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Watching the sunset on the coast of Ecuador. Playing on the beach in Mexico. Drinking sangria in a Spanish cafe.
If reading any of those statements made you feel excited, chances are good that you have the travel bug. But if you’re in debt, extended travel to places like that may seem out of reach.
But that doesn’t have to be so.
The countries named in the opening of this post happen to be some of the least expensive countries to live in in the world. They also happen to be home to a special breed of expat, affectionately known as the digital nomad.
What are Digital Nomads?
If you’re not familiar with the digital nomad, it’s a person who technically has a home country of residence – say Germany or the U.S. – but who has structured his/ her working life so that all of his/ her income comes from online sources. This source of income and low-cost lifestyle allows the digital nomad to live anywhere in the world, provided that he/ she can find an outlet for a computer and Internet access.
It’s important to note as well that while many digital nomads do, indeed, travel to far-off lands. However, just as many have been known the take to their tricked out vans or campers and drive cross country, all while calling their van or camper home. The important thing to note about digital nomads regardless of where their travels take them is that their home can, though not always, changes constantly and that their income is derived from working online in some capacity.
What’s This Got to do With Being Debt-Free?
According to Listen Money Matters, you shouldn’t be paying more than 30% of your income for housing. However, as the site points out, many people pay much more for housing than that – up to 50%.
But as most people who are in debt know, one of the quickest way to get out of debt is to live as cheaply as possible. This includes finding a much cheaper place to rent. While this could include moving into a cheaper apartment or finding a roommate, it could also include just moving to a much cheaper place to live.
However, part of the reason why so many people feel reluctant to move to a completely different town is because they are tied to a job where they are. This is where digital nomads get it right, though that’s often not the reason they’ve decided to hit the road: They just like traveling. But often the places they travel to have a significantly lower cost of living than their current place of residence.
So What Does This Look Like for the Budget-Minded?
Here are some comparisons. Take a look at Cuenca, Ecuador, a popular destination for retirees and digital nomads alike. According to Numbeo, it costs a family of four a total of $2,039.74 to live in Cuenca, and that includes rent on a three-bedroom apartment, which costs $561.25 a month. The rest of the costs include items like groceries, childcare, clothing, and entertainment.
The cost of living in Cuenca is 63.04% lower than it is in New York. However, living in Cuenca is cheaper than even living in a more “normal” city in the U.S., like Boise, Idaho. Living in Boise costs 39.98% less than living in New York. However, it still costs a family of four living in a three-bedroom house in Boise $4,200 to live. A move from a normal city like Boise to a lower cost city like Cuenca can save a family $2,160.26.
And it’s even cheaper to live in a place like Cuenca if you’re single. It costs about $1,800 a month, including rent, utilities, restaurant trips, etc. to live in this Ecuadorian city if you’re by yourself.
Some places are even cheaper to live in than Cuenca. That’s why so many people choose to be expats in these places. With the proliferation of the Internet in even the far corners of the earth, living the digital nomad lifestyle is easier than ever.
Ways to Make Money as a Digital Nomad
So, let’s assume that you’ve decided that being a digital nomad will allow you to reduce your debt in a significant way. You may now wonder how digital nomads make a living while living someplace else. Here’s a partial list of things you could do to make a living as a digital nomad:
- Freelance writing, illustration, and design
- Marketing and accounting
- Admin and customer support
You can also do affiliate marketing, which is where you join a site like Amazon, which offers affiliate accounts. Once you become an affiliate, you can help the site market its product and get a commission for anything that sells because of your efforts.
Doing social media marketing and blogging for clients can also make you money, as can creating online courses on sites like Udemy.
The jobs above represent just a small sample of the types of jobs you can do while traveling. Sites like Indeed.com can also connect you with virtual jobs. When you go to sort through the jobs, be sure to click on the “remote” option. That should net you a list of possible gigs you can do online.
Setting up your life as a digital nomad can take time. It requires you to get some gigs in place before you take off to your destination of choice. You’ll want to start looking for extra ways to make money online before you go on the road. Start doing freelance work or contract work at least six months to a year before you embark. This helps you get used to working for yourself and allows you to put some money aside for the first months you’ll be gone. You’ll also want to look into being a long-term resident in a country if you choose to stay put for a while.
Additionally, it’s best to visit with an accountant about doing your taxes. This money professional can talk to you about paying taxes correctly, without overpaying.
As you can see, becoming a digital nomad can offer you a way to get out of debt AND a way to travel if you set up shop in a cheap place. All you need is a computer and Internet access, plus your destination of choice to get started.