# How to save when your currency is losing value

> Saving in a depreciating currency is saving backwards, and outside advice ignores that. How to think about saving in two currencies without being a trader.

_Multi-currency · Published 2026-09-02_

Almost all savings advice in circulation assumes a stable currency: you put money
away, and in two years it's worth roughly the same. Where the currency loses value
quickly, that premise doesn't hold, and following the advice literally means
saving backwards.

This post doesn't say what to invest in. It says how to think about the problem
and how to keep track — which is the part that does transfer.

## First: separate the three jobs your savings do

The opening mistake is treating "savings" as one thing. It's three, and each has a
different requirement:

**The immediate buffer.** For what happens this week. Requirement: available
today. It sits in the currency you spend in, and it's small on purpose — one
essential month at most.

**The emergency fund.** For losing your income. Requirement: available this week,
and it mustn't melt. This is where the currency decision starts. Sizing it is in
[emergency fund](/en/blog/emergency-fund).

**Long-term savings.** For years from now. Requirement: preserve value. Liquidity
matters less.

Putting it all in one place means optimising for the wrong requirement: an
emergency fund that's locked up isn't an emergency fund, and long-term savings in
cash in a depreciating currency aren't savings.

## The rule that does generalise: save in the currency you'll spend

It's the only rule that holds without recommending any instrument.

If you'll use that money for an expense in your local currency — a medical
emergency, a month without work — holding it in a hard currency adds conversion
risk at exactly the moment you don't want risk. If the expense is in a hard
currency — a trip, imported equipment, studying abroad — the opposite applies.

That's why emergency funds usually end up split, and that's fine: a liquid portion
in local currency for the immediate, the rest in whatever preserves value.

## How to keep track without going mad

This is where record-keeping matters more than in any other context, and where
almost everyone makes the same mistake: **converting everything into one currency
and recalculating.**

Three rules:

**1. Log each movement in the currency it happened in.** You bought 200 dollars:
that's a movement of 200 dollars, not of what they cost that day.

**2. The conversion locks to the day of the movement.** If it recalculates at
today's rate, your history changes size every time you open it and stops being
useful for comparing months. The reasoning is in
[tracking two currencies](/en/blog/tracking-expenses-in-two-currencies).

**3. Buying foreign currency isn't an expense.** It's a change in the form of your
own money, like moving it between accounts. Logged as an expense, it inflates the
month and makes the savings disappear from your balance.

## What not to do

**Measuring progress in the depreciating currency.** Savings that "grew 40%" in a
year when prices rose more didn't grow.

**Chasing the exchange rate.** Buying and selling on the day's number is a
different activity from saving, with a different risk profile and a different time
commitment.

**Giving up on saving because "it makes no sense at these numbers".** That's the
most expensive conclusion: the habit is the hard part to build, and instruments
can be switched in an afternoon when the context changes.

## In one line

Separate the buffer, the emergency fund and the long term, because each asks for
something different; save in the currency you'll spend it in; log every movement
in its own currency without recalculating; and don't count buying currency as an
expense.

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