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How we Went Full Digital Nomad in Two weeks for about $1000

Here I'll speak to some nitty gritty details of the finances involved with going "full digital nomad" which we accomplished between Jan 14, 2020 (deciding to do it) and Jan 28th 2020 (boarding the plane). What do I mean by "full digital nomad"?

Going full digital nomad, for us, meant not having a lease on an apartment, since at this point we don't own any real estate. It means not having a "home base" to keep furniture or anything that isn't able to travel with us. Going full digital nomad also means , for us at this point, being legally designated as a "permanent tourist." This means not being in the U.S. Because we make less than $100,000, staying out of the country saves us from paying high self-employment taxes, since our income is earned abroad. This is called the "foreign earned income" exclusion. Basically, if you don't rely on U.S. infrastructure, there's no reason for the government to collect on it. So by becoming full-time digital nomads we compile all our belongings into what can be carried across the world reasonably, and break any ties to a U.S. residence, although we kept my mom's address to use for billing and other purposes where you need to fill in a physical permanent address. You can also purchase a U.S. address to use for this purpose. What were my normal non-nomadic expenses like? In order to understand how our "going full digital nomad" compared to our "non-nomadic" life in terms of finances, it's useful to know what and how we were spending during this time of our lives. In August 2019, we moved into the 2 bedroom, 1 bathroom apartment (5 minute drive from the coast) for $1150 a month rent and flat $100 a month electricity. Luckily, I tracked all our expenses starting from August, so I can give you a really good idea of how much we spent on average. I tracked in 28-day increments and recorded literally every purchase.

A few notes for understanding my data:

1. The debt expense is payments on old debt. No new debt was taken out.

2. Income is mainly Gogokid, but may include various odd jobs.

3. We got a dog in November, but to give an accurate depiction of monthly dog expenses I just averaged the costs for November and December. Here's the breakdown of travelling with a dog.

Here's the AVERAGE of our monthly expenses from August to December, broken down by category.

So later on, when I calculate the expense it took for us to go full on digital nomad, I will take this number to be our "normal" expenses, and subtract this from the amount spent during the time in which we were preparing to go abroad, which includes everything from luggage to dog immunizations, to booking fees, flight meals and so on. Oh, yeah, it also includes expenses from our surprise wedding including marriage license.

I think by most standards we're pretty frugal, and I'm trying not to judge myself for the minor compulsive-Thai-food thing that was going on during this time as I revisit our expenses.

Packing to be a permanent tourist
First pass at becoming digital nomad from a full-fledged apartment lease. I tell myself it's all going to fit.

Why was there a 2 week time crunch and how did I manage to meet it? As mentioned in a prior post, we felt compelled to move away from the renting lifestyle into the owning lifestyle, and began research on getting a house around the time of the new year 2020. We neither really had savings though, but were "confident" in our ability to afford a mortgage under a bunch of different first-time home buyer government packages. We started talking to a realtor and some banks. We soon found out that based on our tax returns, there was no way we could qualify for the packages we wanted to until 2021. This was mainly because we both had only one year of tax returns with our self-employment income on it, and the lenders like to see three consecutive years in the same industry. We're both a bit stubborn, and weren't willing to continue renting at no other benefit to us. The non-negotiable matter at this point was having a dwelling with a private yard. We wanted to at least be able to let our dog out, and at best be able to garden. After surveying the options in Jacksonville for renting under that condition, we couldn't help feeling like we wouldn't be satisfied. Then, I'm not sure who, but one of use had a spark of inspiration. Maybe it was because we were recently discussing my Minorcan ancestry and how awesome it would be to go to Majorca "someday", but one of use suggested we just go Spain, go full digi-no again and try to do it right this time.

"Doing it right" entails spending at least 330 days out of the country to get the desired tax breaks. The specific tax break we sought was the foreign earned income exclusion as self-employed permanent tourists. At this certain point in time (May 2020), I'm still not totally sure how much we'll be able to write off, if any. Definitely don't run off with this advice because we're just now talking to tax professionals and changing careers and might even go back to the U.S. in July (but maybe not, stay tuned for updates.) But, in that moment, we got out some paper and listed two columns: stay in the U.S., and go abroad. The date was January 14, and we needed to be out for 330 days. So we set the date as getting out by January 28th, in two weeks, to allow 7 extra days in case of emergency of needing to go back to the U.S. We then counted up our expenses and our experiential "assets" in either case, and determined that going abroad was worth breaking the lease. Spoiler: It was worth breaking the lease, but we didn't end up doing the tax thing.

And finally, what EXACTLY did everything cost?

I've included the same expense table as above with the same categories, but this time for the time period of December 28, 2019 to January 27, 2020. Since our flight was on January 28, I thought it was only fair to include the following time period as well, subtract our normal expenses from both, and add those "extra" costs together. Also included is an expected $400 teeth extraction for our dog AND a $280 computer, but I included these because dog or not, you can always rely on something unexpected to come up. The average of the two months put together was $2944. Subtracting our average living expenses of $1889... the grand total is $1055!

====> It cost us about $1055 each to go full digital nomad,

with a dog and a wedding, in two weeks <======

But how does that break down? Do you have itemized expenses?

Yes. Here is the breakdown. Note also that you might not have a dog or a marriage or a new computer to be concerned with when thinking about your trip or transition, so I've included the cost of JUST going full digital nomad at the end!

Expenses directly related to going full digi-no, in chornological order of when they were bought, over the time period of deciding to leave and getting settled in:

  • $455: Plane tickets

  • $13: Cleaning supplies for moving out of apartment

  • $98: Bella's updated dog tag, EU certification, airport sling, exams, etc

  • $100: Bella's emotional support animal certificate + expedited delivery

  • $62: Gym membership cancellation fee

  • $100: Berkey water filters (so we don't have to buy giant jugs of clean water)

  • $7: EU outlet converters

  • $575: Last month rent

  • $482: First month deposit for our Airbnb in Spain

  • $95: Marriage License + ceremony

  • $73: Wedding dress + alteration

  • $48: Meals while travelling

  • $271: Rental Car, Tolls in Spain, Fuel

  • $75: Internet at our Airbnb (our host upgraded it so we could work, we paid for it)

  • $22: International Sim Card

  • $90: New suitcase in Granada after mine broke

  • $205: Overweight baggage fee

  • $12: Fees in currency exchange

Notice that a lot of this could have been avoided, although it's wise to expect the unexpected. We had a wild ride when first arriving, and you can read about exactly what resources were dissipated here. The purpose of this is to learn from my mistakes, so here;s how low you can relaistically go!

Notice the rents can be excluded because rent is normally paid 1x a month in the neighborhood of $400-$600. This time they did over lap a bit. The wedding and dog costs were truly minimized with the exception of a last minute x-ray that we had done out of sheer paranoia after she appeared to hurt her leg (she was fine, not a wasted expense at all). If you don't have a gym membership, or have month-to-month contract, that expense is gone as well. The water filters absolutely saved us money as we use clean water for coffee, tea, cooking, washing our faces, and of course, for drinking. We easily would have spent over $100 on water if we were buy jugs. Also, with no car in Spain, there was no way that was happening. Our meals while travelling were really moderate, and I'm only including meals up until arriving at our final destination (airport + the next day of driving). We absolutely spent a little more eating out in our first week while getting acquainted with the best grocery stores and offerings. Most people don't pay for separate internet in Airbnbs, so that's also excess. Also, the SIM card I got never ended up working for unknown reasons, would have been better to just sparingly use roaming + Whatsapp from the start. New suitcase and overweight baggage could have been avoiding by weighing our bags in advance and actually owning functional luggage (I used my mom's decade-old suitcase.) Here's some really good tips on minimizing luggage weight. Lastly, currency fees could have been avoided by transferring ahead of time at a bank! So, the absolute necessary costs, outside of rent, dogs, weddings, and lack of luggage are (DRUMROLL):

  • $455: Plane tickets

  • $13: Cleaning supplies for moving out of apartment

  • $100: Berkey water filters (so we don't have to buy giant jugs of clean water)

  • $7: EU outlet converters

  • $48: Meals while travelling

  • $271: Rental Car, Tolls in Spain, Fuel

For a total of $894. There you have it, the true cost of going full digital nomad with all the considerations, bells, and whistles!

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