You’re on Cloud 9 with all of these stories about people who quit their job to pursue a life of entrepreneurship while traveling the world. Becoming a digital nomad – leveraging working online so you can freely travel the world – is something you aspire to do. But… can you realistically do it? When? How soon? Are you financially prepared to quit your job?
There are horror stories about people who quit their job with no idea what to do to bring in income. They move abroad and, with no idea how they’ll make money, they run their savings dry.
Don’t be one of those people.
Want to estimate how much you’ll need to last three, six, or twelve months abroad? There are three simple steps you can take to financially prepare to quit your job.
Click here to get access my free Digital Nomad Financial Planner from my Exclusive Content Library for Digital Nomads.
Otherwise, keep reading for steps you need to take to evaluate whether or not you’re ready to quit your job.
But, before we get started… just so you know: I don’t have all the answers.
And, I don’t know everything.
But based on my own journey of financially preparing to quit my job, these are the steps I recommend to start your journey.
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1. Calculate your expenses.
First of all, you need to figure out what expenses you’ll have from month to month. If you’ll be traveling as a digital nomad, factor in estimated costs of traveling from place to place, and of course visas.
Here are some expenses you can plan for:
- Fun (going out, excursions)
- Business Costs (taxes, monthly business expenses, cell phone, etc.)
- Travel (flights & visas)
- Transportation (ubers, taxis, scooter rentals, etc.)
- Other (debt, unexpected costs, etc)
Even though everything might seem clear-cut, we’re going to go into these expenses for digital nomads a little more in-depth.
Lodging & Accommodation
If you’re doing it the digital nomad way, you have many options:
- Book a long term Airbnb. Oftentimes, you can book a long-term Airbnb and get discounts the longer you stay in one – weekly, monthly, etc. Airbnb owners make more when you stay in their accommodation for a longer amount of time, as opposed to needing to fill in the brief empty periods. Click here to use my link to sign up for Airbnb, and receive a $40 travel credit that never expires.
- Housesit with Trusted Housesitters. Housesitting as a digital entrepreneur bears a huge benefit to both parties. You’ll be working from your laptop. So basically you’re able to watch a person’s pets and home while you work. And in return you get practically free accommodation. The membership cost is $119 for one year, which would really pay for itself with one week of housesitting… and the benefit just multiples with every housesit you get. Click here to sign up for Trusted Housesitters.
- Stay in a hotel, and then find an apartment. Alternatively, you can book a hotel for a few nights or a week and then go apartment hunting once you get to your destination. We normally use Booking.com to search for and look for nice hotels in an area.
- Volunteer via Workaway in exchange for accommodations. You can also exchange a few hours of your day of work for free accommodations. Workaway partners travelers with people looking for different kinds of help around the world – babysitting, teaching yoga or English, web design, etc. It’s only $32 for an annual membership ($42 if you’re traveling as a couple), and well worth every penny even if you only use it once or twice.
The 3 Fs (Food, Fun, Fitness)
Always leave room in your budget for food, fun and fitness.
For us, fun things are like booking excursions or tours (like a guided pub crawl or guided mountain tour). When it comes to fitness, maybe a gym membership is important to you, or you want to leave room in your budget to take yoga classes throughout the month.
Whether or not you’ll be running your own business, budget for any work-related expenses you’ll accrue on the road.
- Coworking spaces or coffees at cafes
- Books, courses, or even business coaching
- Advertising and marketing costs
- Taxes (if self-employed, set aside 20-30% for taxes)
- Technology upgrades
Think about what you will need to work while you travel.
Travel and Transportation
Whether you’re going to be a digital nomad, or you’re staying in one location, you still need to think about travel and/or transportation costs.
- How are you going to get around? (Uber, Lyft, public transportation, vehicle, scooter rental, gas)
- What will the monthly cost be?
For us, we have to think about flight costs (if any), the cost of any visa extensions if we want to stay in a country for an extended period of time, the ride to/from the airport, and of course how we’re going to get around every month.
If you have insurance through an employer who provides benefits and allows you to work remotely, you can probably skip this step.
Otherwise, you should think about the cost of dental/vision insurance, health insurance, and maybe even travel insurance as you start traveling the world managing your own business.
Other (debt, monthly payments, annual payments, unexpected expenses)
Then think of other costs, and allocate money for that.
- Student Loan or Credit Card debt – what are the monthly payments for these?
- Annual or monthly payments – like car registration, Amazon Prime membership, and those other subscriptions you have
- Unexpected expenses – maybe you have to go to the hospital, or you have to buy something while on the road. Always prepare for the unexpected.
It’s just wise to be as prepared as possible, especially financially, if you’re about to pick up and travel the world. Think about the year ahead, and any possible expenses that could come up. By thinking ahead like this, you won’t be surprised and fishing for $100 when it comes time to renew your Amazon Prime subscription.
Savings & Your 401k
Lastly – it’s so important to continue saving. Skip that coffee if you have to. And even if it’s a small amount, contribute to your 401k.Contribute to your 401k even as you grow a business. Click To Tweet
When all else fails, it’s important you have an emergency cushion to fall back on.
- Don’t steal from your future by withdrawing from your 401k. Contribute when possible, as much as possible.
- But at the same time, save enough to fall back on when emergencies come up.
Allocate a certain amount to be set aside each month – divide that (however you wish) between your savings account and your 401k.
2. Determine how much you’ll need to save.
After you figure out your expenses, determine how much you will need to save to start chasing your dreams and living abroad.
Some costs you’ll need to factor in:
- The cost of flights to and from a location,
- The cost of a passport (if you need one, and if you don’t have one),
- Any costs of visas, or visa extensions, while you travel.
Honestly, this amount is different for everyone. Some people have families, or maybe even mortgages, to pay. I am still pursuing the debt-free life and paying off my student loans.
So, do you save for a month? Three months? Six months?
If you do not have a guarantee of full-time income, save for three months of expenses at the absolute least. And if you have a family, of course you should save for at least six months of expenses.
No one can really tell you how much you need to save except yourself.
But to help you out, you can use my Digital Nomad Financial Planner. Once you get access to my content library, open up the financial planner! Then you can enter your estimated expenses for up to a year. And play around with your projected income each month so you can estimate how many months you can support yourself until your incomes matches (actually, exceeds) your estimated monthly expenses.
3. Start your side hustle. Or find a remote job.
Don’t quit your job unless you are beginning to have a steady source of income from your side hustle.
Some people can do it: quit their job, live off their savings, and start making everything work for them. Maybe you’re one of them.
But to veer on the safe side, prove to yourself you can make a consistent monthly income before you quit your job.
At the same time, don’t watch yourself succeed at your side hustle, only to prevent yourself from taking the leap to pursue it full-time.
Find that sweet spot.
This is how I started my path to blogpreneurship:
- I started a lifestyle and travel blog (which eventually evolved into a lifestyle blog for soul searchers who want to become digital nomads).
- I started making money from my blog and services I offered on my blog. Click here to visit RerouteLifestyle.com, a blog I run with my boyfriend that talks about how we make money blogging.
- I saved as much as freaking possible, all the while working on my blog on the side.
- After a few months, I had enough money set aside to comfortably quit my job in order to commit to my business full-time.
If you plan to work remotely for a company, that might be enough of a structured environment you need to be productive. But if you’re trying to build a business – being able to work on your side hustle after work proves whether or not you have the work ethic it takes to build a business.Working on your side hustle after your 9-5 proves if you have the work ethic to build a biz. Click To Tweet
So either: start working on your side hustle and prove to yourself it’s profitable before you take the risk of quitting your job; or, find a job where you can work remotely.
Click here for my list of 15 ways to make money online… including a list of websites to find remote jobs.
It’s okay to be scared.
Becoming a digital nomad goes against everything we’re taught about growing up. Because we’re taught to go to university, start a career, and settle down.
So going against that is scary.
But, my fellow soul searchers, it’s okay to be scared and feel afraid. You’re not alone, and you can do this.
Today is my last day at my day job. I’ve spent the past few weeks both totally scared of this huge life change…and also preparing as much as I can for it. Yesterday, I landed my very first blog design client. Even though I’m not near where I want to be, I’m working towards it.
Success doesn’t come to those patient enough to wait. It comes to those who work hard for it.Success doesn't come to those patient enough to wait. It comes to those who work hard for it. Click To Tweet
If my dreams can come true, so can yours. Just know that you have to put in the work to make it happen.
If you haven’t started your blog yet, or you want to take your blog to the next level and go self-hosted, click here for a step-by-step tutorial with an incredible deal on website hosting.
Are you preparing to quit your job? What do you want to do for income, and how do you plan to get there?