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.

Bartering for Goods and Services

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.

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11 Comments

  1. Dave Dineen on July 6, 2016 at 5:28 am

    Please explain how a daughter living in a basement is bartering. The article gives no indication of what she’s doing for her parents.

    • boomer on July 6, 2016 at 9:41 am

      OK, Dave. The barter was between me and my niece, i.e. financial advice in exchange for computer advice.
      As an aside (and not really part of what I was saying here) her Dad is staying in her condo for the time being as he still works in Ft McMurray, so in effect they have traded homes.

    • Tracy Anatole on July 11, 2016 at 10:40 pm

      The bartering is between the writer and her neice. Plain as day; neice helps with her computer skills and in return aunt helps her with her finances.

  2. Lotar Maurer on July 6, 2016 at 7:39 am

    Unfortunately our government still taxes the value of he bartered goods/services. Evan has to report the “income” from his barbecue pipefitting services, as does Sally from her party planning services, and pay tax on that notional income. And neither can deduct the cost/expense of paying the other from their own income, since neither expense was cured for the purpose of earning income.

    In this approach government stifles the sense of community and neighbourliness that was the underlying premise between the start of the original “helping your neighbour”.

    • boomer on July 7, 2016 at 10:01 am

      @Lotar Maurer: Technically you are correct about income tax on market value of the goods and services and I can see where this can come into play with people who do this regularly – almost as a business – such as those using online barter and trading sites.
      But, occasional and casual trading has been done for decades (centuries?) and I can’t see the tax police peeping through your keyhole to check the value of that skateboard you’re swapping for a file cabinet clean out.

  3. Catherine on July 6, 2016 at 9:51 am

    G’morning. Regarding bartering goods ‘n services, what are some guidelines to remember when deciding what is exchanged? Say you need an hour’s worth of plumbing repair, would it be reasonable to exchange an hour’s worth of producing baked goods? Many people find this part confusing as they perceive the worth of those two ‘trades’ as being quite different. Thoughts?

  4. Financial Canadian on July 8, 2016 at 8:03 am

    It’s interesting to see your point of view on this. I have personally always been a supporter of bartering because we’re often able to leverage our skills to achieve better value than if we were paying with cash.

    Can you think of any notable ways in which you’ve saved money through bartering?

    FC

  5. Catherine on July 8, 2016 at 9:11 am

    @FC: I once received significant help from a male friend who changed my old car’s brakes, rotors and struts. I ‘helped’ with the repairs as best I could, babysat his little daughter, and later on offered a used VCR, kid-friendly tapes and cute little girl clothes. Oh, and I baked a few dozen ‘world-famous’ chocolate chip cookies. For the strut replacement, you need a special tool to compress the coil. I purchased that tool and encouraged my friend to keep it after the repair, as part of our creative barter.

  6. Jim on July 11, 2016 at 11:41 pm

    Hard to see anything much about bartering at all in this article.

    “This arrangement used to be called bartering”. What arrangement? Her living at home with her parents? Really?

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