Barter Your Way to Financial Savings

Remember the barter system? You probably learned about it in school. Well guess what – it’s back. If you need your car worked on or maybe the inside of your house painted ask yourself what you could trade or what services you could provide in order to get those things done. And the best part is, you won’t be spending money, you’ll either be using a skill that you have to proffer or trading something you don’t need. It’s easy but first you must figure out what you can offer.

Maybe you can write resumes or teach swimming classes or guitar classes or perhaps build book shelves. That’s a start. Maybe you have some artwork or a stereo that you don’t need, that might work too. It’s all about getting involved, networking with other people who are also bartering. You can easily do that by registering at sites like Friendly Favor and Time Banks. The sites are free and you’ll immediately be able to hook up with people that need services just like you.

You could also make a list of all your friends, business associates and colleagues. Think about what they can offer and what you can provide to them – the hard part is asking. But in these difficult economic times most people are game to swap something in order to get something of value in return. For instance, you may know someone in your neighborhood that has a pet and they may be handy around the house. Why not ask them to help you hang shelves or fix the locks on your doors or whatever you may need, and in return you will walk their pet for a week or two and care for their pet when they are on vacation.

There are some precautions you should take when using the barter system. For one thing if you are bartering with someone to work on your car make certain they are an accomplished mechanic. That goes for any type of skilled work. You don’t want to swap something and find out that the person is an amateur. Also, treat your bartering as a business deal. Get everything in writing and be specific about the details, such as the time frame and set a deadline. Make sure you have a document that you can both sign, unless it is minor bartering between neighbors, such as swapping weeks that you pick up your kids from school.

If you are trading things that you own such as furniture, artwork, electrical equipment or whatever it may be, get a monetary value on the items. Don’t short-change yourself. If you are giving value you want value in return. There is also the issue of taxes. Bartering between businesses is taxable income, so you may want to speak with your accountant before you begin bartering.

The goal should be to set up a network of people that you can continuously barter with and trust to get the services that you need done and at the same time save money. And they too will be getting something of value that you can offer, and that should make you feel good about yourself.

About the Author

The following post is from Kathryn Katz, a Certified Personal Finance Counselor who works for Consolidated Credit in Ft. Lauderdale, Florida. Their non-profit agency helps families through financial crisis using credit counseling, debt consolidation and financial education.