Creative Currencies

Whether we’re in a place of abundance or scarcity, money can inhabit a central role in our lives. But did you know there are ways of reducing our reliance on money? They’re called creative currencies, and they may help you spend less, support your community, and build relationships.

Money woes

Many of us are trying to make more, spend less, avoid or cope with debt, invest, plan for the future, and save. With so much of our time and energy directed toward money, strain can build, affecting our health and relationships.

From rent to mortgage payments, RRSPs to RESPs, it’s not surprising that in 2009, the Canadian Medical Association noted nearly a quarter of Canadians were losing sleep as a result of financial woes. A newer study points out food insecurity affects more than 1.1 million households in Canada. Further, a survey put out by the Canadian Institute of Chartered Accountants indicates more than 60 percent of Canadians worry about money. And money tensions are among the top reasons for divorce.

It’s no wonder then that pressing concerns about money are on our minds much of the time.

What is money?

Once we strip away emotions or stress, we can see that money, at its core, is simply a convenient tool in between what we do and what we want. If we can recognize that money is ultimately a kind of instrument or symbol, we can also begin to see alternatives. There are creative “money”-making and -spending options that may improve our outlook, sense of self, and wellness.

Money-free scenarios (see “Community Currencies” sidebar) are sometimes referred to as part of sustainable consumption or holistic, green, local, or new economies.

Usually rooted in exchanging time or talents, these approaches build community and prioritize the neighbourhood or region. They are also believed to deter consumer debt, hoarding, and volatility.

Get creative

Being creative about currencies is really about considering different options for getting what we need—without spending money.

The following are types of moneyless arrangements, which can help to lessen money burdens.

Bartering benefits

A type of direct, cashless exchange, bartering most frequently happens when someone trades their goods or expertise for those of another; for example, home garden harvests for childcare, tax advice for massage treatments, or decorating tips for help with house repairs. Bartering relationships can be informal, such as when neighbours switch skills or supplies, or they can be formalized through contracts, such as time-for-classes exchanges at yoga studios; some are one-time agreements, others are ongoing and long term (see sidebar “Tax Implications” on page 73).

When entering a barter agreement, be clear, specific, and transparent. Disappointment and difficulty can be prevented through open communication around expectations, such as fairness, quantity, delivery, or time.

The positive effects of bartering are plentiful: deepened cooperation, kinship, resourcefulness, and self-confidence.

Free-cycling

Free-cycling is organized, targeted donating. Waste reduction—specifically, minimizing what goes to landfills—and community building are its primary aims. Instead of throwing items away—clothes, household goods, musical instruments—individuals transfer them to others who request them, in person or online.

For example, with more than 7 million members around the world, freecycle.org is a network that links donations with people who want to take them.

Upcycling

The ultimate in eco-friendliness, upcycling involves people transforming goods—objects, clothing, materials, and things headed for the trash bin—into those with new use and beauty. Whereas recycling breaks down an item’s substances to be remade into something else, upcycling utilizes the materials by refashioning and repurposing them. The quality of an upcycled item is also as good as—or better than—the original.

Pinterest and hipcycle.com are two online arenas sparking inspiration and helping fuel this creative, cashless approach. All that’s needed to upcycle are items you no longer use or want, imagination, and some DIY skills—or you can barter for someone else’s handiness or keen eye for design!

Swapping

Swapping, advertised by neighbourhood flyers and online, entails people trading one item for another, such as DVDs, toys, or camping equipment. Given that the average Canadian’s debt (excluding mortgages) is estimated at more than $27,000, swaps can help alleviate some of this pressure (see “Tax Implications” below).

Empowering prosperity

Being creative in how we think about money can be both powerful and personally transformative, in that it invites us to recognize and make use of our abilities.

Through bartering, free-cycling, upcycling, and swapping, we can build confidence, engage our creativity, connect with our communities, and cultivate a holistic, healthy perspective about money.

Community currencies

Some places across Canada have embraced their own unique currencies, often with the aim of supporting local businesses.

Salt Spring Island: Salt Spring Dollars are paper and coin currency that started in 2001, featuring island figures and artwork, with nearly universal acceptance on the BC island.

Calgary: Calgary Dollars originated in 1995 and are now used at a variety of local businesses and municipal sites.

Toronto: Beginning in 1998, an alternative paper currency called Toronto Dollars has helped support city charities, particularly those focused on homelessness. It had a brief hiatus from the market in 2012, but was relaunched in 2013.

Glossary

Bartering: direct exchange of goods or services

Free-cycling: specific gifting according to need

Swapping: trading one item for another

Upcycling: reusing an object in a way that increase’s the object’s original value

Tax implications

Depending on the nature of your swapping or bartering transaction, you may have to declare it to the Canada Revenue Agency (CRA) in your taxes.

• An occasional exchange of goods or services is not subject to taxation, but if it’s an ongoing exchange (such as fitness classes for writing services or weekly baking) it is subject to taxation.
• If the service you’re providing is part of your normal profession, you would need to declare it. For example, if you’re a dentist who’s offering to examine a friend’s teeth in exchange for decorating tips, it is subject to taxation, but if you’re a dentist who’s offering to do scrapbooking in exchange for decorating tips, it’s not subject to taxation.
• The exchange of goods can also be taxable if they are business related, such as a store owner giving groceries to someone in exchange for something else.

Speak with your tax accountant for more information and for a professional opinion on your unique situation.