Living abroad for a decade, I managed to spend less money than I did back in the U.S. Now, as you consider the possibility of becoming a full-time traveler, take advice from experienced digital nomads. Here are some tips to guide you on your journey:
1. Diversify Your Income:
The key challenge of being a digital nomad is having income streams that are not tied to a specific location. Chris Oberman, a seasoned expat and travel blogger, suggests creating multiple sources of income to avoid relying on just one. In addition to running a travel blog, Oberman has taken on various roles such as consulting, teaching English, producing music, and promoting performers.
2. Choose the Right Regions:
For the best combination of affordability, safety, and quality of life, consider starting your travels in Latin America, Southern and Eastern Europe, and Southeast Asia. Isabella Biava, who documented her frugal travels in Latin America through her blog ‘Solo Nomad Journeys,’ recommends living like a local and seeking affordable rental options.
3. Embrace Slow Travel:
Marina Guastavino, a digital nomad who developed the “Directo” travel extension, advises staying in one place for a month or two to fully immerse yourself in the local culture and reduce transportation costs. This approach not only saves money on flights and accommodations but also allows for a deeper exploration of each destination.
4. Find Free Accommodations:
Instead of paying for hotels or long-term rentals, consider house-sitting at upscale homes in exchange for pet care while the owners are away. Websites like TrustedHousesitters.com and MindMyHouse.com offer opportunities for cost-free stays. You can also explore home exchanges or volunteer programs that provide accommodation in exchange for work.
5. Secure International Health Insurance:
While health insurance is essential, you don’t necessarily have to opt for expensive U.S. plans. Investing in international health insurance can help mitigate financial risks associated with healthcare while living the digital nomad lifestyle.
By following these tips and insights from experienced travelers, you can embark on your full-time travel journey with greater confidence and financial prudence.
Andrew Jernigan, the founder of travel insurance company Insured Nomads, highlighted the importance of having a comprehensive insurance plan that covers illness, injury, and transportation expenses. Some policies also include coverage for trip interruptions, delays, and even relocation in case of political unrest, terrorism, pandemics, or natural disasters.
When living overseas, you may be eligible for the foreign earned income exclusion, allowing you to exclude a portion of your income from U.S. taxes. This exclusion currently applies to the first $130,000 of income for individuals ($260,000 for married couples). To qualify, you must either spend at least 330 days outside the U.S. during the tax year or have long-term legal residency in another country. However, it’s important to be aware that you may still owe taxes in your host country, so consulting with a tax expert before relocating is advisable.
Jeremy Murchland, CEO of Seven Corners, emphasized the need to plan for potential tax obligations in your new country and suggested considering tax-friendly destinations. By strategically choosing your overseas location, adopting a local lifestyle, and eliminating U.S.-based expenses like housing, car payments, and health insurance, you can live abroad affordably.
For more financial tips and advice, visit GOBankingRates.com.
