How to budget when living as a digital nomad in a foreign country

By: Sinead Mulhern on May 29, 2018

Last November, I nervously bought a one-way plane ticket from Toronto to Colombia. I had been plotting my departure to Medellin (Colombia's second largest city) for months — though I had been ready to call my bluff for just as long. By purchasing the flight, I completed the first step in my plan to travel while working remotely for a year. I saved for the better part of 12 months for the trip, spending most of that time freelance writing and trying to establish a client base to fund my adventures in South America.

I'm two and a half months in and I’ve become yet another laptop-toting twenty-something seeking both a strong Wi-Fi connection and rich travel experiences. Yes, I’ve taken a pay-cut by trading an office for an apartment in the Andes, but at the same time, through budgeting and writing in a low-cost country, I’ve managed to barely touch the dough I set aside for this endeavor.

I work less and spend less, but I enjoy my time a lot more. Below is a snapshot of how I’ve managed to keep my bank balance under control while doing this.

Forget Uber, get to know the transit system

Learn the bus routes and subway systems of your newfound city shortly after arriving. Taxis and Uber fares may be cheaper abroad than at home, but they’ll never be more cost-effective than public transit. Relying on Uber might be easiest, especially when you’re in a new and confusing place, but having knowledge of the metro system grants the freedom to navigate foreign territory at the lowest possible cost. Full disclosure: I got lost the first time I took a city bus alone in Colombia. Though frustrating, I realize that sticking with public transit has saved me a lot.

Ditch the plastic

Paying with cash instead of cards is a common personal finance tip. It’s also one that works. In places like the U.S. and Canada, swiping plastic can easily become a habit — one that enables your credit card bill to sneakily add up. In many parts of Latin America (including Colombia), paying with cards is often not an option. Living in Colombia, I’ve learned that since cash is the norm, I better know what’s in my wallet. Relying on physical money means thinking more critically about purchases rather than lackadaisically handing over my AMEX. The result? I avoid pricey menu items and whim purchases at grocery stores and cafes. Sometimes, that’s simply because I don’t have enough with me. Overall, I’d say I better recognize the value of my dollars and pesos.   

Avoid money traps

When travelling, some may see you as a cash cow and let’s face it: they’re right. Having the option to globetrot in the first place is an indicator of a certain level of wealth. As such, travellers are going to see certain luxuries offered at the gringo rate. I avoid those. I live on the edge of the city far from the tourist hubs and pay $225 for my portion of rent. I also avoided group Spanish classes that seemed more like a cash grab than a quality learning experience and went instead with a private instructor whose rates aren’t low, but are worth the cost. When hitting the road to visit some of Colombia’s prettiest attractions, my friends and I avoided glitzy accommodations, instead favouring hostels and our own farmhouse cabin. Steering clear of money traps isn’t so hard… you just have to think outside the box. Yeah, it can be tempting to go to a lower-cost part of the world and live like a queen, but don’t shell out just because you can.

Pack high-quality clothing

Seriously research your packing list. Know which key items you’ll need and bring your most durable options. Recognize that investing in and bringing high-quality gear means not having to replace it. Plus, there’s nothing more annoying than having to pay big bucks for something you already own just because you forgot it at home. I brought a lot of technical fabrics from trustworthy brands. While designed for sports, these clothes easily double as daywear and won’t wear out quickly.  

Simplify your lifestyle… even if it hurts

When living abroad, certain elements of your former lifestyle are going to have to go. I’m not the girl who would gladly downsize her closet, but now my wardrobe is a fraction of what it once was. And since clothes here don’t come cheap (many items are either pricey local designs or come from international, imported brands) I can forget about shopping sprees. To avoid breaking the bank, I resist the temptation to wander into trendy stores… even if I tell myself it’s just to browse. Forcing myself to rethink my style choices kind of kills me but hey, sometimes, something’s got to give. If I do buy something, I’m much pickier than I used to be. The extra cute boutiques my former self would have loved are off limits. Even if it’s my birthday. Even if it’s payday. When you better value your money, you quickly learn how to better prioritize and cutting out the less important things actually isn’t so hard.

Take advantage of free outdoor entertainment

Going for a picnic with friends costs next to nothing. Venturing onto trails for a full-day hike is free, as is going to the beach. When far away from home, taking in new scenery is one of the biggest luxuries. Most of the time, there’s a way to explore in nature without spending a dime. For me, an afternoon hike in the mountains also leads to a more satisfying day than booking a group tour or drinking pricey cocktails in the city. Don’t get me wrong, I love to party. But when I do, I feel less guilty because of this lifestyle.

Break up with your favourite foods from home

I’ll admit that I’ve made some really pricey decisions in the grocery store that I regretted immediately afterward. Moving to Colombia has meant that I’ve had to end my love affair with fancy cheeses because they’re harder to find and much more expensive. In a moment of post- cheese breakup weakness though, I bought a package of assorted artisanal cheese slices imported from Spain with a pricey salami to go with them. I didn’t even bother to check the price tag of either. That cheese and cracker snack fit for a duchess cost me the same amount as one night I spent recently in the countryside. Yeah. Dumb.

My recommendation? Just eat what the locals do. And if splurging, at least know what it’s going to cost.