Budgeting Methodologies for Digital Nomads (with Examples)

digital nomad going over his budget and finances

Budgeting is an essential skill for digital nomads who want to make the most of their global adventures while maintaining financial stability. As cost of living varies greatly from one country to another, it’s crucial to adopt a budget methodology that aligns with the local expenses and one’s personal preferences. In this blog post, I’m exploring countries that fall into the following cost of living categories: low, moderate, and high, and discuss how different budget methodologies can be applied to each of them. I’ll also use stories of people who have successfully managed their finances while living and working in various countries.

Overview of Budget Methodologies

View of a bank from outside

Before diving into the stories of people using various budget methodologies in different cost of living categories, let’s briefly introduce and describe the seven main types of budget methodologies. Different methodologies are better suited to certain countries and habits of digital nomads.

50/30/20 Budget

This popular method divides your income into three main categories: 50% for essential expenses (housing, utilities, groceries), 30% for discretionary spending (entertainment, dining out), and 20% for savings and debt repayment. It’s a simple and straightforward approach that works well in various situations.

Zero-Based Budget

In this method, every dollar of your income is allocated to a specific category, ensuring that your total income minus your total expenses equals zero. This approach is highly customizable and allows for more precise control over your spending.

Envelope System

The Envelope System involves dividing your income into various expense categories and placing the allocated amounts into physical or digital envelopes. Once the money in an envelope is spent, you cannot spend more on that category until the next budgeting period.

The 60% Solution

With this method, 60% of your income is allocated to essential expenses, while the remaining 40% is divided into four equal parts for long-term savings, short-term savings, discretionary spending, and fun money. This approach aims to simplify budgeting while still allowing for saving and enjoyment.

The Percentage Method

This flexible method involves assigning specific percentages of your income to different expense categories based on your personal preferences and financial goals. The percentages can be adjusted to fit the cost of living in your destination country.

The Priority-Based Budget

In this approach, you first determine your financial priorities and allocate your income accordingly. This method ensures that the most important expenses, such as savings and debt repayment, are covered before allocating money to discretionary spending.

The 30-Day Rule

This method is focused on curbing impulsive spending by imposing a 30-day waiting period before making any non-essential purchases. During this time, you can assess whether the purchase is truly necessary and determine if it fits within your budget.

Each of these budget methodologies has its strengths and weaknesses, and some may work better for certain situations or cost of living categories. It’s important to evaluate your personal preferences, financial goals, and the cost of living in your destination country when choosing the right method for you.

Tips for Choosing the Right Budget Methodology

Selecting the right budget methodology can make all the difference when it comes to managing your finances as a digital nomad. Here are some tips to help you choose the best approach for your unique situation:

  1. Assess your personal preferences and financial goals: Consider your spending habits, saving goals, and the level of detail you prefer when tracking your expenses. Some people may prefer a simple approach, while others might want a more detailed and customized budget.
  2. Consider the cost of living: Research the cost of living in your destination country, and choose a budget methodology that allows for adjustments to cater to the specific expenses in that area. For example, budgeting for a Colombian trip is different than a Norwegian trip.
  3. Be flexible and adaptable: As your financial situation, goals, and location change, your budgeting approach may need to evolve as well. Be open to adjusting your budget methodology as needed.
  4. Combine methodologies: You may find that no single budgeting method perfectly suits your needs. In that case, consider combining elements from different methodologies to create a customized budget that works for you.
  5. Monitor your progress: Regularly review your budget and track your spending to ensure you’re staying on track. This will also help you identify areas where you may need to make adjustments.

Budgeting in a Low-Cost-of-Living Country: Vietnam

Aerial view of Ho Chi Minh City

First, meet Allison. She’s a vibrant digital nomad, and had recently moved to Ho Chi Minh City to explore the bustling metropolis while continuing her career as a freelance graphic designer. Earning a respectable average income of $3,500 per month, she had wisely decided to follow the 50/30/20 budgeting methodology to manage her finances in a sustainable and enjoyable way. This meant that 50% of her income would go towards essentials, 30% towards lifestyle choices, and the remaining 20% into savings.

Like many digital nomads, Allison chose to rent a cozy one-bedroom apartment in the city center, which set her back around $600 per month. Utilities and internet cost her around $80 and $15 respectively. Following her budget, this left her with $480 for groceries and transportation, the remaining essentials. You might be wondering, “How does she manage her grocery expenses?” Well, Allison chose to spend around $150 on groceries, while allocating $100 for transportation, including the occasional taxi ride and her public transportation pass.

Now, let’s dive into how Allison spent her lifestyle budget. Being an outgoing and social person, Allison loved to work from cafes and indulge in the city’s vibrant dining scene with friends. She spent around $150 per month on dining out and an additional $75 on café visits for those delicious cappuccinos and productive work sessions. As a fitness enthusiast, she also invested in a monthly gym membership for $30, ensuring she stayed healthy and energized.

Allison also treated herself to some self-care and entertainment. A monthly haircut, laundry services, and basic toiletries amounted to $40, while she also set aside $50 for a monthly massage and a couple of movie tickets. In total, her lifestyle expenses were around $1,050, sticking to the 30% mark of her budget.

What about savings, you ask? Well, Allison understood the importance of having an emergency fund and saving for future investments or vacations. She diligently put away $700 (20% of her income) each month into her savings account, giving her the financial security and freedom she desired.

As a digital nomad, Allison had mastered the art of balancing work, play, and financial stability in Ho Chi Minh City. Her story is an inspiring example of how a little planning and budgeting can help you enjoy life to the fullest while still being financially responsible. So, are you ready to take on the 50/30/20 budgeting methodology and find your own balance in life?

Essentials (50%)$1,750
Lifestyle (30%)$1,050
Gym Membership$30
Personal Care$40
Savings (20%)$700
Emergency Fund & Savings$700
Allison’s 50/30/20 Budgeting Table

Budgeting in a Moderate-Cost-of-Living Country: Portugal

Street view of Lisbon Portugal

Our next story is about Liam, who earned his living as an online tutor. His job allowed him the freedom to live and work from anywhere in the world, but he chose Lisbon as his temporary home base. With an average monthly income of $3,800, Liam had to be smart about his spending habits, especially since his income fluctuates from month to month. Using the Percentage Method of budgeting, Liam carefully divided his earnings into different categories, ensuring that he could enjoy his time in Portugal while also saving for a rainy day.

With the beautiful cobblestone streets of Lisbon beneath his feet, Liam knew that one of his largest expenses would be housing. Allocating close to 35% of his income for this category, he spent about $1,295 per month on a cozy one-bedroom apartment in the heart of the city, including utilities. This left him with enough funds to cover his other expenses while enjoying a comfortable living space.

Groceries are essential for any digital nomad, so Liam set aside about 10% of his income, or $375, for this purpose. Being a food lover, Liam enjoyed exploring the local markets and cooking up delicious Portuguese dishes in his own kitchen.

Liam didn’t own a car, so transportation costs were minimal. With only 3% of his income, or $116, he was able to purchase a monthly public transportation pass and occasionally use rideshare services to get around Lisbon. Who needs a car when you’ve got the vibrant yellow trams of Lisbon at your fingertips?

Healthcare was important to Liam, so he allocated 5% of his income, or $190, for health-related expenses. This covered his private health insurance and any out-of-pocket costs for medications and doctor visits.

As an online tutor, cafes were Liam’s office of choice, and he enjoyed dining out with friends. He dedicated 15% of his income, or $570, to this category. From sipping coffee at charming cafes while working on his laptop to sharing laughter and stories with friends over a scrumptious meal, Liam truly embraced the Lisbon lifestyle.

Clothing, personal care, and fitness expenses made up 10% of Liam’s budget, or $380. As a hiking enthusiast, he made sure to invest in good-quality gear and comfortable clothes. The breathtaking trails around Lisbon and nearby Sintra-Cascais Natural Park were calling his name, and he was more than ready to answer.

Finally, communication expenses like his internet and phone plan amounted to 3% of his income, or $114. This allowed him to stay connected with his students, family, and friends around the world. After all, how can you be a digital nomad (and tutor no less!) without staying digitally connected?

To ensure a stable financial future, Liam made it a priority to save at least 20% of his income, or $760, every month. With his fluctuating earnings, building a rainy-day fund was crucial. You never know when you might need that extra cushion, right?

Through careful budgeting, Liam was able to live his dream as a digital nomad in the enchanting city of Lisbon. With the perfect balance of work, play, and saving, he was able to truly embrace the Portuguese way of life. Who says you can’t have your pastel de nata and eat it too?

Rent (utilities included)$1295
Personal Care and Gym$380
Dining & Entertainment$570
Internet and Phone$114
Total Expenses$3040
Monthly Income$3800
Savings and Investments$760
Liam’s Percentage Method of Budgeting Table

Budgeting in a High-Cost-of-Living Country: Singapore

View of Singapore from Marina Bay

Omar, a digital nomad and marketing manager for a US-based company, had just settled into his new life in Singapore. Knowing that this was an expensive city to live in, he decided to adopt a zero-based budgeting approach to ensure he made the most of his $5,000 monthly income while still saving and investing as much as possible. With no car or education expenses to worry about, Omar was ready to dive headfirst into the vibrant Singaporean lifestyle.

Can you imagine waking up every morning in a stylish condo situated right in the heart of the city? That’s exactly what Omar did, and he loved it. His rent was a reasonable $2450 per month, which left him enough cash to enjoy the city’s perks. Utilities were a mere $311, so that was no big deal either. But let’s not forget about groceries, Omar spent about $222 on groceries every month, opting for local markets to save some dough.

He also ditched the idea of owning a car and embraced the efficient public transportation system. He spent a modest $59 on his monthly transport pass, allowing him to travel around the city without breaking the bank. Plus, with all the money he saved on car expenses, he could afford to splurge on the occasional taxi or ride-sharing after a night out with friends.

Omar was a fitness enthusiast, so he joined a gym for $74 per month. Not only did it give him access to top-notch equipment, but it also offered a place to socialize and network. Speaking of networking, Omar enjoyed attending events to expand his professional circle. He spent around $111 each month on event fees and the occasional movie or concert ticket.

It’s no secret that Singapore is a foodie’s paradise, and Omar was no exception. In addition to cooking at home, he loved trying new dishes and exploring the city’s hawker centers, where a delicious meal could cost as little as $3.70. He allocated $185 per month for dining out and entertainment, which still allowed him to have fun without overspending.

Lastly, let’s not forget about those little extras that make life enjoyable. Omar was an avid gamer and had a penchant for video games. He set aside $74 for his gaming habit and the occasional gadget or accessory. With his priorities in order, Omar was able to save and invest a respectable $1,734 each month. Not too shabby, right?

Omar’s zero-based budgeting approach allowed him to fully experience city life in Singapore while maintaining a healthy savings and investment plan. It even allowed him to have plenty left over for any additional unforeseen costs. With a bit of planning and discipline, you too can live the life you desire without sacrificing your financial goals. Just ask Omar!

Utilities (including phone and internet)$311
Gym Membership$74
Networking & Events$111
Dining & Entertainment$185
Gaming and Accessories$74
Total Expenses$3266
Monthly Income$5000
Savings and Investments$1734
Omar’s Zero-Based Budgeting Table


Choosing the right budget methodology is crucial for digital nomads who want to maintain financial stability while experiencing the adventure of living and working in different countries. By understanding the cost of living in each destination and selecting a budgeting approach that suits your unique needs, you can make informed financial decisions and enjoy your journey with peace of mind. Remember to stay flexible, adaptable, and open to experimenting with various budget methodologies to find the one that works best for you. Happy travels!

Founder : Wherever I May Work | Website | Other Posts

Jared has worked remotely for 15 years in various marketing capacities, and has managed hundreds of marketing campaigns along the way. He has held freelance, agency, and in-house positions for companies large and small.

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