The digital nomad lifestyle is gaining popularity among professionals. With remote work opening the doors to a style of working from anywhere, it is not just professionals in tech, content creation, marketing, or consulting that have chosen to work out of co-working spaces in Bali instead of boardrooms in Bengaluru. The lifestyle is not just about changing your location; it’s about adopting an entirely new way of life with a focus on flexibility, autonomy, and experiencing the world.
However, while the idea of traveling to all of these exotic places and working is very enticing, there might be some financial obstacles in the way. Figuring out how to record and manage income in different currencies, complying with international and Indian tax obligations, budgeting for various living costs, and arranging health or travel insurance – all of these require careful deliberation. For digital nomads, developing a flexible and mobile-friendly financial system is necessary to maintain their nomadic lifestyle in the coming months or years.
Here’s a practical guide to help you stay financially sound while living your nomadic dream.
#1. Get the Right Account and Cards
If you are on the move for the majority of the year, then consider avoiding traditional savings accounts. If you are classed as an NRI, look into opening NRE (Non-Resident External) accounts or NRO (Non-Resident Ordinary) accounts, as these accounts will make it much easier to maintain and manage foreign earnings and income occurring in India. Also, look for accounts that offer cards with minimal or no foreign exchange fees. Fintech services like Niyo Global, Wise, or Revolut have become increasingly popular among Indian nomads, often due to their more favourable exchange rates and, more importantly, their app-based global access.
#2 Be Currency-Conscious and Cost-Conscious
As you travel, you will encounter different currencies and varying costs of living. The advice is to almost always pay in the local currency. Purchasing in your home currency can come at a cost that converts a great price to a bad price. You can track exchange rates and trends using apps like XE or Google Finance. As you build your flexible monthly budget, be aware you could see variability. It is also at your discretion to manage any additional unplanned expenses, such as visa runs, lost luggage costs, medical costs, etc. So, build a financial buffer…
#3. Be Aware of Taxes as a Digital Nomad
Earning income or living outside of the country can create complexity when it comes to taxes. So if you live outside of India for more than 182 days during any financial year, your residency status can switch to NRI, and your income tax may be calculated differently. Additionally, if you were to earn income from clients or business in India, you would still be liable to pay taxes in India.
Always keep in mind that even with a DTAA (Double Taxation Avoidance Agreement) signed with another country, there is still a possibility of being taxed on the same income in two different jurisdictions. A DTAA is an agreement made to avoid being taxed in two different countries when receiving income. As well, residency rules can be different based on where you are living and the duration of stay. With all of the predictions and uncertainty, it is a good idea to consult a tax advisor that can help you understand both the Indian as well as the international tax rules when planning your income as a nomad.
#4. Get Insurance That Travels With You
When you are leading a borderless life, your coverage should not have borders either. Since most health insurance policies have voided coverage once you are outside the country – you may be on the hook to pay yourself for a medical emergency if you need one abroad. Therefore, it is crucial to purchase long-term international health insurance or robust travel insurance that caters to digital nomads.
Providers in India such as SafetyWing, Allianz, and World Nomads offer plans that include hospitalization, outpatient care, emergency evacuation. And since your devices are your workspace, you would also want to get separate coverage for your laptop, phone, and other devices, just as you do for your health.
#5. Continue to Build Your Wealth—No Matter Where You are
Your trip around the world should not put a pause on your financial freedom journey. It’s a crucial time, and while you are living abroad, it’s essential to stay on track with your investment goals. If you are still a resident of India, you can continue to invest in SIPs and stocks through various Indian investment platforms, such as Groww, Zerodha and many other platforms.
If you change your residency status to NRI, ensure that your investments are made through your NRE and/or NRO accounts, and you will be eligible. Suppose you are looking to invest outside your country. In that case, you can also utilize global platforms like Vested or Interactive Brokers to invest in International markets, such as the US, stocks, and ETFs. So whether you are in Bali or Berlin, your money should work for you.
#6. Digitise and Simplify Your Financial Life
As a digital nomad, you will have a lot going on across borders and requiring you to stay on top of your finances. Digital should help simplify that for you. Consider using Notion or Google Sheets to create a master dashboard for real-time tracking of your income, expenses, currency swaps, and savings goals.
If you use a budgeting app like YNAB and a money manager app, such as Money Manager, it will help keep you disciplined in your daily spending across multiple currencies. Always have a VPN in place to access your bank accounts or file your taxes from various remote locations safely. Once your financial life is simplified and organized, you can immerse yourself in your travels, allowing you to be present in your locations and not worry about paperwork.
#7. Know the Visa Regulation Before You Get Settled
Each country has its visa regulations and not every country recognizes remote work under a tourist visa. Working on the wrong visa unintentionally can have a severe impact on you. Finances, visa cancellation, and deportation are all possible consequences. Therefore, be sure to research what your host country allows for visas before arriving onsite.
Many destinations now offer Digital Nomad Visas, specifically designed for remote workers, which legally allow you to live and work for an extended time. When demonstrating your residency for banking or immigration purposes, ensure you have both digital and physical copies of your important documents (such as your passport, visa, and proof of income) readily available. If you stay informed and compliant, you can worry less while traveling.
Adopting the digital nomad way of life certainly has its amazing opportunities for freedom and growth, but it also requires some serious financial planning. With ongoing learning, the proper tools, and your strategic ability to adapt to unique circumstances, you will be able to successfully manage your money, no matter where you are on in the world, and find real success in your global career.
