How a digital nomad mom of 2 used ‘geo-arbitrage’ to save thousands on food and childcare while working from multiple countries

Lona Alia and her family travel to countries that include Mexico, Albania, Croatia, Greece, Italy, Portugal, and Costa Rica, moving from one country to another every one to five months.

Lona Alia and her husband are digital nomads, working remotely while traveling the world with their children. 
They save money this way through “geo-arbitrage,” living in lower-cost countries while earning a US salary.
Expenses like food and childcare are much cheaper in the countries she visits than in the US, Alia said. 

Lona Alia has never liked being stuck in one country — particularly one as expensive as the US.

As a remote worker since 2018, she says she’s visited dozens of countries, lived in multiple continents, and learned seven languages over the past few years.

At the same time, she says she’s saved a lot of money through a time-honored practice that has become increasingly popular during the pandemic called “geographic arbitrage.” The term refers to living in a lower-cost country while earning income in a higher-paying country. 

But four years ago, she feared she’d have to give up the lifestyle she adored.

“Whenever I thought about having kids, I was worried that my life would end, that it would be over, and the fun would be cut short,” she told Insider. 

But then she and her husband decided maybe it didn’t have to be like that. 

“As soon as the first one was born, got him a passport, went transatlantic, landed in Germany, bought a car there, and started traveling for a while. It just was so fun exploring different countries, cultures, meeting friends in different places of the world. We really didn’t see a change in our quality of life.”

Alia is navigating a US economy with increased worker flexibility but also a rising cost of living. Even before inflation sent prices surging over the past year, the elevated costs of housing, healthcare, school, and childcare made the US among the most expensive countries to live in. The flipside of the high US cost of living is that the country’s median income is among the world’s highest, and this money goes further in countries with lower living expenses. 

This is among the reasons a growing number of digital nomads are traveling the world while continuing to work remotely for weeks, months, or — in Alia’s case — the foreseeable future. Nearly 17 million Americans describe themselves as digital nomads, a 9% increase from 2021 and 131% from 2019, MBO Partners’ 2022 State of Independence study found from a survey of more than 6,000 US adults, including 901 current digital nomads.

Not all locals are fans of the nomads frequenting their countries, for several reasons: Visitors often don’t pay taxes there, take up limited housing, and put pressure on an area’s environment and infrastructure, for instance. But these travelers can also boost the economy with their spending, among the reasons many countries are opening their doors and embracing digital nomad visas

Geo-arbitrage has allowed her family to save ‘so much money’

As Alia and her husband prepared to have their first child in 2018, they thought about how much it would take to raise a family in New York City or San Francisco — two cities they had lived in and enjoyed. 

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She estimated she would need to earn $500,000 to $1 million per year to have the lifestyle she wanted in the US. Since they don’t earn nearly that much now, they soon decided to look abroad for cheaper places to live. Today, their family — which has since welcomed a second child — travels to countries that include Mexico, Albania, Croatia, Greece, Italy, Portugal, and Costa Rica, moving from one country to another every one to five months. They also have a mortgage on a home in Miami where they stay between trips.

Alia and her husband have jobs that allow them to navigate this balance. Alia is head of revenue at SafetyWing, which has headquarters in San Francisco and Oslo and provides travel medical insurance for other international digital nomads. Her husband also works at SafetyWing, as an account manager. Alia declined to share any information about her salary other than the fact that they are a dual-income household.

Alia says the geo-arbitrage of living in lower-cost countries has allowed her family to save “so much money.” In New York City, she estimates that her family’s lifestyle would cost at least $10,000 across one or two months. But in countries like Mexico, Albania, and Croatia, it would only be $2,000 to $3,000, she said. 

“It’s potentially a tenth of the cost of the US,” she said. “Sometimes, it’s a third. It depends on the country.”

Her family mostly stays in Airbnbs, which allows them to limit their housing costs. Alia also says child care — which can cost thousands of dollars a month for two children in the US, only costs her family $200-$300 in Europe, for instance. Private childcare can cost between $23 and $250 per month in Mexico, InterNations, an online expatriates’ network, estimates. In comparison, the monthly childcare rate in the US is about $900 a month, according to a recent Care.com survey of 3,000 parents and guardians. 

And she says she and her husband can get a “really good” meal for $30-$50 that might have cost over $100 in the US. 

While they’re always on the move, she says her family limits their transportation costs by traveling as light as they can. They also look for walkable cities that allow them to get around without a car. 

She still pays taxes in the US, where she earns her income. The family returns to the US for a few months each year to ensure they can continue doing so.

Given they’re traveling all the time, her children, who are two and four years old, aren’t enrolled in a traditional education system. While they are young, she says they embrace “world schooling,” an educational philosophy that focuses on helping children learn and explore their interests through travel and experiences, instead of in a classroom. 

‘When you’re not bound by location, the world is your oyster’ 

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When the pandemic hit in 2020, it put a wrench in Alia’s nomadic lifestyle. Her family returned to the US that March and stayed with her parents. But “as soon as the borders opened” last year, they “got on the first” plane abroad to Albania — which she says didn’t have strict COVID measures in place.

“It was such a great life,” she said. “You could go outside, still be super normal, eat amazing food, live with $400 a month in terms of rent. We really took advantage of that.”

Moving forward, she says her family plans to keep doing this lifestyle for as long as possible. 

“Remote work opens this whole life for you and opportunity where you can live an amazing life anywhere you choose to because you are not bound by location,” she said. “When you’re not bound by location, the world is your oyster.”

Read the original article on Business Insider

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