What It Really Costs to Be a Digital Nomad (and Why So Many Millennials are Doing It)

You’ve probably seen it: a perfectly posed photo of a laptop, a fresh coconut to its side, and a stunning tropical backdrop just in the distance. Something along the lines of “office of the day” captions the photo, and a pang of jealousy hits as you scroll through the rest of the carousel from the confines of your beige office cubicle.

Digital nomadism has caught on in recent years thanks to the rise of remote work. Now, for the lucky few with flexible jobs, their office can be anywhere in the world, as long as there’s coffee and reliable WiFi. This unconventional lifestyle is most popular among Millennials, many of whom are taking advantage of the freedom that remote work offers. But how do they afford hopping from country to country, staying in lavish beachfront villas and high-rise apartments with infinity pools? Let’s take a closer look at what really makes this lifestyle possible, and what it actually costs.

They Repurpose Their Rent

By far the most significant factor in making the digital nomad lifestyle financially viable is that many long-term travelers don’t have a permanent lease or mortgage. Instead, the money that they’d typically spend on rent goes toward their rotating accommodations abroad, and in countries with a lower cost of living, that budget goes surprisingly far.

Imagine paying $2,500 a month for a one-bedroom apartment in New York City. Now compare that to what $2,500 can get you for a monthly stay in Lisbon, Tulum, or Bali, usually a fully furnished villa, weekly cleaning, and maybe even an oceanfront view. While this kind of currency arbitrage comes with its own set of problems, digital nomads are often blamed for inflated prices and displacing locals, it’s the basis behind the financial model that makes the lifestyle work.

Trading Car Payments for Plane Tickets

Many digital nomads don’t own a car, which is another major factor in stretching their monthly budgets. In 2024, the average monthly car payment for Americans hit $745, meaning that not owning a car can easily fund multiple flights. Add in insurance, gas, parking, and general maintenance, and the savings that can be put towards living in a new city every month grow even more.

While some destinations around the world do require renting a car, the most popular nomad hot spots are generally in cities with strong public transport or are small, walkable beach towns. When the place you call home changes every few months, owning a car not only doesn’t make financial sense, but it can actually slow you down.

A Minimalist Lifestyle Helps the Budget

It might be tempting to fill up on souvenirs on every trip, but when your suitcase needs to fit all of your worldly possessions, you’ll start to think twice about what it is that you really need. To survive the digital nomad lifestyle, it’s necessary to adopt a minimalist lifestyle. Capsule wardrobes, multi-purpose outfits, and only one or two pairs of good, high-quality shoes become the norm, because that airline weight limit comes at you fast. Plus, nobody wants to lug around multiple suitcases when you are headed to the airport every couple of weeks.

While it might sound like a sacrifice, many nomads are surprised by how much they come to appreciate this simplicity. It’s common for people to put their stuff in storage before setting out to travel for a few months, only to realize later that it wasn’t worth paying to store any of their junk. Many of these nomads eventually make a pit stop back home to sell everything off before heading back out on the road feeling a little lighter.

They Strategically Choose Each Location

Long-haul flights can be one of the bigger upfront costs of this lifestyle, but many nomads have found ways to keep their annual travel budgets under control. Some practice “slow-mading,” which means staying in one place for several months at a time in order to avoid constant flights, and which also allows them to take advantage of long-stay accommodation discounts. Others plan their routes geographically, spending entire seasons on one side of the world before moving on to the next.

Many nomads also play the credit card miles game, using points to score discounted flights, free upgrades, and the occasional first-class ticket. Others take the opposite approach, living simply, taking local buses instead of private taxis, and skipping splurges like dining out for every meal or using food delivery services. Combined, these small habits help stretch their budgets and make the nomadic lifestyle sustainable in the long run.

Bottom Line

For many Millennials, the appeal of the digital nomad lifestyle comes from designing work around life, not the other way around. While traveling nonstop and visiting dozens of different countries might seem like an extravagant lifestyle, the truth is that with a little planning, it doesn’t have to be. It takes some discipline and sacrifice, but trading expensive fixed costs for the freedom to spend each month in a different corner of the world is worth it for many — and in some cases, it even ends up being the cheaper option.