The saying “time is money” just got a whole new meaning. Time banking allows patrons to trade their skills for services they need, and the relatively-new concept is becoming increasingly popular among retirees.
Here’s how it works: For each hour of service banked, members earn an hour’s worth of alternative currency known as “time dollars”, which can be traded for services from other patrons. Time dollars have no monetary value, and every hour of service equates to one hour banked-- regardless of the service’s market value.
According to AARP, nearly 270 time exchanges exist nationwide with memberships ranging from a few dozen to several thousand patrons.
Stephanie Schapiro, a contributor to AARP’s magazine, answered the following questions about this new trend and how boomers can use it to their advantage.
Boomer: What do boomers need to know about time banking and how it works?
Schapiro: Time bank is like a real bank where you deposit money, however here you are depositing your time. Here is an example: Say you have a neighbor who bakes a cake for your 10- year-old daughter and that takes about three hours of her time, she banks those hours and she use them for three hours of service in the future.
Time dollars earn no interest, and have no equivalent monetary value. Each hour of one member’s service equals an hour of another’s, regardless of market value. Stuffing envelopes is worth exactly as much as preparing a tax return, mending a pair of socks or rewiring a lamp. By placing the same value on all services, time banks not only avoid tax issues, but also encourage members to share abilities that might not have much cash value, but can do much to help neighbors. The bigger the community, the bigger the time bank membership making more kinds of services, talents and skills available.
Boomer: Why do you think boomers in particular are drawn to time banking?
Schapiro: Baby boomers are stretched financially these days trying to make ends meet. They are worried about retirement, and a time bank can help relieve other living costs. If you are a member of a time bank and need home repairs, it likely there is someone within your time bank with those skills.
Another draw to time banking for boomers is they can build up their hours for when they get older and may need more assistance.
Boomer: How has the economy had an effect on the popularity of time banking?
Schapiro: The economy has had a very large impact, particularly with the more vital and dynamic time banks.
Public transit has taken a hit in this economy, which makes it tough for older boomers who can no longer drive. Being a member of time bank can allow you to exchange for someone taking you to the doctor or to the grocery store. Also, with medical costs so high, there are some time banks that now provide participants medical care.
Boomer: What are some of the more popular services that boomers are both offering and receiving?
Schapiro: Definitely driving. There is a wonderful organization outside of Baltimore called Partners in Care and that was formed specifically to help provide transportation for the elderly. A lot of the people who first joined were young boomers and now that they have aged, they can take advantage of using their time to have someone drive them.
Decluttering is another popular service in time banking, you can have someone come and clean out your garage or your basement. Yard work, carpentry and deliveries are also being used.
Boomer: How have time banks affected communities?
Schapiro: Time banks can really transform a community. People are using time as the currency not just for the services they need, but to become closer and more engaged with other members.
These banks create a sense of alliance and the shared commitment compounds the value of their hours. You can go from offering transportation services and expand to doing home repairs, giving dancing lessons, planning parties or providing medical care.
The sky is the limit in terms of what time banking can accomplish. You need a very organized, small staff to keep the time bank going. You need software that will help you keep track of everything, but for the most part it is a very simple idea that really helps people get beyond their immediate financial concerns.
Boomer: How do people get started in time banking?
Schapiro: People wanting to get more information or even get started in time banking should visit the website at www.timebanks.org. Time Bank USA is a non profit is located in Washington, D.C.