Recent events, such as the tech layoffs and the possibility of a global banking crisis show just how quickly anyone’s life can be upended. And if you are a digital nomad without a fixed income, permanent address, or easy access to banking services, these events can make you even more vulnerable. Yet, giving up your free and flexible lifestyle is out of the question. So, what is the game plan?
The good news is that you can do something to ensure your bank balance stays in the black, even as you work while traveling the world. In this blog post, we will provide some of the most effective tips to help digital nomads like yourself successfully manage their finances on the go.
First, who is a digital nomad?
With many companies and industries adapting to telecommuting, more individuals realize they can work from anywhere with a laptop and internet connection. This has led to a new breed of location-independent workers known as digital nomads.
Digital nomads utilize technology to work remotely from any point on the map, on their terms. They typically rely on laptops, smartphones, and other mobile devices to stay connected and communicate with clients and colleagues. They are often freelancers, entrepreneurs, or virtual workers of companies that allow flexible arrangements. If you belong to this demographic, how can you make this roaming professional vibe work for you as you protect your financial position?
Money-savvy hacks for digital nomads
Take a look at these tips that will not only help secure your savings but also enable you to grow your skill equity.
1. Have a financial plan.
If you are just starting out as a digital nomad, you want to make sure that you have a solid financial plan from the get-go. This involves creating a budget that will help you keep track of your finances down to the last cent. Include variable costs like travel expenses, meals out, activity fees, etc., as these can add up quickly. Without proper monitoring, your expenses can quickly spiral out of control.
Also, do not forget “operational add-ons” such as insurance premiums that are sure to come up. By applying the necessary diligence, you will always be assured that you have got enough to support the kind of digital nomad lifestyle you are set on achieving.
2. Be strategic about where you spend your money.
Digital nomads can leverage the variations in currency exchange rates to their benefit. They should aim to earn their income in a strong currency, like the US dollar, the Euro, or the British pound, and spend it in a country with a lower cost of living, such as Southeast Asia or South America. This way, you can stretch your earnings further and enjoy a higher standard of living than you would if you were to dish out your money in more expensive regions or territories. For example, get the most out of your money by earning in dollars as a digital marketer working for a US firm while indulging in affordable living in Vietnam.
It may be wise to keep your earnings in a stable currency like the USD, especially if you are working in a country with regularly fluctuating inflation rates. Even if you are not a US resident, you can open a USD digital nomad bank account in a secure, licensed bank like Xapo Bank. Here, you may also opt to store it as bitcoin, the currency of the future.
3. Save up for emergencies.
Unfortunately, even with careful planning, emergencies do happen. Therefore, it is essential to have a safety net to offset unexpected expenses such as medical bills, lost luggage, or flight cancellations.
Reserve a small portion of your income each month into a contingency fund. Aim to save at least six to nine months' worth of living expenses. So if anything goes wrong (like missing flights or serious illness), you will have enough to tide you over until things return to normal. Also, consider taking out travel insurance to take care of any potential hospitalization costs during trips abroad.
A sturdy emergency plan should also include having a bank account for digital nomads to rely on for quick withdrawals. For instance, Xapo Bank, with leading digital nomad banking services, offers an easy-access bitcoin wallet linked to your Xapo bank account, ensuring immediate availability of funds that you can spend both in dollars or crypto.
4. Plan for retirement.
Even if retirement seems far away, it is never too early to start planning. But as a digital nomad, you may not have easy access to traditional retirement savings options, such as a pension plan. Therefore, you may want to consider alternative retirement savings options. Note, though, that these are not entirely fail-safe options. If the market takes a downturn and inflation significantly goes up, it can erode the purchasing power of your post-employment savings.
One robust way to protect your nest egg's security is by holding it in a reliable and safe bank, that is also able to support your digital nomad lifestyle. Xapo Bank, for example, is licensed in one of the world’s most trusted financial jurisdictions – Gibraltar. US dollar deposits are protected by the Gibraltar Deposit Guarantee Scheme up to the US dollar equivalent of €100,000 EUR.
Additionally, Xapo Bank's account managers constantly monitor their clients' accounts, transactions, and performance. As a result, they can proactively offer sound advice and help bolster the security of your life savings.
5. Leverage technology.
Technology has made managing finances much easier, with apps that give digital nomads access to their money from anywhere. Thus, keeping tabs on spending has become much simpler and more convenient. Plus, many banks now offer additional digital services such as contactless payments, currency exchange, expense tracking, and crypto management.
All these tools make staying on top of money matters much less stressful than previously thought possible.
Enjoy secure and seamless international transfer of funds with multiple options offered by Xapo Bank, including sending and receiving GBP via Faster Payments to and from banks in the U.K. and participating territories from your Xapo Bank US dollar account. You can also send and receive USDC to and from your Xapo Bank US dollar account, and received USDC are instantly converted to US dollars using a 1:1 conversation rate. Through Xapo Bank, not only can you score hassle-free transactions as a sole proprietor or small business owner, but you can also have priceless peace of mind.
6. Buck up with digital nomad debit cards.
Debit cards are indispensable for digital nomads, as they provide a convenient way to make purchases, access money, and manage finances. But just like with traditional banking, the high fees for foreign transactions, ATM withdrawals, and currency exchange can quickly eat into your travel budget. So look for digital nomad debit cards with minimal or zero cost for these services.
Or you can apply to join Xapo Bank , which entitles you to a free* and exclusive metal debit card that you can use for transacting with your international business partners or colleagues.
The Xapo Bank debit card also comes with exciting benefits, such as cashback of up to 1.1% of your purchases, free FX conversions for multi-currency transactions, and instant notifications on card activities.
Once you have bagged your cards and are on the move, notify your bank of your travel plans. This critical step will help prevent your card from being blocked due to suspicious activity.
7. Choose the right bank for your digital nomad banking needs.
While there are many international banks for online entrepreneurs, some are better suited to the needs of digital nomads than others. So how do you find "the one?"
Consider these factors when making your choice:
- Accessibility: Does it allow you to quickly access your accounts from anywhere in the world?
- Transaction fees: Does it charge low or reasonable fees for international transactions, ATM withdrawals, and foreign currency exchange?
- Currency options: Is it a bank that receives and allows you to transfer funds in different currencies?
- Security: Is its security robust enough to protect your accounts from sophisticated cyber-attacks?
- Customer service: Does it offer excellent customer service with competent and responsive agents?
- Trustworthiness: How reliable is it as a digital nomad banking facility?
- Additional services: Do they provide other services, such as mobile cryptocurrency wallets, digital nomad debit cards, investment accounts, or business banking options, that may be useful to you as a digital nomad?
Set yourself up for digital nomad success with Xapo Bank
You have come this far to turn your digital nomad dreams into reality. Clearly, you do not compromise, and neither does Xapo Bank, which has compelling propositions that just might make it one of the best international banks for digital nomads if a ranking were done.
Xapo Bank ticks off all the must-haves of the ideal international bank—and more—to empower your digital nomad lifestyle wherever your feet may take you.
Another advantage of having an account at Xapo Bank is that it is physically based in Gibraltar, one of the most financially trustworthy jurisdictions in the world covered by U.K. standards of law and protection of property rights.
We never stop looking for ways to ensure that our members continue earning sustainable returns on their deposits. Our members earn an interest rate of 4.6% per annum on US dollar deposits and 0.20% on Bitcoin. (Note that these annual interest rates are variable and may change anytime).
Interested in protecting and growing your hard-earned money the secure, reliable, and convenient way?
*We reserve the right to introduce a charge for the Xapo Bank metal card or any replacement of it at any time without notice.
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