In 2020, the BBC reported that the bartering economy is experiencing a comeback and growing rapidly. With so many people suffering financial difficulties during the pandemic, bartering has become a way of getting essentials and extras even when money is scarce.
And it isn’t just individuals who are bartering for goods and services. UK businesses are also turning to bartering to obtain professional services they wouldn’t otherwise be able to afford.
What bartering really is
A bartering economy was commonplace among ancient societies, such as Ptolemaic Egypt, before coins became standard or during times of crisis. Bartering is a simple system in which people exchange goods and services rather than paying for them.
There are no specific rules regarding bartering. This means people can agree to individual trades according to their perceived value of things. For example, a photographer might barter a portrait session with a hairdresser or a tax accountant. Or they can exchange their services for food, second-hand appliances or other things.
Benefits and disadvantages of a bartering economy
Like everything, bartering isn’t for everybody, but a bartering economy does have many benefits in certain situations.
Plot your path towards financial freedom with our new Hero’s Journey tool!
MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.
Our latest tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.
- Bartering allows you to get what you need in exchange for something you have a plentiful supply of or something you no longer need or use. That treadmill taking up space in the living room? It can go to somebody who has a second-hand bike you could use to get to work. In this barter, nobody spends any money and both parties get exactly what they need.
- By bartering for certain items or services, you’re able to keep more cash on hand for other expenses. This is especially useful when money is tight or during a recession.
- There’s no way to guarantee a fair exchange during a barter. It’s up to the parties involved to inspect goods or services and determine whether the value is appropriate.
- If you only have a limited number of things to barter, it might be hard to find somebody interested in making a deal.
- Very valuable items might be hard to barter. For example, bartering a car might be difficult because of its high value – how do you find somebody with a high-value item you can trust for a barter?
- If you live in a small community, establishing a bartering economy might be hard without enough people being interested in it.
How a modern bartering economy works
Pre-coronavirus, many small towns organised their own swapping events, sometimes with specific themes, such as clothes, book or plant swapping. But a bartering economy has become even more commonplace during the COVID crisis.
There are many dedicated Facebook pages for bartering (most operating on a local basis), as well as Library of Things Facebook groups (look for one in your area). Most of these operate on a relaxed basis. People post a request and what they have to barter for what they need.
A unique form of a bartering economy is used by Timebanking UK. Rather than exchanging directly with somebody else, you can ‘bank’ hours into a system and then use them for something else.
For example, tutor a child for an hour and you get credit for that time. You can then barter that hour for any service posted on the website or accumulate hours for a bigger service down the line. Timebanking operates on the belief that everybody’s time is valued equally, so you will be able to barter your skills no matter what they are.
Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.