Digital Nomad Finances 101: How to Make Your Money Go Further

Digital Nomad Finances 101: How to Make Your Money Go Further

Digital Nomad Finances 101: How to Make Your Money Go Further

If you’ve scrimped and saved for months to fund your new life as a digital nomad, you want to make sure your money goes as far as possible. Fortunately, there are a few deliberate decisions you can make with your digital nomad finances to make that happen.

Choosing the right credit card and bank account will help you stretch every dollar (or pound, or euro). Similarly, knowing where and how to exchange money for the best rate will help you get the most bang for every buck. Here are the key things to consider:

Get the right bank account

The bank you use at home may not be the best bank to use while you’re traveling or living overseas. Before you leave, find a bank account that has most or all of the following:

  • No ATM fees: No matter where you go, you’ll need cash. You can easily get cash from an ATM, but you’ll want to limit ATM fees. Keep in mind that while most banks don’t charge you to withdraw money from their own ATMs, they often charge you to use other ATMs, which is what you’ll be doing when you’re overseas. In addition, foreign banks may charge you an additional fee to use their ATMs. Look for a bank that has partner banks in the country where you’re going, or choose a bank that will refund all of your ATM fees.
  • No account minimum: If you’re a solo entrepreneur and you’re traveling, your income and expenses can fluctuate a lot. Make sure your account doesn’t require a minimum balance that you can’t meet.
  • No monthly account fees: Some banks charge you a monthly fee if you don’t meet certain requirements beyond the minimum mentioned above. For example, you may need to set up direct deposit of a paycheck or perform a certain number of monthly transactions in order to waive the monthly fee. Double check your bank’s policy and consider switching if you might be charged fees.
  • Online access/app: Before you leave, set up online banking on all your devices. Make sure you can deposit a check and pay bills remotely before you leave. Many unexpected circumstances are sure to arise as you travel, so test out the services before you leave. If anything goes wrong you’ll be less stressed and it will be easier to contact your bank when you’re still at home than when you’re in a foreign country.

Popular bank accounts for digital nomads:
Your local credit union might be tough when it comes to finding all of the above (though it’s not impossible!). The banks listed below operate on a larger level, therefore making them more suitable to travelers:

Get the right credit card

When it comes to travel, some credit cards are better than others. Here are some things to consider when you choose a card:

  • No foreign transaction fees: This is non-negotiable! You do not want to get dinged every single time you use your card.
  • Reward points: Most cards offer reward points, so think about how you will spend the rewards. Do you want to use the points to book plane flights? Hotels? Simply get cash back? Different cards will give you more points towards different reward categories, so research each card to see what fits your needs best.
  • Annual fee: Cards with an annual fee usually have a better sign-up bonus. If you only plan to travel and use the card for a year, it might be worth getting a card with an annual fee, because the fee is almost always waived in the first year. You can cancel the card after a year to avoid paying fees, try to negotiate with the credit card company to reduce or eliminate your annual fee, or pay it. If you are earning a lot more in rewards than the cost of the annual fee, then it might be worth paying.
  • Is it widely accepted? For example, American Express is widely accepted in the U.S., but in many other countries only Visa and Mastercard are used. Do research or play it safe by using a Visa or Mastercard.

Popular credit cards for digital nomads:

Pro tip: Remember to call your credit card company and your bank before you start traveling. They look out for your best interests and might freeze your accounts if they see suspicious spending in Vietnam and you haven’t told them that you are visiting Vietnam for three weeks.

Exchange money at the right places

There are tons of options for exchanging money, but some of them will offer you a better exchange rate than others. Here are the best ways to get a great exchange rate:

  • Use your credit card, and pay in local currency. Sometimes you have the option to pay using your home currency, but the rate is almost always better if you use the local currency.
  • Use an ATM at a bank (assuming your bank does not charge ATM fees).

If you want to get the best exchange rate, then avoid exchanging money anywhere that seems too convenient. You will pay for this convenience with a less favorable exchange rate. For example, you’ll often lose money when you exchange cash at the airport, at hotels, or at travel exchange counters. The exchange rate will be lower than your credit card or a bank ATM offers, plus you’ll often be hit with additional fees. These places are great for exchanging money in an emergency, but to get the most bang for your buck, plan ahead by contacting your bank to see if they can do the exchange for you, and use your credit card or a regular ATM while traveling.

Avoid budget-busting bank fees

You’ve saved to make this happen. This is how to make that money go even further as you take your life and business on the road -- something that, despite its unique challenges -- is entirely worth the preparation.

Digital nomad and location independence resources

Questions For An… Accountant

Questions For An Accountant

Questions For An... Accountant

One Woman Shops can’t always do it all. But when it’s time to turn to an outside pro -- and be certain we’re choosing the right one -- we’re often at a loss as to what to ask to get the info we need. Welcome to Questions For A… a series where we interview the pros themselves on the questions you need to ask before hiring them.

In this month’s edition, we bring you Questions for an....Accountant with contributions from accountants Amy Northard, Taisha Stewart of Saidia Financial, Catherine Derus of Brightwater Financial, and Erin Johnstone of Vivid Numbers. Here’s what they suggest you ask, and why:

Q: What services do you offer? What services are included in my package?

Amy’s why: Just like specializing in different industries, accountants can specialize in different financial services. Make sure your needs (tax planning, budgeting, etc.) align with what they can offer.

Tai’s why: Clearly define the scope of services you need or won’t need because you don’t want to be charged for a service you don’t need, nor do you want to be unaware of what’s included in your accountant’s quote. Some accountants provide tax preparation as well as monthly bookkeeping services. Some process payroll (which can include 1099s). Some accountants provide quarterly review meetings with the client, while others only talk to their clients once or twice a year. You want to make sure that there are no surprise charges down the road. Know what to expect from your accountant and when to expect it.

Catherine’s why: An accountant may provide any combination of the following services: tax preparation and planning, business formation, bookkeeping, payroll processing, financial and retirement planning, cash flow and budgeting analysis, and more. If the accountant you plan on hiring doesn't provide a service you need, ask if they have recommendations.

Q: Do you have experience in my industry?

Catherine’s why: Different industries come with their own unique accounting and tax issues. Accounting for a food blogger (are you tracking food purchases for recipe development?) is different than accounting for a retail store (hello, inventory!), which is also different than accounting for a freelance writer (do you have all of your 1099's?). Your accountant should be aware of tax opportunities that relate to your industry.

Erin’s why: There are standard tasks in accounting and bookkeeping regardless of industry that any good accountant will understand. However, you'll get more value from someone not only familiar with your industry but who has experience in it as well. You are essentially paying for the knowledge the accountant can bring to the table so the more they already know, the better!

Q: How can you help me grow my business?

Catherine’s why: Businesses have several moving pieces and an accountant can help you see the big picture by assisting with a business plan. At the same time, they can provide suggestions on your pricing, improving cash flow, assessing whether to hire an employee or contractor, and other ways to improve your bottom line.

Q: What bookkeeping software do you primarily work with, and what is your preferred method of communication?

Catherine’s why: Gone are the days of schlepping a shoebox full of receipts and a folder full of statements to your accountant's office. Unless, of course, your accountant really wants you to! These days, accountants are using cloud-based accounting programs and file-sharing sites, emailing contracts and invoices, helping you track expenses with online receipt scanning, and communicating via Google Hangouts or Skype. When you have questions, figure out if your accountant prefers a phone call, email, or something else. When I work with financial planning clients, we have a set number of in-person or virtual meetings throughout the year, but I offer unlimited email support in implementing planning recommendations.

Amy’s why: Many accountants have a preference as to which bookkeeping software they use because they're most familiar with it. Familiarity means they can work more efficiently and offer advice if you have any problems with the software.

Erin’s why: We all know that communication is critical in business relationships, and it's no exception here. Look for someone who has the same preferred method of communication so it flows more freely and frequently. You can quickly become frustrated (and vice versa) if you always want to hop on Skype for a video chat but your accountant wants to respond with an email.

Q: Are you available during tax season?

Erin’s why: "Busy" season is a very real thing for accountants who also prepare taxes. You want to make sure your accountant will still have the capacity to assist you the first three and a half months of the year and not just go dark!

Q: What will your help cost me + how do you bill?

Amy’s why: Most accountants don't have detailed costs for their services listed on their website because client needs can vary so much. Ask about this up front so you aren't surprised with a big bill.

Erin’s why: Find out if you will be billed by the hour or if there will be a fixed fee. If by the hour, you will also want an estimate on what the fee will be. Along the same line of thought, you'll want to know exactly what you are getting for your money.

Q: What systems and processes do you have in place to protect my financial data?

Tai’s why: Your accountant will have access to the most private information you possess. You want to make sure that your financial statements aren’t just lying around for anyone’s eyes to see. Also, social security numbers, addresses, and other private details should be under lock and key or encrypted digital storage.

Q: How quickly should I expect deliverables to be available every month?

Tai’s why: Clear communication prevents misunderstandings. I was recently interviewing a new client whose main problem with his previous accountant was that he didn’t get information to him in a timely manner. Expectations should be outlined upfront to keep you happy and to also give the accountant the time necessary to make information available to you. For example: Will I be receiving my monthly profit-and-loss report by the 10th of the following month? Should I start to worry if I don’t receive it by the 5th? What deadlines can I expect you, the accountant, to adhere to?

Q: If I incur federal or state penalties for filing errors proven to be the fault of you, the accountant, will you reimburse me? And if so, how much?

Tai’s why: Again drawing from client narratives of past accountant relationships, an accountant is human and sometimes mistakes are made. If that accountant is filing tax returns (business or personal) or making estimated tax payments on your behalf and causes you to incur penalties or interest with the IRS because of neglect or oversight, what is their policy on resolving the situation? Perhaps they will reduce what they bill you. Perhaps they will pay part of the penalties.

Ready to grill (in the best way possible) your potential accountant? Print these questions out + have them at the ready when you’re looking to hire! And if you want pros we stand by, check out the One Woman Shop directory.

PS: Want more information from accountants on what to know before you hire them? Get the (free) Prior to the Hire ebook now!

9 Little Ways to Find and Save Money Today

For some solo business owners, this time of year is super profitable, with money streaming in from Black Friday sales, Cyber Monday sales, and all other holiday sales. For others, it's a slow period that can cause quite a bit of worry and stress.

Maybe it's a slow time in your small business. You've completed your client work and shipped your products but the money has temporarily stopped rolling in and you're not feeling particularly comfortable with the amount of money in your bank account.

First, make note of these things to do when business is slow. Then, get cracking on these 9 ways to find and save money in your business- today.

Redeem your credit card points: If you're not collecting points on all of your credit card purchases, sign up for your card's program ASAP. If you're already racking up the points, take a few minutes to redeem them- again, choose something practical that you can use for yourself, your contractors, or your clients, like $5 Starbucks gift cards.

Sign up for frequent flyer programs: Do you do a fair amount of personal and business travel throughout the year? Sign up for the frequent flyer program of every single airline you use then be sure to register your miles if you book your flight through a third party, like Expedia. We're embarrassed to admit how many miles we've let go to waste over the years because of our laziness!

Cut or renegotiate monthly costs: Print out your recent bank statements and take a highlighter to recurring charges. Do you find that your internet bill seems to be increasing every month or you no longer need such an extensive insurance policy? Cancel your service or call and ask for a price adjustment (hint: threatening to cancel your service and go with a competitor can be really effective if done wisely. Ask for the customer retention department if they're not budging on the price).

Donate to Goodwill: Your old printer, your clothes that no longer fit, and your Mary Kate and Ashley VHS movies? Take them to Goodwill, ask for a receipt, and file it away for tax time.

Sell your clothing: Want a more immediate addition to your bank account? Stores like Plato's Closet and Uptown Cheapskate, which buy your clothes on the spot, are popping up around the country. Find one, drag in your old clothing items, and relish the

Return items: Raise your hand if you have a bag from Marshall's or TJ Maxx sitting in your trunk- we do! Take a few minutes to return it and savor the sweet feeling of a $20 gift card burning a hole in your wallet.

Deposit a check or transfer your money from PayPal to your bank account: Okay, technically, this money is already yours. But give yourself a little boost in morale by visualizing all of your money in one place.

Follow up on an invoice: Again, you've earned this money, but it only counts if it's in your bank account. The longer you wait to collect on unpaid invoices, the harder it becomes, so spend a few minutes sending personalized follow up emails or making phone calls today. P.S. Clients not paying up? It may be time to dump them!

Turn your coins into gift cards: Have a huge coin jar tucked away? Take it to a nearby Coinstar machine and turn it into something practical (like an Amazon gift card) or a special little treat (like an iTunes gift card). Credit unions and some banks usually offer free access to coins-to-cash machines, so check in with yours!

How to Outsource Parts of Your Business- Even on a Tight Budget

When you first start growing your business, you’re likely dealing with a small budget and bootstrapping your way to success. While this strategy is smart for your finances, it’s not always smart to get overworked and do everything yourself.

Here’s how to leverage outsourcing, even when you’re on a tight budget.

how to outsource parts of business

Why Your Business Needs a Spending Plan

We all know that having a personal budget is vital, but do you have one for your business? A spending plan is just as important for you professionally as it is personally.

How? A business budget helps you see where your hard-earned money is being spent. Having a spending plan in place for your business, you can see what areas are bringing in the most revenue, and which ones aren’t worth the time or effort.

This will help you streamline your business expenses, cut out any non-essential spending and find better ways to save money.

Why waste your precious time and hard work by wasting money on things you don’t really care about, or on stuff that doesn’t give your business the most bang for its buck?

How Delegating Work Helps You Work Smarter Not Harder

As an entrepreneur, running a business of one, there are only two ways you can leverage your time:

  • Raise your prices
  • Outsource work to team members

That’s it. Those are the only two options for ensuring your business grows. Of course you could always work more hours, but then you’d probably have to sacrifice your health, sanity, time and freedom.

I’m pretty sure you didn’t quit your job or turn your back on the daily grind, to not have control of your time and schedule as a small business owner. In order to achieve your dream of creating a life of freedom and a business that funds your dreams, you’ve got to work smarter not harder.

That’s where outsourcing comes in!

Prioritize the Right Tasks to Outsource

When it comes to outsourcing work, or delegating tasks, there’s definitely an art to doing it. As any freelancer and small business owner will attest, you likely don’t have access to unlimited funds to hire help.

The key is to focus on outsourcing tasks that are directly related to bringing in revenue -- or that have the potential to. If you do marketing for a client by prepping email newsletters, a virtual assistant can format the content, or create templates. This will save you time, and help you focus on turning leads into sales for your client.

The more sales your client gets, the happier they will be, which means they’re perfectly primed for hearing your pitch about upping your prices.

Another example would be if you run an ecommerce shop. Having a shop that’s easy to navigate, and has the least amount of clicks for a shopper to complete their purchase, will create more sales. You want to work with a web developer who understands how certain colors or copy can affect sales, so you can see the best return on your investment (ROI).

When working with outside contractors and assistants, it’s vital you choose projects that can create revenue for themselves, so your up-front investment pays off.

Inexpensive Resources to Get Started

Like with any business opportunity, there are freelancers out there that charge a premium for their skills and talents. And that’s great if you really need that kind of help. But what if you just want a small task done, or a daily task completed?

There are lots of inexpensive resources for you to get started, whether you’re looking for someone to work with every month, or just a one-off deal.

Fiverr: Thanks to Fiverr, it’s now easier than ever to find experts who are willing to do random tasks for as little as $5 each. I recently needed several videos transcribed and hired someone from Fiverr. It only cost me $20 in total, but saved me over 3 hours of tedious work, and enabled me to spend my time doing other things -- like closing a new deal with a client.

TaskRabbit: This site is great for both business and personal use. If you’re too busy at work to pick up your dry cleaning or go grocery shopping, you can hire someone from Taskrabbit to do it for you. Likewise, if you need a delivery driver to deliver a load of goods to a vendor, you can hire someone from this site to help you out. No long-term contracts or hassle.

Twitter. If you’re interested in finding a tech-savvy assistant who knows a bit about social media and online publishing, then Twitter is a great place to look. I found both of my VA’s this way and now they are bonafide members of the Careful Cents team. We agreed to only a few tasks that cost less than $100 month, then we increased it as time went on.

Using these types of online tools is where outsourcing work can really be used to your advantage. Even if you don’t have a big budget for hiring a full-time assistant, you can spread work out among other experts and team members. Doing so enables you to use your time for more important things!

So what are you waiting for? Take the first step to outsourcing work today and see how much your business flourishes.

Do you outsource parts of your work? How has it benefitted your business?