Digital Nomad Debt

My Best Advice for Every Newbie Digital Nomad Before They Get Whisked Away

Travel the world. Work from anywhere. Never go into the office again.

Unconventional living, being free from any single location, is the 21st-century dream. I know because all of my friends and random people who encounter me tell me so. But hey, aspiring nomad, you think it’s as simple as deciding to jump out of bed one day, cram whatever you can into a cumbersome backpacking bag (I hate those), and take off for Europe or Asia or wherever?

You can do it that way. Or you can be smart about it.

If you want to make this lifestyle sustainable for longer than half a year, there’s one — well, actually, a handful of things, but this one is super important to consider before many others — thing you should not just quietly tuck away under your rug and tell yourself that you’ll “deal with later”:

Your debt.

Do you have any? You probably do (if not, good for you!). It would be a mistake to try to go about this life with so much financial baggage (emotional is fine).

Debt includes outstanding credit card balances, student loans, business loans, a mortgage, and anything else that you are obligated to toil over and bleed for. Before you triumphantly take off on a jet plane, get rid of your debt first. Seriously.

OK, I’m not your mom and I don’t want to be, but I’m saying this because most people are just terrible with money. CNN Money reported earlier in 2017 that the majority of Americans can barely cover a surprise $500 or $1,000 expense. If you suddenly had to pony up $500, could you comfortably do it? I don’t claim to know the personal circumstances of anyone who would have trouble shelling out $500 if they had to, but that does seem to suggest a lack of sufficient savings and little control over where their money goes.

So if money management isn’t your strong suit back home, just imagine how quickly you’ll burn through money when you travel. Sure, there are ways to travel on a budget, such as with the resources on Nomadic Matt’s website, but the nice thing about the 21st century? There are ways to make money online. I do it as a freelance journalist, consultant, and “solopreneur.”

Anywhey, I don’t think you need to be a penny hoarder or be capable of eating salads and sandwiches made of 100-dollar bills to sustain this life, but you do need to be pragmatic and not have Disney fairy tale thoughts of “This will all work out somehow!”. This means:

  • Having or creating your own access to steady revenue
  • Smartly managing your budget (because travel has a way of loosening up your purse strings)
  • Minimizing financial obligations elsewhere (including bills and debt!)

Part of the reason I’ve been able to do this for a couple of years now — with a healthy savings account and IRA, to boot — is that I had already paid off my debt. Car? Bought it used. Credit cards? I use only what I know I can confidently pay off the next payment cycle or two. School loans? Shunted all of my money from my first years of being a corporate cog toward my loans and savings. My parents had hammered into me the importance of paying down loans and you never not listen to Asian parents. The reality also was that I had delayed gratification.

I didn’t spend a lot. I didn’t go out a ton. I didn’t pop $2,000 bottles at the club. I didn’t take lavash vacations. Admittedly, I simply didn’t know how and my mindset about money was a lot different back then. I could’ve chosen to put my life on pause and depend on “future me” (the poor sod) to deal with the collateral damage later. But my unintentional stoicism paid off.

Whatever your debt is, you don’t want to have it looming over you and use “traveling the world to find your passion” as a silly and short-lived excuse to escape it.

Getting rid of student loans, for instance, is already hard enough. Prancing along the beaches of Maui or the countryside vineyards of Nice and wishing the debt would magically go away just make it that much harder. Then there’s interest to consider. Whoa, Nelly, it can be a doozy. You’d be in a much better position financially if you make bigger monthly payments to minimize the interest as much as possible, as quickly as possible. Over the long term, that’s thousands of dollars saved if you have to pay for loans of $20,000 and more.

So before you do this, spend a year at least aggressively paying down your debt. It’s the sensible and adult thing to do.

To learn the best ways to get rid of debt and other savvy personal finance stuff (which, hey, still applies to people who travel), I highly recommend you check out personal finance expert Ramit Sethi, my buddy and fellow Lifehacker writer Kristin Wong, and Mr. Money Mustache. All of these people preach very, very smart, no-B.S. matters on living the best and richest life you can (without actually needing to be rich, in the traditional sense).

Paying off your loan before you screw around on planet Earth is basically me encouraging you to “front-load” the work. That is, do all of the difficult crap in the very beginning. When you front-load taking care of your loans and automating important things before you leave, you’ll have less of a stressful, hot mess of a life to deal with when you eventually “return.”

And you’ll be glad.

If you found this article helpful, check out all 27 answers to questions I regularly get about living this Unconventional Nomad Life, smarter and better — all in a convenient PDF. Just enter your email in the box below. You’ll join my email newsletter where we’ll all do the Harlem Shake and you’ll get inspiration and practical ideas on creating a life you don’t need to vacation from. Sound good? Good.

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