When you’re working as a digital nomad, there is a constant balance between ensuring you’re making enough money to travel and managing your expenses to be able to enjoy that travel.

It can be a precarious dance, and it becomes even riskier if you make some mistakes that jeopardize your ability to keep moving and working as you do. Many of the following tips will apply to freelancers in general, but digital nomads might be even more vulnerable. 

Not Having A Consistent Emergency Fund

Everyone should contribute towards an emergency fund, covering anywhere between one to three months’ worth of living expenses. However, if you’re a digital nomad, it becomes even more important. Your work life is open to more risks, whether it’s clients dropping off, flights getting canceled, or visa fees popping up unexpectedly. You need a financial cushion to not just ensure that you’re able to stay afloat but to get you home in a pinch.

Relying Too Heavily On Credit Cards

Credit cards are very useful to nomads indeed. However, they can also be highly dangerous if misused. If you’re using credit cards to fund your travels rather than to make your cash flow more manageable, you run the risk of constantly playing catch-up with them and even falling behind. Debt relief strategies, as outlined by Alex Kleyner, can help you get things back in hand. However, you should have a consistent strategy to pay off existing debt and to use it more responsibly in general.

Not Managing Your Credit

Poor use of credit cards is only one way that a freelancer can fail to make the best use of their credit. A good credit score can help you maintain a high degree of financial flexibility, helping you get some breathing room when you need it. However, you have to actively work toward it, such as making structured use of existing credit and keeping tabs on your credit report to fight any fraudulent expenditures or correctible mistakes.

Forgetting About Taxes

When you’re paying off your tax bill for a specific deadline, it is so easy to forget about taxes. However, not only do digital nomads have to pay taxes like every other freelancer, but they might face even more complicated tax issues due to working in different companies. You likely owe taxes ot your home country regardless, but you should ensure you understand local laws on freelancing internationally, as well. Set aside a portion of every payment you receive, from 20-30%, to ensure that you’re able to pay off what you owe.

Living Like You’re Always On Vacation

While it is important to put aside a little money to enjoy the various destinations you’re hitting up, your budget won’t be able to keep up if you let your luxury expenses go unchecked. The key to sustainable nomad life is treating it like a lifestyle, not a permanent vacation. Create a monthly spending plan, prioritize essentials, and save for the extras.

The mistakes above can put you in real financial trouble, which, as a digital nomad, can leave you stranded and in real dire straits. Start doing what you can to combat those risks now.