The remote work evolution has led to a surge in digital nomads – people who use technology to work anywhere in the world.
Whether you’re already a digital nomad or thinking about becoming one, there’s one very important aspect you need to be thinking about: how to get paid and stay financially stable when working abroad.
Managing your income across different countries, currencies and banking systems can be difficult – particularly if you are having to deal with high fees, poor exchange rates and unreliable payment options.
In this guide, we'll explore the most effective payment methods for digital nomads, as well as what to remember when managing your finances on the move.
How do digital nomads earn money?
Digital nomads earn in a variety of ways, including:
- Through freelance platforms like Upwork, Fiverr or Toptal
- As remote employees on international payrolls
- By launching online ventures, such as ecommerce stores or digital consulting
- Content creation, affiliate marketing or selling online courses
No matter how you earn, knowing how to get paid smoothly across borders is key to keeping your finances steady and your lifestyle sustainable.
Why is receiving money from abroad difficult
A number of challenges can make it more complex to receive money from abroad. Thankfully, there are some ways to get around these, but it’s important to bear them in mind.
- Exchange rates: When exchange rates between currencies go up and down, that can change the amount you are receiving when you are being paid from another country.
- Bank fees and delays: Because banks often move money and convert currencies through complex networks, often involving other banks, fees for sending and converting money can stack up. It can also make it take longer to receive money, making it harder to plan ahead and stay on track with accommodation/travel payments.
- Limited access to financial services in some regions: Not all countries will have good access to financial services, while some platforms for receiving money might not be supported everywhere.
- Taxes: It can be hard to track when and where you are legally required to pay taxes when you are on the move. Some countries might even prohibit earning income locally if you don’t have the right visa.
These problems can make it harder to get paid in a different country. However, there are a number of things that you can do as a digital nomad to help keep track of your finances and get paid the right way.
Tips for managing finances as a digital nomad
It can be challenging to manage money on the move – but if you put the right systems in place, you can stay organised and make sure that your money is able to move securely across borders. Here are some key tips:
- Use multicurrency bank accounts
Multicurrency platforms offered by companies such as Wise, Revolut or Payoneer will enable you to receive payments in multiple currencies and minimise conversion fees. Even better, these services can also offer debit cards that allow you to easily access funds globally and make payments in multiple currencies.
- Track your income and expenses
Online platforms such as QuickBooks, Xero and Wave have also made it easier than ever to stay on top of your income and expenses. For example, QuickBooks is based in the cloud, meaning you can access your dashboard anywhere and at any time, and it can also help you to automate your invoicing, saving you time and effort.
If you’re planning to move regularly, it can be difficult to keep a solid budget, so these online platforms can also help you track outgoings – particularly when different currencies get involved. Think about expenses that you might not even have considered could change from one country to the next, such as the cost of travel insurance or coworking spaces, and keep a 3-6 month cash buffer aside in case of emergencies or late payments.
- Plan for taxes
The first step here is understanding your tax residency status, which might depend on how long you stay in a country. For example, in the UK you are only considered a resident in the UK if you spend 183 or more days in the UK in the tax year, or if you meet certain other criteria, which would mean you would have to pay UK tax on all of your income, whether it’s from the UK or abroad.
If you are earning income while moving between countries, you could be taxed by both your home country and the country you are located in. Many countries have Double Taxation Agreements in place to prevent the same income from being taxed twice. It’s a good idea to consult the official tax authority websites of both your home and host countries, or consult a tax specialist if you are not sure.
- Consider local banking options in frequently visited countries
If you are planning to spend a longer time in a country, it may make sense for you to explore local banking options, which you can then pair with other multicurrency accounts if necessary. Aside from making it easier to get paid like a local, this will also help with things like paying utility bills or securing longer-term visas.
- Watch out for fluctuating exchange rates
As a digital nomad you’re often dealing with multiple currencies – you might be getting paid in US dollars, spending in Thai baht and then transferring to a separate euro account. In this case, exchange rates can have a direct impact on the amount of money you keep.
Bad timing can cost money, which is why it can sometimes be a good idea (particularly if you are transferring high amounts) to wait for better rates, or alternatively use special tools that can help you to schedule automatic transfers when rates swing in your favour. Certain money transfer providers might also feature exchange rate alerts that ping you when the rate becomes favourable again.
Send money abroad with FXcompared
When you’re juggling multiple currencies, international clients and different banking systems, even a simple payment overseas can turn into a hassle – with unexpected fees, bad exchange rates or slow transfers.
Whether you are looking to get paid or send money abroad, FXcompared can make your life a lot easier. We help you compare international money transfer options, so you can find the most cost-effective, reliable way to make and receive payments – no matter where you are in the world.
Use our money transfer comparison tool to compare money transfer providers today. We also have guides on repatriating salaries and an in-depth guide for expats.
