The first part of my digital nomad retirement segment was all about getting that passive income. This part is all about saving all that passive income you’re making. It’s a common habit for most of us to spend what we have. If you make more money, you may get more things or upgrade to a nice place to live. This isn’t going to help you with that retirement fund we’re talking about.
Keeping expenses in check is of course really important but when you’re a digital nomad, you tend not to emotionally over purchase. Your life is full in the sense that you got out from under the man’s repressive hand. I think that’s where most people spend big. A new Coach bag or BMW sports car on monthly payments will make you feel better about your sad, mundane life for sure. That’s a distant life story for the digital nomad, lucky you.
Still, being wise with your cash flow is part of the retirement plan of a digital nomad. Here are some methods I’ve found are useful.
#1. Break it all down.
I’m going to keep this relatively simple because a financial advisor I am not. I put 10% of my earnings away at a minimum and strive for more. When I do put money away or reinvest in my company, it gives me the same feeling as buying a Coach bag. I look at how much my current passive income is bringing in and how much I am putting away.
Every month, I am putting away two months of living retired. You do the math.
#2. Have a date with your cash flow.
Sit down weekly with your money and see if your account is growing or not. If the money isn’t growing, you’ll want to assess your budget plan again. This activity has a lot to being aware of your money situation. What are you doing that eats away at your finances. Dinners out? Like to shop?
#3. Do spend money on things that make you happy.
Let’s face it, you need stuff. If you’re a runner, you need new shoes for example. Buying something also keeps you in the feeling place of wealth which I think is essential to financial freedom. There are ways you can buy smart. If you really need something, why not buy it on eBay. I recently bought some Lululemon clothes on German eBay and they cost me about $40 CDN. At the store, I would have paid at least $200. Buy within your budget though, don’t take your eyes off the main prize.
#4. Get rid of the extras.
If you’re a digital nomad, do you really need cable? I have Netflix, it costs $6.99US per month. I may not be up to date on the Game of Thrones episodes but I’m also not paying $100 a month for that luxury. In case you haven’t forgotten, where you are right now was a choice because you’re free to go where you want as a digital nomad. Don’t get all the bells and whistles you don’t need, go explore.
#5. Daily expenses that kills.
You love your latte’s, fair enough. It really takes a chunk out of your finances to go have a latte at a coffee shop daily. Why not invest in an espresso machine at home? It will pay for itself quickly, plus you get to add in extra shots of espresso to your delight (at no extra cost). Have food in your fridge that excites you so you’ll be more prone to eating lunches at home. If you do business and incorporate coffee and lunch into your meetings, create a nice space in your home for people to visit.
#6. Work your a#$ off.
Take advantage of bringing in cash flow while you’re young and full of energy. Take on all the client work you can when it’s available. Keep on thinking up new ways of making money and roll with it. When you work really hard, you will see the rewards. Also, you don’t have time to spend money.
#7. DIY projects.
If you want to create outside garden furniture, organize your shop or have nice decor for a bare apartment, check out DIY blogs. Doing little projects on your own are rewarding and cost you much less than purchasing the latest and greatest things. You can even make gifts instead of buying them. People love the personal touch anyway. You may even find you can create your own blog about how handy you are and make extra money from it. Check you out, you’re on a roll.