How to save in a context of inflation?

In June, the inflation at the national level it was 1.19% and in Lima, the accumulated figure reached 8.81%, the highest rate since 1997, according to the National Institute of Statistics and Informatics (INEI). This increase has been felt in the pockets of Peruvians due to the increase in prices in transportation, restaurants/hotels and various goods and services. In total, in this same month, 426 of the 586 products that make up the family basket, registered a price increase.

This context of inflation can increase the level of spending of Peruvian families who may have to resort to their savings to cover this increase; however, even in the midst of economic instability, we could maintain the financial health of our household and save.

Recommendations to save

According to the Superintendence of Banking and Insurance (SBS), savings “It is the best way to achieve goals, prevent needs and face emergencies”, which is why Mapfre shares five recommendations from its Director of Investments and Treasury, Andrés Uribe, to save without affecting your quality of life.

1. Create a budget to plan expenses: Set up a monthly budget according to your salary. Write down the fixed expenses, such as basic services, cell phone plan, apartment rent and other expenses that do not vary. You can allocate a percentage of the remaining money to leisure, but responsibly and avoiding buying everything that you do not think is important so that the percentage of savings is not affected. Elizabeth Warren, an insolvency expert at Harvard University, mentioned the 50-30-20 formula to help manage money, that is, 50% for basic needs, 30% for leisure and 20% for savings.
2. Compare prices: In addition to the price of fuel, there has also been a significant increase in the prices of the basic basket both in markets and in supermarket chains. In this sense, it is best to review the prices of each product to be purchased one by one and compare between brands to find out which product is the most convenient for its price and quality. It would even be good to bet on the brands of the supermarkets themselves, which are generally cheaper than imported brands and are of almost the same quality.
3. Buy food in bulk: a cheaper and more environmentally responsible option. Buying fresh produce by weight not only reduces the ecological footprint (less packaging and less food waste), but it is also a cheaper alternative that can give many families a break.
4. Pay with debit card: According to researchers at Carnegie Mellon University in the US, “credit cards numb the pain of paying.” This happens because, as they mention in their study on neuroeconomics, people “swipe their credit card and it doesn’t seem like they’re giving up anything to make the purchase. For this reason, it has been shown that it is better to avoid the use of credit so that you have greater control of your expenses.
5. Invest in international funds: An interesting alternative for this context and long-term savings is investment in foreign funds. If we want to invest in an asset that generates profits for us, it is recommended to do so in a diversified and global fund. From Peru, you can invest in the United States, Asia or Europe. For example, Mapfre offers Multifunds Flex, an innovative product that has three types of funds that adapt to the profile of the person with high rates of return.