When I Had No Cash, I Bartered

by SixFigureStart | April 15, 2009

  • My Vault
For the past several years I’ve been an outsider, at least in the traditional job market. I traded my secure career in journalism (the idea of job security in journalism now seems quaint) for a less structured life on a tropical island. Though I continued to write freelance articles, made jewelry, and taught yoga, the uncertainty of collecting income from these sources inspired me to explore nontraditional forms of currency. When I still had a steady income, not to mention savings, I used cash for the basics – rent, food, and car repairs. While living in Puerto Rico, participating in an intentional community – a raw food retreat center that felt like a commune — I began engaging in barter. (Read Lynn Parramore’s essay on barter’s roots in the Depression.)

Massage therapists were willing to trade structural integration therapy for jewelry, or deep tissue massage for yoga classes. One of my yoga students painted a beautiful pink lotus that I used as a logo for my website and promotional cards. One month, when this student was short on cash (she lost everything in Hurricane Katrina and had recently relocated to the island), we traded a series of yoga classes for a watercolor of a Rincon sunset.

When money is tight, bartering is a way to continue to enjoy things you might not be able to pay for with cash or a credit card. Massage, websites, graphic design, vacation rentals, clothing, jewelry — no problem. Using your wits, you might be able to trade your skills for dental work, plumbing or electrical repairs.

“I used to joke that I bartered for everything but my rent, and I would have if I could,” says Ester Fischer, a massage therapist in New York. She wasn’t earning a lot of money, but her skills were in demand. She began a system of exchange: Clients received massages and Fischer had her apartment painted, got health food from a friend with a store and never paid for haircuts or coloring. “If people had services it was a really easy thing to barter,” Fischer says. “I never paid for accounting services. After my taxes were done, we’d clear a space on the floor and I’d give him Shiatsu.”

With the economy in the gutter, you might take a cue from the people who have lived on the fringe for years.

For Jennifer Neal, who toured with the Grateful Dead for years, living by the barter system is nothing new. “I do it all the time. I trade tea, I trade marketing services, I trade my writing,” she says. She even trades ad space on her blog, nakedjen.com, for food for her dogs.

Bartering helped her see lots of Dead shows over the years, but these days, “it is how I get the things I might not otherwise afford,” she says. Such as a tutu someone is designing for her in exchange for a tincture (Jennifer is a master herbalist).

Some people look at barter as a way to skirt the tax system and whether you report your barter transactions is up to you. Technically, the Internal Revenue Service looks at barter as another form of income – one you must report by filing the proper forms. “Barter dollars are identical to real dollars for tax reporting,” according to IRS documents. The fair market value of goods and services exchanged must be included in the income of both parties. If bartering through an exchange network, you need to fill out form 1099-B. Taxes are due in the year the barter occurs. “You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax,” the IRS states.

“It’s important to understand and value yourself, of course, and not just give it away,” says Neal. “But it all comes back.”

--Posted by Jodi Mardesich, RecessionWire.com

Jodi Mardesich is a writer, yoga teacher, jewelry designer (IAmBlossoming.etsy.com) and sometimes a personal chef and detox coach. A former staff writer for Fortune and the San Jose Mercury, she has written for The New York Times, Yoga Journal, Salon, Slate, and The Advocate, and lives in Cedar Hills, Utah. She blogs at ASeriesOfSmallFailures.wordpress.com.

Lemonade Makers: Elizabeth McGowan, Career/Life Coach
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