Saving in times of inflation

Being in Argentina at this moment in time is somewhat of a special experience. The state is basically bankrupt and inflation is daily on the rise. For us volunteers it is not that much of a problem as we do not have much expenditure anyway besides for leisure. We are provided with food and accommodation. We also have our money in Euro accounts and we can get only as much money out (or exchange as much money) as we need for a couple of weeks or so. So if the Argentinean Peso suddenly gets devalued we might lose 50 or 100 Euros, at worst.

But what do Argentineans do who do not have this luxury? What if your salary or wage does not keep up with inflation and meat prices suddenly double from one day to the next? What if you cannot go to the butcher and ask for 1 kg of beef anymore but have to ask instead how much beef you can get for X Pesos? And even worse, what do you do with all your savings that you have in Pesos when they lose a fraction of their value every single day?

The access to foreign currencies is very much restricted for Argentineans. There is only a set amount of Pesos that you can (officially) exchange into Euros or Dollars every month – and that is only if you have a high enough salary and a secure job in the first place. Everyone else (or if you would like to exchange more than the monthly limit you were given) would have to switch to the black market – which means worse rates and higher risks (of being given counterfeit notes or being caught by the police).

Moreover, even if you can save money in Dollars in an account, it is risky. Given the unstable economic situation you cannot be sure to have access to your money in foreign currency should a crisis arise. This happened in the early 2000s when the government restricted people’s access to their savings in Dollars. Many people lost out big time...So cash is, to a certain extent, a reasonable option...

Despite all these problems, saving in a foreign, stable, currency is the only way to ensure that you can reliably build up savings at all. Before coming to Argentina I never really thought much about how to save. I just put parts of my earnings in a savings account or similar, got my interest on top of that and that was it. Here, you have to learn how to play the game; make decisions on whether to spend your money straight away or find alternative ways (i.e. foreign currency) to save up a larger sum. A whole new experience...