Here’s a cool idea for getting by in a down economy: bartering. If you’re like me, the last time you thought about bartering was in the ancient middle east unit in world history class in high school. But don’t write it off just yet; there are a lot of advantages to bartering.
You don’t have to be the best at everything
If you’re really good at handy-man type repairs, you could trade it for some computer work. If you have a freezer full of beef, you could trade some of it for lawn work. If you’re fluent in French, you could teach someone else in exchange for car repairs. If there is something you can do, you can probably trade it for something you suck at. If you have something, you can probably trade it for something you don’t have.
No sales tax
Quick math problem: at 6%, how much sales tax would you have to pay on that one-hour French lesson? None, right? Just about any good or service you buy in a store or through a service provider will require that you pay sales tax. But with bartering, no money has changed hands, so there isn’t anything to tax. The more you barter, the more sales tax you don’t pay. This is not true with regard to income tax, however. You are legally required to report bartering activity to the IRS.
The benefit to bartering that is the most difficult to quantify is the effect on the relationship between the two parties. And being difficult to measure makes the benefit immeasurable. If you’re known as the guy that can get a dead car running in the middle of winter, people will want to keep you around. If you’re known as the guy that can thaw a frozen computer and retrieve thousands of dollars in invoices, people will be glad to get to know you. These kinds of bonds help to form a tight support network that is difficult to fall through.
So think about things you can do or make, or things you have stockpiled, that other people might want. You may find yourself saving some coin, and also becoming an integral member of the community.
This article originally appeared in the March 4, 2009, edition of the Greenhorn Valley View.