Balancing work and life is difficult enough, but remote work blurs those boundaries even further – and that goes for both time and money. When you can work anywhere in the world, how do you determine what’s a work expense, and what’s not?
You should consult a financial advisor and professional accountant for your specific cases, but this article will cover some of the tactics I use to budget and track my business expenses, particularly while I traveled every other month as a digital nomad.
1) Separate work and personal expenses
If you have a dedicated office space, it’s easy to say everything that goes into it (rent, Internet, furniture) is a work expense. What if you regularly work from your couch or dinner table?
If you go on a trip to a conference in your industry, it’s easy to write it off as a work trip, but what if you extend your travels for an extra week and work from the hotel room? What about an extra month?
That the lines are blurred is an understatement.
If you’re a digital nomad, it’s extremely important to understand the line between travel and work expenses. If you need to go to a café in order to access the Internet to do some work, that can be written off as a business expense. But if you’re going to a restaurant for dinner that’s a travel expense.
I recommend highlighting the date of your receipts as you get them, and then writing down whether it’s a work expense in the margins (and why). At the end of each day/week/month/trip compile all of the receipts into a spreadsheet, staple your receipts, and file them away.
2) Track your revenue and expenses monthly
You want the full picture when looking at your expenses. For example, a $100 meal can be affordable or unaffordable depending on how much you make, and your other expenses.
Keep your income and expenses in the same spreadsheet. Use one tab for income, separated by different clients. Then use separate tabs for your expenses. You can break it out by work expenses, travel expenses, and personal expenses (optional).
3) Build in your savings as an expense
My biggest tip for remote workers who travel frequently is to prioritize saving, since I’ve seen how travel can eat away at any disposable income that comes in. The first of the month, I pay into my savings as if I’m paying my electricity bill.
4) Create a travel fund
I recommend paying into a travel fund as well, and avoid going on a trip somewhere new until you’ve got a goal amount saved up.
My goals were, with accommodation pre-paid:
- Expensive city, 1+ months: $3000/month
- Expensive city, ~2 weeks: $1000/week
- Affordable city, 1+ months: $1,500/month
- Affordable city, ~2 weeks: $500/week
5) Keep your daily budget separated in your wallet
If you’re traveling to a different country, be sure to exchange your cash. When I leave for the day, I move the budget I have for that day into my wallet. I keep emergency money in a different spot in my wallet, and the rest of my funds in another place.
This helps me make sure I don’t overspend day-to-day, while still having enough cash on hand if I decide to get something out of budget.
Everyone has their own tricks for not breaking the bank while traveling the world. Talk to other remote workers and digital nomads to see what their budgeting advice is! Happy travels.