How to Trade For What You Want
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What is Cash?
Since the beginning of civilization there has been an abundance of unique ways that people have exchanged goods or services. Of course, this originally can be boiled down to the example of a wheat farmer and a cow rancher. We could go further back but let’s talk about that.
You’re a farmer, growing wheat and it’s time for harvest. The problem is, you can only eat so much bread, crackers and tortillas before you’re ready for a glass of milk.
But you have no cows.
Your neighbor has cows and he’s grubbing on butter and cream and milk. You then think, I bet that rancher would give me a gallon of milk in exchange for a loaf of bread.
A local currency has now been established. One loaf of bread now equals one gallon of milk. The problem with this is when another farmer moves in and starts selling a different product; let’s say goats milk.
Well, the wheat farmer decides that he likes the goats milk better, the goat rancher wants cow’s milk, and the cow rancher still wants some bread, so neither of them can trade directly for what they desire.
We are at somewhat of an impasse.
This is an oversimplification of where fiat currency comes into play to provide for the means of exchange.
Fiat Currency and Trade
Cold hard cash has become a means of exchange because not all of us can trade directly with each other. We’ve instead created fiat currency, or a product with declared value, that allows all of us to value our goods or services to one generally acceptable item of trade.
Of course, this is a solution to the problem above but it also causes other problems. Like the Dollar, the item has no intrinsic value beyond the paper it’s printed on and is only valued through the declaration of the issuing party; in this case the US government. In this case it may lose value over time depending on the carefully managed supply and demand.
Ok, so what are we getting at. How does this matter to my budget?
Read also: Earn Extra Cash blog post.
The Value of Time, Products, and Services
The point is, you don’t always need cash to get the product or service that you want.
All of us have products, services or time to distribute and there are people out there who are willing to trade us for it. Your very job or career is the agreement that your time, work or knowledge is worthy of trade for a pre-determined number of dollars.
The problem is, work typically ‘caps’ us on our earning potential based on the number of hours we work during the week. This is different if you produce a product and can increase your production or sales through different means, but let’s say we can’t and our only income is based on a standard work week. Money is tight but at the end of the week or workday, you still have some time to spare.
Does the value you provide to your work end the moment you walk out the door?
I hope not.
Perhaps you can provide that same value to your community, friends or family in trade for other products and services.
Read also about unique ways to use those skills or learn new ones to earn more money in my Start a Side Business blog posts.
Cash is King, Trade is Queen
Budgeting isn’t just about putting numbers on a piece of paper and making sure it all adds up. Budgeting is a way of life where we can be frugal, understand our worth and use the resources we have available to us to balance our life because we know that we have value and we deserve to be better than just another line item in the largest banks balance sheet or credit card companies.
We put money toward that which we value.
If we want something, we can use our skills and knowledge to increase our income so we can save and/or trade for that which we seek.
Look around and evaluate what you can provide and who needs your service.
Do you do art? Hair? Web design? Cleaning?
I bet there’s more you can trade with someone else than you think. Maybe someone else knows how to clean and service a pool and you know how to nurture a lawn and garden. You can save money by trading with friends and your community who already professionally do the work you desire.
It also gives you a new perspective on what trade is and what trading your hours and services are really worth.
When I worked for an hourly wage and I wanted to make a large purchase, I’d ask myself: “Is this purchase worth 40 hours of work?” Would I trade hours of my life for this?
Put that into perspective when you’re making new purchases and you’ll think differently about the trades you’re making, the value of products, and your budget.
Speaking of Queens, read also: How to Get Your Spouse on Board with Finances blog post.
What do you often use for trading or a unique way to pay for services? Let me know in the comments below.
Being disciplined with your money is hard but trust me, it's worth it. -Brandon
I’m Brandon and that’s my bride Ariana and our first born. We listened to age-old wisdom and paid off over $100,000 in debt from college, credit cards, vehicles and an underwater mortgage in under two years. We now we live a debt free life. Now we’re able to spend more time at home with our kids and prioritize our life.
With BeardedBudget, I have developed a number of financial and merchant relationships; some of which are affiliate relationships. The opinions expressed here are mine alone and should not be construed as professional financial advice but honest reviews and recommendations based on my own experience. For more information, read the disclaimers and disclosures.