My interest was piqued today when I saw a front page article on Yahoo about saving money by bartering. Not only did I see that article, but this weekend was talking with a local business owner that uses it to pay for so many things locally. It’s not just a great way to save money, but also a way to help out others in your community.
If you haven’t thought about bartering, you may want to consider learning more about it and maybe participating in it yourself. Let’s start at looking at what bartering is.
What is Bartering and How Does it Work?
Bartering is a way of acquiring items or services through trade. Using money to buy goods is actually a form of bartering, but a form where you are using dollars to barter. Traditional bartering took place before money was even invented. People would take any food or crafts to a local marketplace and try to trade them for other things that they needed. Back then bartering was important because it let people focus on what they were good at and allowed society to be more productive.
Today, bartering has become popular for two reasons. First, because you can do it with used good and it is a frugal (popular) thing to do. And second, because it is great for the community. Basically, any goods or services that are bartered are going to other local people or business, and not being taken out of the local community.
In our location, there is a company that facilitates bartering. A company or individual can agree to a barter transaction with another party. When the transaction is complete, the party that performed the service is given barter bucks by the facilitator, and the barter account for the person that recieved the service or goods has the credits subtracted from their account. Once you have the barter bucks, they are good at many participating businesses and service companies. For example, my friend provides IT services to people and recieves barter bucks. He can then use these to barter for cleaning services, at restaurants and many other local businesses.
You’re probably wondering why someone would go through the bother of using barter when they could use money much more easily. Well, first of all, the barter transactions are not always considered cash and often are not considered taxable. This can save you 30-40% in taxes alone. And second, by joining the barter network you are more likely to find new customers, because others in the network will look to other barter members first when they are seeking goods or services.
The type of barter I just discussed is a more advanced barter system. If you are just an ordinary person looking to save money, there are more simple ways to barter.
For starters, websites like craigslist specialize in barter transactions. There are many other similar websites that focus on bartering. In my opinion, it doesn’t make as much sense as the business bartering. That’s because the odds of having something to trade for a specific item you need seems like a hard match to make. I think I’ll stick with using craigslist to sell my stuff and then use the cash from the sale to buy what I’m looking for again on craigslist (or other local site like freecycle).
I hadn’t really thought much else about bartering until I watched the video on Yahoo this morning. Not only did she recommend using craigslist, but she also suggested having a barter party where your friends all bring things and then you trade. I guess this could work if it was something specific. Like, if you did it for your kids toys, or for video games or something that is easy to trade. Clothing, like she recommended, unless for children, would be difficult to find clothes that fit.
Anyway, the video was by Farnoosh Torabi at Yahoo News. Here is an excerpt from what she had to say:
Torabi says there are some online services that bring prospective barterers together. She also suggests would-be traders can host a swap party where each attendee brings a few goods to pitch. But successful bartering comes down to creativity, Torabi says. So if you don’t have things to trade, you can also barter professional skills or knowledge in exchange for babysitting or tutoring for the kids.
Done correctly, bartering is a win-win for the participants. And it can bring your community and neighbors closer together.
You can watch the entire video about bartering at bartering – an age old way to save money.
I have never personally bartered as an adult. I used to trade stuff with the neighbors when I was a kid and was pretty good at it. I wouldn’t mind selling services for barter bucks in my location, but not quite sure what I could sell.
Have you ever bartered or do you have an opinon on this? Let us know with a comment.