Financial Blog

Inflation isn't just an abstract number in economic news. It's that moment at the supermarket when you realize your usual cart now costs 10% more than last month. It's the feeling that your salary reaches for fewer things each time. And it's the most important challenge facing personal finances in Argentina.

But understanding inflation gives you power to combat it. First, you need to recognize that your money loses value over time. Those pesos you keep under the mattress or in an account without interest are losing purchasing power day by day. That's why the strategy must be twofold: protect your savings and optimize your purchases.

Strategies for your daily shopping

Start with the basics: keep a price record of your essential products. Note how much you pay for milk, bread, meat, cleaning products. This record allows you to identify when there are real increases and when it's just perception. It also helps you detect genuine deals.

Shop intelligently by taking advantage of promotions on non-perishable products. If you see a good deal on toilet paper, soaps or canned products, buy in quantity. You're getting ahead of future increases. But be careful: only do this with products you actually use and that won't expire.

Diversify your shopping places. Don't marry a single supermarket. Prices vary significantly between chains, and what's expensive in one may be economical in another. Price comparison apps are your allies.

Protecting your savings

For your savings, you need instruments that at least match inflation. Traditional fixed terms rarely achieve this. Consider UVA fixed terms that adjust for inflation, mutual funds investing in CER bonds, or a combination of different instruments.

The key is not to keep all your money in liquid pesos. Part of your savings can be in inflation-adjustable instruments, another part in assets that historically outpace inflation, and only what's needed for immediate expenses in cash.

List of concrete actions

• Create a spreadsheet with prices of 10 products you buy regularly and update it monthly
• Establish a flexible budget that contemplates 5-10% monthly increases
• Take advantage of deals to stock up on non-perishable products
• Research UVA fixed terms or money market funds for your short-term savings
• Consider instruments that adjust for inflation for medium and long-term savings
• Review your fixed expenses every quarter and look for more economical alternatives

Inflation is a challenge, but with strategy and discipline you can minimize its impact on your personal economy. The important thing is to act, not remain paralyzed watching your money lose value.

Imagine this situation: your washing machine breaks, you need to make an urgent car repair, or you face an unexpected medical expense. Without an emergency fund, these situations force you to go into debt with credit cards at very high rates or touch savings destined for other objectives. With an emergency fund, you breathe easy because you have the necessary backup.

How much do you need in your emergency fund?

The general rule is to have between 3 and 6 months of your essential expenses. But in Argentina, with our economic volatility, I would recommend aiming for the upper end of that range. Start by calculating your basic monthly expenses: rent or maintenance fees, utilities, food, transportation, medications. Don't include discretionary expenses like entertainment or subscriptions.

If your essential expenses are 100,000 pesos monthly, your emergency fund should be between 300,000 and 600,000 pesos. It sounds like a lot, but you don't need to build it overnight. The important thing is to start.

How to build your fund step by step

Start with a more achievable initial goal: one month of expenses. When you achieve it, celebrate and continue toward two months, then three. Dividing the big goal into smaller objectives makes it less intimidating and allows you to see progress quickly.

Establish automatic savings. As soon as you receive your salary, before paying anything else, transfer a fixed percentage to your emergency fund. Even if it's 5% of your income, it's a start. Treat this savings as a non-negotiable fixed expense.

Take advantage of extra income. That bonus, that freelance work, that gift of money: allocate them directly to your emergency fund. These unexpected incomes are perfect accelerators for your objective.

Where to keep your emergency fund

This money must meet two requirements: be immediately available when you need it, and protect itself from inflation as best as possible. It's a delicate balance.

One strategy is to divide it into layers: part in an easily accessible savings account for immediate emergencies, another part in a 30-day fixed term that you renew automatically, and the rest in instruments like money market funds that offer liquidity in 24-48 hours with better returns.

What you should NOT do is invest your emergency fund in stocks, long-term bonds, or any volatile asset. When you need that money, you're going to need it NOW, and you can't afford to wait for the market to recover.

Action plan for this week

• Calculate your essential monthly expenses by adding rent, utilities, food, transportation and health
• Set your initial goal: one month of essential expenses
• Open a separate account exclusively for your emergency fund
• Set up an automatic monthly transfer, even if it's 5% of your income
• Identify an expense you can reduce or eliminate to increase your savings capacity

Remember: an emergency fund is not for whims or investment opportunities. It's your safety net, your peace of mind, your freedom to not have to go into debt in case of emergencies. Building it requires discipline, but every peso you contribute is a step toward greater financial stability.

Credit cards and loans are designed to seem simple: "12 installments without interest", "loan approved in minutes", "preferential rate". But behind these attractive phrases there's a complex reality you need to understand before signing anything.

Deciphering the fine print

When you see a credit offer, the first thing they show you is the TNA (Nominal Annual Rate). But that number is misleading. What really matters is the TEA (Effective Annual Rate), which includes the effect of interest capitalization. The difference can be enormous.

For example, a 60% TNA can become a 79% TEA with monthly capitalization. That means if you borrow 100,000 pesos, after a year you'd end up owing 179,000 pesos, not 160,000 as the TNA suggests.

In addition to the rate, pay attention to: origination fees, mandatory insurance, maintenance commissions, early payment penalties, and late payment charges. All these costs add up and can double the real cost of your credit.

Interest-free installments: really cost-free?

The famous interest-free installments on credit cards are a useful tool if you use them correctly. But there are traps. First, the merchant has already included the cost of those installments in the final price. Second, if you don't pay the total on your statement, those purchases start generating very high interest.

The golden rule: only use interest-free installments if you can pay the total statement each month. If you only pay the minimum, you're falling into the most expensive trap in the Argentine financial system.

Strategy to evaluate credit

Before taking any credit, ask yourself these questions: Do I really need it or is it a desire? Can I afford the installments without compromising my essential expenses? What happens if I lose my current income? Are there cheaper alternatives?

Then, compare at least three different options. Don't stick with the first offer. Use online loan calculators to compare the total financial cost of each option. Often, credit with higher installments but shorter term turns out cheaper than one with low installments over a long term.

If you already have debts: exit plan

If you're already in debt, you need an exit strategy. First, make a complete inventory of your debts: total amount, interest rate, monthly installment, remaining term. Organize them from highest to lowest interest rate.

Focus on paying off debts with the highest interest rate first while maintaining minimum payments on the others. This strategy (called avalanche) minimizes the total interest you'll pay.

Consider consolidating debts if you can get a loan with a lower rate that replaces several expensive credits. But be careful: this only works if afterward you don't use those cards again to generate new debt.

Concrete actions to implement

• Always ask for the CFT (Total Financial Cost) before taking any credit
• Calculate how much you'll pay in total, not just how much the monthly installment is
• Read every clause of the contract, especially penalties and insurance
• Compare at least three different offers using CFT as a metric
• Never pay only the minimum on your credit card
• If you have multiple debts, prioritize paying those with higher interest rates
• Before taking new credit, ask yourself if you can wait and save to pay cash

Credit is not your enemy if you use it intelligently. But it requires education, discipline and an honest evaluation of your payment capacity. Don't get carried away by the emotion of immediate purchase. Think about the real cost and the long-term impact on your personal finances.