Personal Finance 

Trying Out Time Banking

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As I was walking out of the gym on Tuesday, I picked up a copy of the newsletter my neighborhood association because the front page article was about a community exchange. The title was Columbia Community Exchange: Trading time to improve the community. The article was about time banking in Columbia, a type of barter system where you perform services that earn you “time.” You can trade those hours in for other services and everyone wins. It’s slightly different from bartering in that you don’t trade services with someone else, you perform services, earn hours, then you can receive services from someone totally different. I think it’ll be a fun little experiment.

What’s interesting is that the person who appears to be in charge (though it’s different from the person who activated my account) is Jessie Newburn, a “Social Media Coach. Generational Consultant. Speaker. Hula Hooper. Iconic GenXer.” There aren’t many people out there who are even aware of social media, blogging, and such – let alone offer consulting services in those realms. Now that I think about it, there probably aren’t that many advertising hula hoopers either.

One of the great benefits of time banking and the barter system is that barter isn’t taxed. If I provide an hour of service and charge a rate, I have to pay federal and state income taxes. When I spend what I earned on other services, the service provider has to pay taxes on what they charge. So if I earn a hundred bucks, I get to spend only about fifty dollars (federal income tax, state income tax, Medicare and Social Security come out to about 50% – that’s the rule of thumb anyway). By using the barter system and a time bank, I don’t get taxed for the time I generate from offering my services and whomever I purchase services from will also get the full value of their time. Uncle Sam gets nothing (don’t worry, I pay my fair share of taxes!) from this arrangement.

We’ll see how it goes!

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