This month we’ve talked about being a digital nomad, tools for being a successful digital nomad, finding a job as digital nomad, and few other odds and ends. But by this point many are wondering about making money (and banking in general) as a digital nomad. So let’s talk banking, financial transactions, and maybe a few other tidbits to boot!
Obviously working in the continental United States proves little obstacle for receiving funds for payment and then processing through the bank of your choice. In our case we are members of a small, localized credit union. However, they belong to a much larger Co-Op of credit unions so we are able to use branches and ATMs throughout the country. It is ideal for us and has been the solution over big banking that so many of us dislike. A typical transaction involves invoicing (through Hiveage), payment (through PayPal), completed invoice PDF sent to client, transfer of funds (every 2 weeks like a “payday”) from PayPal to credit union checking account, 48-business hours to process, funds available. If you are adventuring outside of the United States though things can get a bit more complicated.
If you work for US Dollars or European Euros, yet live abroad where there is a weaker currency and lower cost of living you can work fewer hours and maintain your standard of living. It is quite nice actually! Imagine a 2-bedroom apartment in Thailand for just $351/month! Of course if you choose to you can also work more hours and build up a savings. Just remember, it’s exceedingly easy to spend too much on nomadicism between airfare, hotels, etc. The trick to being a fiscally successful digital nomad is to stay in one place for a while and then move on. In a growing number of countries (including the US now that there are services like Airbnb) it’s easy to rent an apartment by the month, with furniture, kitchen facilities, and Internet.
Getting paid, paying bills (back home in the US most specifically), and getting money abroad is something you need to plan for. The first recommendation is to clear any outstanding balances or pay off any bills you can. Make sure you are set to receive all communication via Email. Work with your bank on bill pay or scheduled payments. Furthermore, open a bank account that won’t charge you a foreign transaction fee or ATM fee. They do exist. This Wallet Hub list may help. If your bank offers chip and/or PIN debit cards you should carry one. You may also want to look for an emergency credit card that is without foreign transaction fees. By far PayPal Business is the best way to handle cross-pond financial transactions though. With it you can accept credit card payments (NOTE: there is a fee) and you can get a PayPal Business debit card. Be sure to work all of this out prior to your foreign adventures though. It is almost impossible to open or close a US bank account without being in-person.
SECRET #1 – Uncle Sam WILL find you. Just because you may be a digital nomad or you are working abroad does not mean that – as an American Citizen – you won’t be responsible for filing taxes. I suggest before leaving the reach of H&R Block you do a little research on the IRS website. Depending on your state of residence you might have to file a state return as well. SECRET #2 – If you are intending to become a digital nomad for an extended amount of time you may want to explore changing your state of legal residence to one that doesn’t have an income tax!
Finances as a digital nomad can be confusing at times but completely manageable so long as you prepare in advance and stay informed of what tools are available to you.
If you want to know more about being a Digital Nomad (passports, health insurance, vaccinations, etc) please visit Tiny r(E)volution where we talk more about the subject, continue to follow Tiny House Blog for my Wednesday posts, and subscribe to our YouTube channel!