Becoming a digital nomad

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As the global workplace continues to transition to a more digital-first format, everyday Americans are being encouraged to rediscover their love of travel, all while maintaining a career in everything from freelance writing to accounting and design. Working from home is breathing new life into burned-out employees and relighting the flames of creativity as people discover a new way of working that has also been surprisingly productive for today’s U.S. commerce. With 2021 bringing a surge of the digital nomad, life on the go may just be something worth considering for you and your family.

Table of contents

Remote working trends

The freedoms of the virtual workplace have made room for travel, allowing employees to schedule time for long or overdue trips. Working remotely is an attractive offer: there is usually no required daily commute and employees can work in an environment best suited to their work style. For some employees, it means a life on the road.

Studies show that many employees have become more productive since moving to a remote format thanks to fewer distractions. Employees can use their time on the clock to concentrate without having to divide their focus as frequently. FlexJobs found in a recent survey that digital nomads work less, too. About 70% of digital nomads work 40 hours or less each week, less than a majority of the general population. Even more impressively, another survey reports that about 4% of digital nomads support themselves with less than ten hours of work each week.

The sustainable lifestyle of a digital nomad helps make its surge in popularity more clear, with the number of people participating in remote work up 140% from 2005. Google search results for “digital nomad” spiked with COVID-19, ballooning from 1,300,000 in January 2019 to over 4,520,000 by April 2021. According to the 2020 State of Independence study by MBO Partners, 19 million Americans have plans on becoming a digital nomad within the next two to three years, which is an 18% total increase since 2019.

Considerations when switching to life on the road

Before you pack your bags and make the switch, there are a few things to consider to ensure that life as a digital nomad is the right fit for you. Life on the road is different from traditional work-from-home life, calling for quite an adjustment when you initially set out. Before you begin your travels, here are some ways to prepare for the life of a digital nomad.

Cars vs. travel vans

Travel vans have long been associated with a nomadic lifestyle, but there are many digital nomads today who opt to use an everyday car. There are pros and cons to each, which generally include the following (though each individual vehicle make and model may prove to have unique considerations):

Cars

Pros Cons
Cheaper to insure
More affordable maintenance
Easier to navigate through roads
Minimal space
No work area
Usually requires separate accommodations

Travel vans

Pros Cons
More living space
Room for mobile office
Can have upgraded luxury features
Often more expensive insurance
Greater fuel costs
Sometimes expensive repair issues

Whichever option you choose, taking time to determine how you will financially protect your new home on wheels may be beneficial. Even if you do not intend on sleeping in your vehicle, you will still be spending a lot of time in it. You want to be sure that you are protected for each and every mile. This not only means having an active driver’s license and vehicle registration, but also considering a full coverage auto insurance policy in case you experience any losses along your travels.

How to protect yourself financially

As a digital nomad, your vehicle is of the utmost importance to you when it serves as home, office and mode of transportation. Regardless of which vehicle you choose, you will want to be sure that you protect it with the right amount of insurance so you do not risk financial devastation if the unexpected happens.

While it is always important to consider the cost of car insurance, you also want to ensure that you have adequate coverage. Your needs may vary based on travel plans and your existing insurance policy will likely need to be modified or replaced. For example, if you intend to live in a travel van, your vehicle could be considered a mobile home and require special RV insurance instead of the standard auto insurance policy. Before you hit the road, take the time to carefully read your insurance policy so you fully understand the types of auto insurance coverage that you have.

An experienced and licensed insurance agent can help walk you through coverage options for your exact vehicle. When searching for auto insurance coverage for your digital nomad lifestyle, researching the best car insurance companies is generally an excellent place to start.

Securing internet

Outside of work concerns like video call meetings and email capabilities, it helps to have access to the internet to surf the web, stream your favorite programs and contact family and friends. Because of the importance of internet access, planning for its expense could be a crucial step. If you do not already have LTE service or Wi-Fi, there may be other options:

  • Hotspot or satellite: You could purchase a hotspot or a satellite, but before you decide on what type of service is best for you, be sure to consider different plans and pricing. Consider any usage caps and additional fees that apply as well as applicable service areas.
  • Local hot spots: If you do not plan to use the internet regularly, you may be able to leverage free hotspots from local businesses. However, be sure to follow any usage requirements.

Maximizing storage

One of the biggest challenges on the road is the limited room, which may inevitably lead nomads into a minimalist lifestyle. Even if you host a successful yard sale to downsize your inventory, you may still require storage for your belongings while you are away. A storage locker or unit could help securely store your things at a low cost.

Many resources are available to help you find the best setup for your home on wheels. From YouTube tutorials to Pinterest dream boards, there are plenty of stimuli to keep you inspired for space-saving techniques on the road ahead. A mobile home office could be built within a conversion van or you could go camping with your sedan. The possibilities are nearly limitless.

Cost considerations

Life on the road spares you from many of the traditional expenses of everyday life, such as renters or homeowners insurance and utility bills. However, the life of a digital nomad comes with its own expenses, such as:

  • Gas: Regardless of your vehicle, gas could cost quite a bit each month, so it helps to budget accordingly.
  • Insurance: You will likely need auto insurance and given the additional miles on the road, you may want to prepare for a monthly or annual cost more than the average cost of auto insurance due to added risk.
  • Internet: The cost of your internet depends on the plan and provider you choose. Rates for usage may be higher on the road, potentially incurring expensive data overages if you are not careful.
  • Maintenance: Your vehicle may need to be winterized each year, requiring antifreeze, winter wipers or snow tires.
  • Water: On the road, filling your water pipes can get costly. Consider including room in your budget to account for this water bill could increase quickly based on usage.

Buying new vs. used

If you are thinking about upgrading your vehicle, there is the additional consideration of whether to buy a used versus new car or van. There are pros and cons to each:

Pros Cons
New car or van Less anticipated maintenance
May have a warranty
May come pre-equipped with bonus features
Higher sticker price
May have greater depreciation
May be more expensive to insure
Used car or van Often cheaper to buy
May be pre-fitted with some features fit for life on the road
Often cheaper to insure
May require much more maintenance
May have hidden issues or problems
Typically has high mileage

Parking

As you branch out for a life on the road, it could be difficult to find appropriate parking. These options may provide a safe and affordable place for digital nomads to park:

  • Walmart
  • Casinos
  • Hotels
  • 24-hour grocery stores
  • Street parking
  • National parks

Before you turn off the ignition, check with any local businesses, as well as local law and ordinances to ensure that you can legally park your vehicle. Some locations, such as KOA campgrounds, offer water and electric hookups. Road-weary travelers are often eager to enjoy more modern amenities for a while. Just be sure to plan in advance to ensure that there are both the features you need and the availability to accommodate you.

Tips

If you are considering whether the nomadic life is right for you, these tips may help you sort out how to balance the transition.

  1. Split your time between work and travel for a healthy work-life balance.
  2. Stick to your “new normal” routine.
  3. Remain present at work, whether it is via email, phone or video.
  4. Minimize distractions to create clear boundaries between work and personal time.
  5. Maintain long-distance relationships, which may provide priceless companionship along your travels.
  6. Try a coworking space where you can enjoy the camaraderie of the office while working independently.
  7. Network with other digital nomads who can identify with the unique challenges that you face.
  8. Invest in the right products so you have the necessary equipment and accessories for your job. This could include everything from a hard laptop case to a travel stand to make the remote workday more comfortable.
  9. Remember the change in time zones as you travel.
  10. Have patience and understand that life as a digital nomad is always evolving. You can continue to adjust and adapt as your needs change.

It is a heady decision to break with the comforts of home and choose a nomadic lifestyle. Still, with today’s internet and cloud-based systems, it is relatively easy to visit the coast and still be plugged into work at all times.

At Bankrate, we anticipate to continue seeing a rise in remote work in the coming years. There are also a growing number of states, cities and counties that offer to pay remote workers to move to the area. This, too, may become a more popular trend in the months and years to come as more workers discover the freedoms of both remote work and the nomadic lifestyle. You may start by setting yourself up with a reliable internet connection, a dependable vehicle and the right employment opportunity, all of which could help you find yourself situated to enjoy a new life as a digital nomad.

Written by
Lena Borrelli
Insurance Contributor
Lena Muhtadi Borrelli has several years of experience in writing for insurance domains such as allconnect, Healthline and Reviews.com. She previously worked for Morgan Stanley.
Edited by
Insurance Editor