The basic tension
Your costs are almost all in rupees: rent, utilities, school fees, groceries. Your savings may sit partly in dollars because that is how clients pay, or because you want protection against the rupee falling. Both instincts are reasonable, and they pull in opposite directions.
What rupees do well
- They pay bills directly. No conversion, no spread, no waiting for a transfer to clear.
- They can earn profit. Rupee savings accounts and similar products usually pay some profit. Rates change with State Bank policy and between banks, so compare current terms rather than relying on any figure you saw months ago.
The risk is that inflation in Pakistan has at times run high, and the rupee has lost value against the dollar over long periods, sometimes sharply. Profit on a rupee account does not always keep up.
What dollars do well
- They have historically held value better against the rupee over long stretches. That is history, not a promise: the rupee can also be stable or strengthen for a while.
- They match dollar costs, such as software subscriptions, if you have them.
The risk is the opposite one. A dollar balance often earns little or nothing, and to pay rent you must convert. Each conversion costs a spread and sometimes a fee. If you only convert when a bill is due, you take whatever rate that day offers, and you may be waiting on a transfer when the landlord is waiting on you.
A simple rule: two months of fixed costs in rupees
One practical approach is to keep about two months of fixed costs in rupees and let the rest sit in whichever currency you prefer. Two months is enough that you are never forced to convert dollars in a hurry at a bad moment, and small enough that most of your buffer still follows your own view on the rupee. It is a planning heuristic, not investment advice.
A worked example
Made-up numbers. The rate of 285 is an assumption for illustration, not a current rate.
| Total cash: PKR 420,000 + $1,800 | PKR 933,000 |
|---|---|
| Fixed costs a month | PKR 173,500 |
| Rupee share: two months of fixed costs | PKR 347,000 |
| Free to hold in dollars | PKR 586,000 ≈ $2,056 |
This person already holds PKR 420,000, a little more than the rupee share, so nothing needs to move.
When to adjust the rule
- A big rupee payment is coming, such as a rent advance, admission fees or a wedding. Hold that amount in rupees on top of the two months.
- Your conversions are slow or expensive. If getting dollars into rupees takes a week, a larger rupee share is safer.
- You have real dollar costs. Keep those in dollars so you do not convert twice.
- Your runway is short. If you have under three months in total, the split matters less than building the total. See the guide on emergency funds for freelancers.
Practical points
Hold foreign currency only through regulated banks and legal channels. Rules on foreign currency accounts, freelancer accounts and how much of your earnings you can keep in dollars are set by the State Bank of Pakistan and individual banks, and they change, so check the current position with your bank. Avoid keeping large amounts of physical cash at home in either currency.
Finally, rebalance on a schedule, say once a month when you check your runway, rather than in reaction to news. Trying to time the exchange rate usually turns a simple rule back into a daily worry.
If you want to track this every month
The calculator is free and complete for a one-time check. If you would rather keep a monthly record, the Runway OS workbook ($25, Excel or Google Sheets, with a 12-month tracker and a two-page guide) does that, and Lite ($9) is a single sheet with the same core numbers. They are new, so there are no reviews yet.