Becoming A Digital Nomad: How Much Money Do You Need?

Being able to travel wherever you want, whenever you want while working with something you love – probably sounds like the dream life to most people. But it also may seem like a far-fetched dream scenario that’s incredibly hard to realize. A lot of people think you have to be incredibly rich and successful to be able to live this kind of lifestyle, and that traveling is an expensive lifestyle. But how much money do you really need? It’s probably way less than you think. Here are my thoughts on money needed, after traveling as a digital nomad across 4 continents during the past two years.

Cheaper Locations

How much money you need to live, depends on where you go. But if you start out in a place with cheaper costs of living, like Thailand, Vietnam, Malaysia etc, you can get started extremely cheap. In fact, $500 per month would be enough in a lot of places. Let’s take Thailand as an example. If you go to Chiang Mai, which is a thriving hub for digital nomads these days, even labeled the digital nomad capital of the world – you can achieve a comfortable living for a very decent price. Accommodation can be found from $200 a month and meals can be found anywhere for around $1. In addition, there are plenty of things to do, places to hang out with digital nomads, and wonderful things to see and explore.

My little beach office in Koh Lanta – where I stayed for only $7 per night.The same goes for more tropical islands in the south of Thailand. I was staying in beautiful bungalows on the beach for $7 a night, and while the prices for food etc is a little bit more expensive than in the north (like Chiang Mai), I figured out it was possible to live on about$500 a month there as well. 500 dollars, to live on a beautiful tropical island with crystal blue water and white beaches. The same amount of money will also easily get you just as much or even more in the surrounding countries as well, like Malaysia, Vietnam, and Cambodia.

More Expensive Locations

That said, as soon as you head into for example Europe, and travel to cities like Berlin, Prague, Paris, Barcelona and so on, the cost of living quickly goes up a bit. However, I’ve found a good estimate for a monthly living to be around $1000 to $2000 if you want a pretty comfortable living with your own place and not just hostels – though it can be achieved for both less and more. That said, this really varies from country to country and city to city – and depends mostly on the standard of living you’re after.

Working in the Hollywood Hills, Los AngelesI personally recommend to start out as a digital nomad in a place like Thailand and Bali, where opportunities are plentiful, the digital nomad community is vibrant, and the cost of living is extremely comfortable. Let’s take the monthly living budget of $500 and break it down a bit, comparing it to western living.

A Breakdown Of Money Needed

First of all, $500 a month equals a yearly $6000 sum. To compare, the median US wage is about $26,000 per person, and the federal minimum wage of $7.25 equals a full-time yearly salary of about $15,000. Also, the US poverty threshold for a single person was about $12,000 in 2012.In other words, to be able to live as a digital nomad on a tropical island in Thailand, or in a city like Chiang Mai, you only need half of the US poverty threshold or four times less than the US median wage. Now that suddenly doesn’t sound all too bad. It’s sometimes hard to believe that living on a tropical island, working from your laptop by the oceanfront can be acquired for what would be regarded poverty in lots of western countries. Let’s look at it a bit further.500 dollars a month equals a daily average income of $17 after tax. That equals about 2 hours and 20 minutes a day if you’re working at a minimum wage job. If you’re working 8 hour days on the other hand, $17 daily equals earning about $2.13per hour of work. Again, this sounds pretty doable, right?Even if you aspire to earn $1000 a month, that equals about $24per day, or $4.25 per hour in an 8-hour workday. $1000 per month, equals $12,000 a year – which again is pretty much the poverty threshold in the US. If you want to be able to travel to more expensive destinations, where costs of living can equal $2000per month, that again is$24,000per year – which still is less than the US median wage of about $26k.

Beautiful “office” view in Thailand

Summary

In other words, the digital nomad lifestyle can be acquired much cheaper than most people think. If you aspire to become a digital nomad, I just want you to keep in mind that it can be MUCH more doable than what most people (who’s usually never done it before) will tell you it is.Working from tropical beaches and hip cafes around the world is definitely not something reserved for the ultra rich only. Whether you are a designer, web developer, consultant or entrepreneur; as long as you have a business that generates from 500-2000 dollars a month, I’d say you’re pretty much free to start exploring the world!