There are so many amazing places to live across the country that some people can’t pick just one. By living on the road, modern nomads can watch the leaves change in New England and then spend the winter months on tropical beaches in Florida. They can immerse themselves in endless natural wonders, vibrant cities, and unique cultures.
Remote work has made digital nomadism possible for more people, who can clock in anywhere that has a WiFi connection. In 2023, there were more than 31 million American nomads traveling around the world, making up nearly half of all digital nomads globally.
As these digital nomads set out to see the world, there is often a learning curve in designing travel plans, getting into workflows, and developing money management best practices. Remote workers still need to think about taxes and paying their bills, even when they’re watching stunning sunsets in Yosemite.
If you are ready to hit the open road, make sure you have a financial plan in place. Here are a few things to consider as you set a budget and review your annual expenses.
Use an Online Bank
If you want to stay in one place for a long time, it might make sense to open an account with your local bank or credit union. However, if you plan to travel across the country or even the globe, you might want to work with an online bank instead.
An online bank will often have 24/7 service hours, which is essential if you face a financial emergency. Conversely, if you have a local bank, you might have to get up early or stay up late to accommodate their regional business hours. Many large banks also have agreements with international banks to reduce or eliminate fees, this means you can take money from an ATM by another bank without paying a hefty cost. Other perks can include credit score monitoring and automatic alerts if there are signs of fraud.
Explore your banking options and consider where it is best to put your money. You might decide to go with a large institution that has several international partners or opt for online banking which could give you more flexibility based on your needs.
Establish a Permanent Address
Even if you live nomadically, you still need a permanent address. You’ll use it to set up financial accounts, receive mail, and file your taxes. Fortunately, there are multiple options for establishing an address while living on the road.
- Ask a friend or family member: A relative can collect your mail and send it to you periodically.
- Invest in a virtual mailbox: This gives you a permanent address for receiving your mail where you can read your letters, bills, and documents online.
- Pay for a co-working space: Some co-working spaces offer virtual office options where they will collect your mail for you.
You might decide that multiple options work for you. A relative might accept your letters while you use a service to read important documents digitally.
Make the Most of Credit Card Points
Credit card companies offer rewards as incentives for choosing them over their competitors. In most cases, the more money you spend, the more cash back, miles, or points you earn. You can use these rewards to lower your bills or cover expenses like travel.
Explore your options to find credit cards that meet your needs. For example, travelers often choose airline cards so they can take flights for free with the miles or points they earn. You can also look into hotel cards that offer free stays at certain thresholds.
Make sure you choose a card for a brand that you will actually use, otherwise, you might have a hard time redeeming your points. You also want to look for high-value credit card companies that give you more rewards than their competitors.
Always Have More Than One Way to Pay
Stay prepared when you travel by having multiple payment options. For example, some places only accept specific credit cards. Opting for multiple credit cards can also help you during a crisis. If your credit card gets stolen or used for fraud, you can cancel it and use another while you wait for a replacement to arrive.
Along with diversifying your credit cards, explore different ways to spend. Keep a debit card on you and some cash in case of emergency. Look into electronic payment accounts like PayPal and Venmo as well. You can even carry checks. This allows you to choose the best possible payment option for different situations you encounter.
Set up Automatic Bill Payments
Time flies when you’re on the road, which means you might forget about important dates when your bills are due. One option is to set up automatic payments that cover these bills for you. This way, you can protect your credit by regularly paying bills on time.
While automatic payments are convenient, you could accidentally fall into debt if your credit companies overdraw from your account before you can deposit more money into it. Try to keep an updated budget so you don’t overspend and check your accounts regularly to make sure you have enough funds.
Additionally, some people prefer to automatically pay all of their bills on the first of the month for ease, while others spread their costs throughout the 30 days. Choose what works best for you.
Stay On Top of Budgeting
Budgeting is the process of allocating money to different expenses to ensure you have enough throughout the month. It prevents you from overspending so you don’t fall into debt. Setting a budget doesn’t mean you need to give up luxuries or miss out on activities, but instead creates space to make sure you have money for the things you value.
Fortunately, there are ways to make saving money fun . You can invest in automatic savings and investments that eliminate the temptation to spend that money. You can use budgeting apps that gamify savings and reward you for hitting your budget goals. You can also set personal milestones where you celebrate saving a certain amount each month.
Carry Health Insurance
Health insurance is essential for digital nomads. If something happens while you are hiking or staying in a new place, you need to know that your medical needs are covered. There are healthcare options designed for nomads in today’s market. You might benefit from one of these plans or you might be able to use your current plan if can accommodate your lifestyle.
Consider Travel Insurance
Along with health insurance, look into long-term travel insurance if you plan to stay on the road. Travel insurance can help with disruptions like flight cancellations and cruise delays, but it is particularly useful for covering lost property, theft, or healthcare needs.
Traveler’s insurance can be a resource for financial risk management and give you peace of mind that you are covered if there is an emergency in your area or you are suddenly in a financial bind because of your travels.
Don’t Forget About Taxes
Should you decide to leave the country doesn’t mean you no longer have to pay taxes. The IRS has policies for international nomads to ensure they report their income and pay taxes on time. Here are a few tax-related things to consider as you prepare to hit the road:
Set aside funds to pay your taxes if you know that you will owe money. This can take the sting away from a large bill. Work with an accountant who can file your taxes for you. They can also help you with any necessary forms. Your taxes vary depending on your work situation. Self-employed individuals often need to pay quarterly estimated taxes with strict deadlines.
The first year as a nomad might be challenging as you learn about filing taxes. However, you can use this time to build healthy habits that make filing easier.
Set Financial Goals
Just because you live on the road doesn’t mean you can’t save for your future. Consider your financial goals and what they involve. For example, you might live nomadically now with the goal of buying a house in the future. You might decide to save money each month and invest in an RV for more comfortable nomadic living. Even if you’re a young professional, you might want to start preparing for retirement.
Setting small goals today can add up over time. These goals can also incentivize you to save money because you will understand the value of every dollar you tuck away.
Both travel freedom and financial freedom are possible with wise money management. You can travel the country and enjoy life without stressing about your finances. These tips will help you build good habits that protect your finances and set you up for success in the long run.