Four Financial Steps To Take If You Want To Become A Digital Nomad

By BankBazaar | November 12, 2018

If you’re one of those people who dreams of earning a living while you’re constantly on the move, then these financial steps can certainly help you make that dream come true.

A fair few of you out there have probably heard about digital nomads and what they do to earn a living. But for those of you who don’t know what a digital nomad is, don’t worry. It isn’t someone who walks about in a desert with a picture of a camel on his mobile phone.

Digital nomads are basically people who work remotely. They tend to move from one location to another and work in spaces like public libraries, coffee shops etc. All they require is a laptop and an internet connection.

Does that sound appealing to you? After all, what could be better than travelling a lot and earning an income while doing so? There’s nothing quite like being your own boss and working in accordance with a schedule that suits you.

While it does sound enticing, if you’re planning on becoming a digital nomad there are a few financial steps you need to take before you pack up your things and head out into the great, blue yonder.

Additional Reading: 6 Smart Money Management Tips For First-Time Freelancers

Remember, you can’t just up and leave one day without taking a few things into careful consideration. To help you on your way, here’s what you need to keep in mind before taking the plunge:

  • Clear Your Debts

One of the most important financial steps you can take, regardless of whether you want to be a digital nomad or not, is to clear all your outstanding debts as quickly as possible. While that’s certainly easier said than done, if you chalk out a plan to tackle your debts and chip away at them slowly but surely, you’ll be in the clear in no time at all.

Remember to start paying off any Credit Card debts you may have since they come with extremely high interest charges. If your debt is too much to manage, you could also take out a Personal Loan to pay them off. This will help you consolidate all your debts under one roof, so to speak. Plus, Personal Loan interest rates are a lot lower than Credit Card rates, which will ultimately help you divert more funds towards paying your debts off.

Additional Reading: 5 Tips On How To Get Out Of A Debt Trap

  • Build A Safety Fund

Once you’re done clearing your debts, it’s time to start saving and building a fund that you can fall back on during low-income periods or tide you over in times of emergencies. While becoming a digital nomad may sound exciting, it would be prudent of you to have a financial safety net in case things don’t exactly pan out the way you envisioned.

Since you’re going to be flitting about from place to place and possibly country to country, you’ll need to take into consideration the cost of travel, visas, accommodation, food, etc. If you’re confident that your work will bring in enough money to cover all of these things, that’s fantastic.

However, you will still need to have something set aside to keep your head above water in case you meet with an unexpected illness or if months go by with little to no work. Better safe than sorry after all.

Additional Reading5 Simple Yet Effective Investment Options For Your Emergency Fund

  • Invest

While you should certainly invest any spare money you have in investment avenues like Mutual Funds or Savings Schemes that can help you build your emergency fund in the long run, you should also make sure you invest in quality equipment so that you can get your work done quickly and efficiently while on the move.

A top-quality laptop, smartphone, tablet and portable charger should certainly be a priority, as well as anything else you may need for your line of work. You really don’t want to be upgrading your gear every now and then while you’re travelling, so investing on quality gear early on can save you time and money in the long run.

Additional Reading: Ridiculously Easy Investment Plans For Every Budget

  • Do Your Tax Research

Remember, even though you’ll be on the move, you still have to file your taxes back in India. Before you embrace everything that goes with becoming a digital nomad, make sure you’re clued in on how your new lifestyle will affect your tax situation.

Find out exactly what the rules pertaining to your income are and also find out if you can take advantage of any tax exemptions that can lower your tax burden. Although you may be ‘getting away from it all’, you still can’t escape the taxman.

Additional Reading: Batman VS The Taxman : Dawn Of Justice

That’s pretty much it. Keep these tips in mind and you will be primed to take on the world and earn a decent living out of it as well.

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Category: Money Management UCN

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2 thoughts on “Four Financial Steps To Take If You Want To Become A Digital Nomad

    1. Team BankBazaar

      Hi himanshu jindal,

      Glad to hear that. Have a nice day!

      Cheers,
      Team BankBazaar

      Reply

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