Bartering Saves Cash

by Deborah Jeanne Sergeant

Related Articles

Barter Your Way to Savings

Beginning to Barter

Be Smarter: Barter

"I'll trade ya!"

Beyond being schoolyard banter, these words represent the basis of how individuals and businesses acquire what they otherwise couldn't afford.

An excellent arrangement for people with time and/or goods but little cash, bartering can help you get what you want and meet another person's needs, too.

Although bartering tends to strike deals that trade either services or goods, bartering can include trading a service for goods. A friend of mine has traded his skill in upholstering a sofa to get a used hot tub from the sofa's owner.

Bartering often involves a complementary symbiosis. A local bar offers free parking spaces to a snowplowing/towing company, which in turn plows the bar's lot for no charge. Bartering can also include some cash payment, too, such as the small newspaper which pays me for articles and also gives me free advertising space and a free subscription.

There's no end to what you can barter, but keep in mind the drawbacks to bartering. Services or goods traded under a bartering agreement may not bear warranties as paid-for work and products.

For example, I've received plumbing repair work in exchange for my writing a professional resume. The man who fixed my kitchen plumbing was not a professional plumber, but had tinkered with it as a landlord. The problem was minor enough that his expertise sufficed and spared me a costly bill.

Service providers also may not be bonded if that's not their regular line of work. Make sure that if this is the case, you barter only with someone you trust.

Bartering also does not exempt you or your trading partner from taxes. Discuss your bartering situation with your tax advisor to make sure you keep accurate records.

Bartering tends to work well for individuals or small-businesses where the decision to barter can be made by a single person and not a board. Since they're more likely to be short on cash, these parties are usually the ones that benefit the most from bartering.

Only barter if the other party really wants to trade with you; it's unfair to barter on the basis of maintaining relationships. Don't insinuate that you want to barter because you think the other party charges too much. To keep the deal sweet, make sure that the goods or services you're offering each other are of comparable value.

Be specific. Will it be a one-time deal or an on-going service? The hot tub owner traded with the upholsterer for one couch's recovering; a friend of mine regularly trades babysitting for her daughter's horseback riding lessons.

Will one party begin paying cash at a certain point? Be up-front and settle details beforehand.

If you're nervous about proposing barter, develop your approach with these example questions (and remember, you need to work out the details together):

"I'd love to own a piece of your artwork, but I'm short on cash. Would you be interested in bartering? I'm a professional Web developer and I would be happy to build a site or improve your current site. I also work part-time as a landscaper."

"I've really enjoyed browsing your shop, but right now a handmade clock isn't in my budget. Would you consider bartering? I work as marketing consultant and I could help publicize your business. I'm also experienced in teaching French pastry making and driver's education and I'm looking for someone who wants an upright piano."

"My bathroom could really use remodeling, but with four kids at home, I wouldn't be able to afford it. Would you think about trading the work for something you need? I could provide babysitting services. Or would you be interested in your children learning Spanish? I'm a substitute Spanish teacher."

Take the Next Step:

Share your thoughts about this article with the editor: Click Here

Debt Book
Stay Connected with TDS

Do you struggle to get ahead financially?

Surviving Tough Times is a weekly newsletter aimed at helping you stretch your dollars and make the most of your resources.

Debt Checklist

And get a copy of Are You Heading for Debt Trouble?
A Simple Checklist and What You Can Do About It
for FREE!

Your Email:

View the TDS Privacy Policy.

Debt Book