There was an interesting post some time ago in the Financial Uproar blog called The Financial Planning Affordability Paradox which noted that the people who could most benefit from financial planning advice are the least likely to be able to afford it.
I fully agree with Nelson that when someone is up to his or her ears in debt and looking for a plan to manage and reduce it hearing, “Sure, I can help you. That will be $1,000 up front, please,” (yikes!) will likely make them back off rather quickly.
It puts me in mind of my relationship with my 24-year-old niece. You see, I’m a complete computer dufus. Anything that can go wrong no doubt will, especially when what I’m doing is time sensitive. “What did you do?” is a question I hear from my husband all the time.
So, my go-to person is my niece. As are many people her age, she is a computer whiz, and most of all she’s very patient.
“Call me anytime, Auntie. I’ll take a picture of the screen with my phone so you can see what it’s supposed to look like.”
In return I help her with her finances.
A couple of years ago she landed a lucrative position in the oil patch earning a salary almost twice what my husband and I had earned together. She’s quite a good spender, and I know she doesn’t always accept my advice. Nevertheless, she owns a condo, a brand new VW Tiguan, and has a pretty decent RRSP/TFSA portfolio for her age.
When she paid off her car loan I recommended that she put the equivalent amount into savings. This was not bad advice considering she was laid off from her job in the late spring and was evacuated when a forest fire decimated her city.
She’s now living with Mom and Dad again and working at a temporary job until, she hopes, she will be called back. I’m sure things will work out just fine for her.
This arrangement used to be called bartering.
Back in pioneer times, neighbours would use their skills to help each other build a soddy, then a log home and raise a barn. Afterwards, they had a big party.
Similarly, today friends and neighbours – especially valuable are those in the trades, such as electricians and plumbers – help each other develop the basements in their new homes. Afterwards, they have a big party.
The exchange of goods and services rather than paying cash for things you need is a concept that is still alive and well today.
Sally bought a new gas barbeque. Evan is a pipefitter with the necessary tools. In exchange for setting it up, Sally bakes a cake and organizes a birthday party for Evan’s preschool daughter.
Cashless transactions provide a mutual benefit to both parties. It’s a creative way to lower expenses and/or save money.
Final thoughts on bartering
Do you have a special skill set, or do you own something that someone else wants? Trade it for something that you need.
Kids have a way of figuring things out when they want something badly enough – everything from trading lunch items at school to the ultimate deal, “I’ll do your chores/let you play with my Gameboy/give you my allowance – if you don’t tell Mom!”
Why does this stop when we become adults? We either pay the price or do without.
With bartering, two parties can get something they want or need from each other without having to spend any money.