Can bartering help you keep more cash in hand?

Money may make the world go 'round, but the barter economy is still alive and well 100,000 years on.

Even though we’ve come to rely on it, money is a relatively new phenomenon. It was officially minted in 650 BC when the first coins, made from a mixture of silver and gold, were stamped to represent different denominations1.

On the other hand, money-free barter exchanges date back more than 100,000 years2. And during the Great Depression, bartering was a popular way for families to get the things they needed.

In today’s modern world, barter exchanges are still occurring around the globe.

What is the barter economy?

The barter economy involves transactions between people, businesses and nations without the regular economy’s primary element: money.

In a regular transaction, money is an additional component but the barter economy’s currency can’t be distinguished from the goods and services being traded because they’re one and the same.

How it works

When two people exchange things of value, they are participating in a barter transaction.

Many goods and services can be bartered. For example, Janet may exchange her backyard chickens’ eggs with Alex who has a pumpkin he wants to swap. Likewise, a range of services—such as mechanical repairs and accounting services—may be exchanged.

The key point in a barter transaction is that no separate medium of payment is exchanged; just the goods or services themselves. The participants negotiate and determine the value of the goods and services to be traded based on their perceived value.

Five ways bartering could work for you

If your cash flow is light on, why not consider swapping your time, goods or services for things you need?

1. Do an audit

Carry out an audit of the items you own. Say you have a bike you hardly ride anymore because you exercise by playing tennis—could you barter your bike for a tennis racquet or tennis lessons?

2. Assess your skills

You may have time, skills or expertise to share. If you can type up a resume, paint a room or sew you may be able to exchange your skills for something you need, like babysitting.

3. Use your networks

Create a list of the things you can offer and those you need. Then consider talking about bartering with the people you know.

4. Hold a swap-party

If anyone shows interest, consider holding a swap-party—you may be able to exchange children’s clothes or books and benefit from cleaning out some clutter and finding what you need.

5. Go online

If you decide to venture beyond your own community to find people who need what you’ve got, consider visiting the Australian Barter Exchange website or download an app like BIZpaye for iPhone and android or SwapIt at the AppStore.

Tax and the barter economy

The tax office views bartering as a legitimate form of currency, so transactions may be assessable and deductible for income tax purposes. Visit the Australian Taxation Office website for tax-related information about barter exchanges.

Seek advice and stay up-to-date

When considering bartering, it may also be worthwhile speaking with a financial adviser so you can factor in any tax obligations.

Use our budget planner to make the most of any extra cash you’re able to keep and stay tuned for more News & insights about stretching your money further. 


1 Goldsborough, Reid (2003-10-02). "World's First Coin". Retrieved 2009-04-20 [link]

2 Mauss, Marcel. The Gift: The Form and Reason for Exchange in Archaic Societies. pp. 36-37 

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© AMP Life Limited. This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.