Upon arriving to a new country, one of the first things one must do is change money to obtain the local currency. Normally, if one is visiting for a relatively short period of time, a month or less, one never stops thinking about the exchange rate when making purchases or spending money.*
*Sidenote: This is a little more complicated in Argentina due to the parallel, "blue," market (which arose due to the government restriction on the purchase of US dollars ). "Hmm... 250 pesos... that would be about 50 US dollars at the official exchange and about 28 US dollars at the "blue" rate..." Also, while it is technically illegal to buy or sell dollars on the "blue" market (not really different from the black market, but it doesn't sound as sketchy), it is the most popular option for changing dollars, or any other foreign currency, to Argentine pesos. Another day I'll explain more about the "blue" dollar.
Now, if one makes a longterm move abroad, one typically begins to think in terms of the local currency after a few months of living in his new country, especially if one receives his salary in the local currency. This is not the case in Argentina, however. After having barely survived several financial crises and bouts with hyperinflation, Argentines with means have learned to think (and save) in dollars. Honestly, there is no other way to understand the value of a product or service because the prices are constantly changing, and by changing I mean rising... To give a tangible example, when I first arrived in Buenos Aires, I could buy a 600 mL (about 20 ounces) Coke for seven pesos; now, at the same convenience store, a 600 mL Coke costs 9 pesos, a 28.5% increase in price over seven months. Many stores and restaurants don't even bother printing their prices, most are written by hand because businesses are forced to raise their prices so frequently. Obviously, rising prices are more noticeable for more expensive goods, but the percentage change is still about the same across the board.
Instead of going into detail about the interesting dollar/peso mindset of the Argentine, I figured it would be more effective to translate a recent article from the August 18th Revista La Nación, a weekly magazine published by one of the major newspapers in Argentina. The article was taken from a recently published book by Mariano Gorodisch, an Argentine finance journalist, called 60 Options to Invest in Pesos and Save in Dollars (60 opciones para invertir en pesos y ahorrar en dólares). While some suggestions are fairly universal and applicable in the US as well, others are, well, very unique to Argentina...
"10 more or less known, but effective, tips to beat inflation"
1. Book an all-inclusive
Since it's required to request validation in order to acquire foreign currencies when traveling abroad, it is more convenient to book all-inclusive vacation packages, paid in full in Argentina in pesos at the official exchange rate plus a 20 percent tax. That way one knows how much one is paying without risking an increase in the official exchange rate, which is what happens when one "cards,"or pays with an Argentine credit or debit card abroad (money also changed at the official rate plus a 20 percent tax). And if AFIP, the Argentine tax agency, authorizes the purchase of 70 dollars per day, the traveller who stays at an all-inclusive can save those dollars.
2. Make "pre-purchases" by internet before traveling abroad
The prices in Miami are already more economical than those in Argentina. Recently, many travelers have begun to take advantage of this by buying clothing and technology online from our country before going abroad. This way, they can pay at the official dollar and then pick up their goods once they are in the United States
3. Shop around at different supermarkets
One good way to save money daily, if one has the time, is to go to the supermarket like one goes shopping for clothes, except with one's re-usable grocery bags. There is not any one supermarket which offers the cheapest prices in every product. Some are cheaper in some product families while the rest are cheaper in others. The savings of up to 30% is the difference in the price of soda between the most expensive supermarket chain and the cheapest, while in products such as whole milk and diapers one can save 20%, according to tu-alacena.com.
4. Anticipate your funeral
For those who bet long-term, planning their future even after their death might sound appealing. Cemeteries offer finance plans with monthly payments so that when the day comes, the survivors won't have to be paying upwards of 17,000 pesos for a memorial and burial service.
5. Save in safes
It has been predicted that by the end of 2013, both the official and the parallel dollar will likely increase by 30%. Thus, having bills well hidden and accessible when needed could render 30% more.
6. Buy land on the moon
A gift for the grandchild: one 4000 square meter property on the moon. It’s for sale for $19.99 US, plus $1.51 tax and an additional $2.50 to have your name printed on the satellite picture. Shipping anywhere in the world costs another $12.50. In total, $36.50 for the property title. 1741 Argentines have already done it. They are betting on a future revaluation.
7. Cooperatives which pay a 40% annual fixed rate
The investor earns monthly interest but should wait 12 months to recover his capital. The minimum investment is 20 thousand pesos or 5 thousand dollars, but the majority invests an average of 100 thousand pesos.
8. Buy an apartment with an old person inside
Rosa, an 80-year-old childless widow, receives a monthly retirement payment of 2500 pesos, which doesn't even cover her medications. She owns an apartment valued at 100,000 dollars; she wanted to sell it to buy a smaller one and keep the difference, but the real estate market is almost paralyzed. She made a full life-long usufruct agreement: the investor keeps the property title but gives her the right to use the apartment until her last day on earth. Rosa receives 800 dollars per month, plus what is spent on taxes and expenses, and the investor spends 1000 dollars (for the real estate agency costs).
9. The ol' black and yellow
With inflation, the taxi business puts investors in a win-win situation. The profitability is between 30 and 40% annually, without including the appreciation of the license (since there is a limited amount, their value increases with each tariff raise).
10. Telephone, electricity, IVA (tax)
It seems obvious, but... it's better to go over it again. The most expensive time to talk is from 10 a.m. to 1 p.m., and the cheapest is from 10 p.m. to 8 a.m. Constantly opening and closing the refrigerator leads to a higher consumption of electricity. Also, one can save 4% (IVA tax) daily on every purchase paying with a debit card.
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