going to another country.