An interesting local idiom in Argentina is plata. When referring to money or cash, plata (silver in English) is often invoked. Plata makes the world go round, so here is a little background on our experience thus far as it relates to financing our sabbatical and now living in Argentina.
For the past few years our lives have been dominated by saving money for our year abroad. The path we took to build this nest egg and subsequently spend it has been fascinating, while turning my rapidly eroding hairline more gray each day. Building a realistic budget from scratch and then watching it evolve over the past 7 months has been both stressful and satisfying. After much research and financial planning, we established a savings level we needed to achieve by the time I quit my job. As the weeks and months ticked by in early 2013, every paycheck and Craigslist sale became more and more critical to our goals. Erica and I were both surprised at how quickly the savings piled up once we had actually set a firm goal and timeframe as opposed to saving with no purpose. It was a wonderful reminder of how critical setting goals can be.
Transitioning from saving and earning to spending with no income to speak of has been an interesting psychological experiment. One might compare the process to climbing a mountain. The ascent was long and arduous to the summit, but descending can be just as difficult and potentially hazardous. It was sobering to see my final paycheck and realize our savings was complete. Of course we had rental revenue to counter our mortgage and storage costs in Portland, but I had no idea when the next time I would earn a paycheck might be. We had spent so much time planning and being frugal, and now the time had come to actually begin spending.
After 7 months I’m happy to report we are tracking very close to our budget targets. I’m more than a little surprised. Despite this, Erica can attest that every few months I have a sudden panic attack and dive into our budget for an hour to reassure myself. However, given how much initial guesswork was involved, I’m thrilled at how close we are. I update our budget spreadsheet about once a month to account for remaining savings against anticipated future expenses, both in the States and in Argentina. I’m constantly monitoring how we are trending against our estimates. Our budget target continues to be impacted by changes in the exchange rates, inflation and how much work Erica manages to find teaching.
One of our biggest adjustments we encountered from the start was living solely on cash. We needed to develop a system to manage cash and keep our budget on track. Given fees and exchange rate issues, it’s far better to only spend cash rather than cards here. Adjusting to a world where we don’t allow ourselves to run to the ATM or pay with a credit card was difficult initially. An added level of complication with cash is security. Cash is used far more extensively than credit or debit in Argentina, perhaps exacerbating theft and robberies that grab the headlines here. We try to minimize the amount of cash we have on us or in the house at all times.
In order to track what cash we’re spending on what line items, we went with a highly sophisticated envelope system. We have five weekly categories I refill each week: groceries, dining out, transportation, cleaning and miscellaneous. These account for just under $300 per week. So far we like this system so much we’re considering how we might adapt to 100% cash back in the States. Using only cash certainly has made us more aware of how much we spend and forces us to be more prepared and thoughtful each time we leave the house. The upside certainly comes with some inconveniences though. Grocery shopping can be slow and tedious since it’s necessary to bring a calculator along to ensure we don’t have an embarrassing shortfall at checkout. Trips outside of the city have been difficult to estimate exactly how much cash to bring along.
The cost of living in Cordoba has been better than we had hoped. While a terrible thing for Argentines, the weak peso has allowed us to stretch our hard-earned dollars farther than we had planned. We have had to adjust our way of thinking in order live on cash alone as well as store, spend and access our hard-earned dollars in a country that makes access to dollars difficult. While it can be hard to watch the chaos that is the Argentine economy, it’s morbidly fascinating while we get a close up view of a currency crisis in progress. Carefully managing our own plata in Argentina is just part of the adventure.
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