What inflation should I use?

What you expect for the coming months. The latest published monthly inflation is a reference; if unsure, try two or three values and see whether the answer changes.

What if the installments are interest-free?

With any inflation above zero, interest-free installments beat paying the same price in cash.

Does it work for any country?

Yes: enter your country's inflation or what your money earns. The math is the same in any currency.

Installments or cash? Calculator

Paying in installments is cheaper when the total you pay, brought to today's money with inflation, is less than the cash price. With inflation, each future installment is worth less than today: if installments carry no interest (or little), paying over time costs less. This calculator brings each installment to today's value and compares it with paying cash.

How the comparison works

An installment of $100 six months from now isn't worth the same as $100 today: with inflation, that money buys less in six months. To compare, each installment is divided by the inflation accumulated up to its month ("discounted to today") and they're added up. If that total is below the cash price, installments win.

The same applies if instead of inflation you use what your money earns: if a deposit or fund pays more than the installments’ interest, pay over time and invest the rest.

An example with numbers

A fridge costs $1,200 cash or 6 installments of $220 ($1,320 in total, 10% more). With 3% monthly inflation, those 6 installments are worth about $1,192 today: slightly less than cash, so installments win.

With 1% monthly inflation, they would be worth about $1,275 today: more than cash, so paying all at once would be better.

What the math doesn't show

Installments commit your income for the coming months: add up the ones you already have before taking another.
If cash has a discount, use the discounted price.
Check the total financial cost if the installments carry interest.

How Busimy does it

In Busimy you add card purchases in installments and see how much is committed each month and until when, so you decide with everything in sight.

Frequently asked questions

What inflation should I use?: What you expect for the coming months. The latest published monthly inflation is a reference; if unsure, try two or three values and see whether the answer changes.
What if the installments are interest-free?: With any inflation above zero, interest-free installments beat paying the same price in cash.
Does it work for any country?: Yes: enter your country's inflation or what your money earns. The math is the same in any currency.