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Time Banking Explained – How to Trade Services With a Time-Based Currency

Suppose you’ve got a leaky toilet in your bathroom. After trying without success to repair it yourself, you call a plumber who gets the job done in an hour. Normally, this would leave you with a hefty bill to pay – anywhere from $45 to $150 for that one hour of work.

But in this case, there’s no charge. You’ve already paid for an hour of the plumber’s time by spending one hour of your time babysitting. And it wasn’t even for the plumber’s kids!

This story could be true – if you belong to a time bank.

Time banking is a system that lets people use time, instead of money, to pay for goods and services. People simply trade an hour of their time for an hour of someone else’s. It doesn’t matter whether that time is spent on highly skilled work, like plumbing, or a simple job like doing laundry; if you give an hour, you get an hour.

Read on to find out how you can use time banking to your advantage.

How Time Banking Started

The first time bank that anyone knows of was set up in Birmingham, England, in 1834. It issued “Labour Notes,” which looked like paper money, but were marked in hours rather than pounds. However, this program only lasted two years before folding. Other economists of the 1800s, such as John Gray and Karl Marx, brought up the idea of labor-based money systems in their writings, but none of them ever succeeded in creating one.

The first modern time bank was created by Edgar Cahn, a lawyer and anti-poverty activist, in the early 1980s. At the time, the government was cutting funds for many social programs, and Cahn was worried about the effects on low-income families and communities.

As he explains in this video, he believed society didn’t value these people because it saw them as freeloaders – people who just took money from the state and gave nothing back. The important jobs they did, such as caring for children or rebuilding neighborhoods, weren’t being recognized.

Cahn came up with the idea of creating a whole new money system, called “service credits,” that would give people a way to put their skills to use and get rewarded for it. As he later wrote in his book “No More Throw-Away People,” he saw these service credits as “a new kind of money to put people and problems together.” Later, he changed the name of the credits to Time Dollars and coined the term Time Banking – and a movement was born.

Today, there are roughly 500 time banks in the United States alone. Time banks can also be found in dozens of other countries around the world, including Great Britain, France, Italy, South Korea, New Zealand, Australia, and Argentina.

Time Banking Started

How Time Banking Works

The basic idea behind time banking is that there are two economies. We’re all familiar with the money economy, where we earn money and exchange it for goods and services. But there’s a “core economy” behind that: the economy of home, family, and community. Raising a child, preparing a home-cooked meal, cleaning up a polluted stream, and tending a community garden are all part of this core economy.

These are the kinds of things you can’t put a price on – and the money economy doesn’t. Activities like these have value to society, but they have no dollar value. Because of that, core activities often fall by the wayside as people devote most of their time to paid work. For instance, parents often struggle with the decision whether to work or stay home with their children – to make more money to provide for their families or have more time to care for them.

Time banking seeks to remedy this problem by putting a fair value on core economic activities. When you put your time into helping someone else – even in a way that’s traditionally unpaid or poorly paid – you earn Time Dollars for it. You can then spend those time dollars on things that you need – things that may not be easy to buy for money.

For low-paid workers, this is obviously a great deal. For one hour of work, they can get an hour of service that would normally cost them much more than an hour’s wages. But even higher-paid workers often find that doing business this way is more rewarding than working for money. It offers them steady work and a chance to help their neighbors at the same time.

One Hour Equals One Hour

The basic principle of time banking is simple: One hour equals one hour. That is, when you do an hour of work for anyone, you get an hour in return. In this way, it’s a bit like a babysitting co-op, in which parents take turns looking after each other’s kids.

The main difference is that the people in a time bank aren’t just swapping the same service. A time bank can include all kinds of activities, from home repair to running errands, and they’re all worth the same amount. It doesn’t matter what job you do, or how much you would normally be paid for it in dollars. An hour of time from a lawyer is worth the same as an hour of time from a babysitter.

Time banking is not the same as bartering. When you barter, you give something to one person, and that person gives you something in exchange. For instance, you could offer to clean your neighbor’s house, and in return, your neighbor could help you with your taxes.

But with a time bank, exchanges don’t have to be tit-for-tat. You can do a service for anyone else in the time bank, and you can get a service from anyone else in return. In other words, Time Dollars circulate just like paper dollars in the money economy.

Here’s an example:

  1. Joe, an accountant, spends two hours helping his neighbor Raul with his taxes. In return for that, he earns two Time Dollars (also known as time credits).
  2. Joe spends his two Time Dollars to pay Sandra, a web designer, to build a new website for his business. Sandra earns two Time Dollars for that job.
  3. Sandra pays her two Time Dollars to Mei, an electrician. Mei spends two hours installing new light fixtures in Sandra’s kitchen.
  4. Mei spends her Time Dollars to hire Raul, who runs a catering business, to provide food for a party at her home. She pays for the groceries with cash, but uses Time Dollars to pay Raul for the time spent preparing the meal. In this way, Raul earns back the two Time Dollars he paid to Joe for his tax help.

Different Types of Exchanges

In all the examples above, each person helps out exactly one other person. However, time bank exchanges don’t need to be one-for-one. It’s also possible for one person to help a whole group of people, or vice versa.

For instance, a yoga teacher could earn Time Dollars for giving a private class for four other time bank members. Or, a group of four members could all earn Time Dollars together for helping another member paint his house. You could even have a large group earn Time Dollars for organizing an event – say, a street fair – that lots of other members pay in Time Dollars to attend.

Keeping Track of Time Hours

When you swap goods or services with one other person, it’s easy to keep track of who owes what. However, with a time bank, you have many people all exchanging services at once. You need some way to keep track of how many Time Dollars each member has earned and spent.

Some time banks do this by issuing their own paper scrip. Members can buy and sell services with these printed Time Dollars just as they do with normal money.

However, most time banks find it easier to use online time-banking software. Whenever two members make an exchange, they use the software to record it. The program keeps track of all the exchanges and sends members a Time Dollar statement each month.

Time-banking software can do many other jobs as well. For instance, it can:

  • Facilitate Exchanges. Time bank members can use the software to find other members to make exchanges with. Members can post their offers of services, such as, “Yard work, 2 hours.” They can also post requests for services, such as “Need a ride to the airport, 1 hour.” And they can search the software to find someone who can do a particular job.
  • Enroll New Members. People who want to join the time bank can use the software to fill out an application. If they’re accepted, they can use it to create a profile showing where they live and what jobs they can do.
  • Spread the Word. The software can alert members when there’s a special project that needs lots of people to contribute. It can also tell them about events for members, such as meetings.
  • Track Members. The administrators of a time bank can use the software to keep track of how active their members are. They can also see which members are reliable about doing jobs as promised. If a problem ever comes up between two members, they can use the software to reach out to the members and help resolve it.

There are many time-banking programs available, such as TimeRepublik and Time and Talents. Timebanks USA, a national nonprofit that supports time banks in this country, has developed an open-source program called Community Weaver that any time bank can use and customize. Over 200 U.S. time banks run on this program.

How Time Banks Are Used

In theory, there’s no limit to the kind of services you can exchange through a time bank. However, the actual services available vary widely from one time bank to another. It all depends on how many members the time bank has, and what they know how to do.

Here are a few examples of the services people in this country share through time banks:

  • Care for children, the elderly, or the sick
  • Cooking
  • Delivery services
  • Financial planning
  • Help with moving to a new house
  • House cleaning
  • Home repairs
  • Legal assistance
  • Lessons of all kinds, such as art classes, cooking classes, driving instruction, fitness classes, and language lessons
  • Office services, such as accounting or computer work
  • Personal care, such as haircuts
  • Ride sharing, such as giving someone a lift to the doctor’s office
  • Tutoring for students
  • Yard work

Time banks aren’t just for individuals. Larger groups, such as businesses, churches, non-profits, and even government agencies, can all become members. Organizations run by volunteers often use a time bank to keep track of volunteers’ hours and reward them for their service.

Time Banks Used

Time Banking’s Core Values

In his book, Edgar Cahn wrote that a time bank works best with certain “core values” in place. He has identified five values he thinks any time bank should have to succeed:

  • Value Everyone. A time bank should see all its members as assets. Everyone has something of value to share – even if it’s something that isn’t worth a lot in dollar terms.
  • Redefine Work. The money economy defines “work” as a job that earns money. Time banks, by contrast, put a value on the kind of work that money can’t buy, such as creating art, rearing children, improving a neighborhood, or social activism. Time credits are a way to recognize and reward these hard jobs as real work.
  • Reciprocity. Time exchanges must be a two-way street. Everyone involved needs to give, as well as receive. When some people only give and others only take, it creates an uneven relationship that can lead to resentment. Helping each other, by contrast, empowers everyone. Whenever members receive help, they need to think about how they can “pay it forward” by helping someone else. In this way, everyone can work together to build a better world.
  • Social Networks. A good time bank is a web of mutual support. As members help each other out, they form stronger ties to each other. Over time, these ties develop into a net that helps hold the whole community together.
  • Respect for Others. All members in a time bank need to treat each other with respect. People can differ in many ways, such as culture, faith, and political views, but these differences should never stop them from valuing each other. This mutual respect is essential for any group to be able to govern itself.

Types of Time Banks

According to Timebanks USA, there are about 500 time banks in the United States, serving between 40,000 and 50,000 members. All these time banks share the basic hour-for-hour premise and the five core values. However, in other ways, they vary widely.


Many time banks – especially newly formed ones – have no more than 25 members. At the other end of the spectrum, there are large, well-established time banks with thousands of members. In general, the more members a time bank has, the more active sharing goes on.

Time banks can differ in scope as well as size. Most time banks serve a small, local area. However, it’s possible for a single time bank to span across continents. Sometimes, several small time banks band together into a larger regional group so they can share resources, such as software.


Some time banks – especially small ones – are run by just a few people, called coordinators. Others have a bigger advisory board that provides support for these leaders. A few time banks have very little leadership at all. Instead, they rely on their individual members to manage their own time exchanges.

The people who run a time bank may be unpaid volunteers or paid employees. If they’re paid, it’s usually part-time, but a few time banks have full-time staff. Some time banks pay their coordinators in Time Dollars for the work they do to keep the time bank running. They can also receive both part-time pay and Time Dollars for the extra work they put in.


Time banks provide an alternative to cash – but that doesn’t mean it’s possible to run one without money. Even a small time bank has some expenses for things like phone lines, software, web hosting, and spaces for meetings. As time banks get larger, their expenses also grow, and they may even need to add paid staff. Timebanks USA estimates that the cost of running a time bank can be anywhere from $20 to several hundred dollars per member, per year.

Thus, a time bank always needs some source of funding. Time banks can raise money from their members, either by charging dues or by holding fundraisers. Others are sponsored by a larger organization, such as a nonprofit or a government agency, which shares some of the same goals as the time bank.

In some cases, time banks apply to the IRS to become nonprofits themselves. This allows them to raise funds from foundations, governments, and the public.


Most time banks are “place-based.” That means they exist to help people in a particular area. Their goal is “neighbors helping neighbors”: connecting members of the community into a network of mutual support. In this model, time bank members can provide, or ask for, any type of service they choose.

However, some time banks are “mission-based.” That means they’re set up to serve a specific purpose, such as improving education or caring for seniors. Mission-based time banks sometimes spread their reach beyond a single neighborhood to help people throughout a city or state.

Here are a few examples of how time banking can be used to achieve a specific goal:

  • Keeping Teens Out of Jail. At the Time Dollar Youth Court in Washington, D.C., teenagers earn time credits by serving as jurors for other teens accused of nonviolent crimes. Instead of receiving jail time or fines, the offenders are usually sentenced to do something positive to make up for their crimes. This could involve taking a class, writing an essay, doing community service, or serving on the jury themselves. Yes! Magazine reports that less than 10% of all teens tried by the Youth Court go on to commit another crime. The city saves an estimated $9,000 for each offender who goes to Youth Court instead of a traditional court.
  • Keeping People Healthy. In central Pennsylvania, the Community Exchange TimeBank connects health professionals with ordinary people who need care. The community includes about 500 individual members, 30 to 35 organizations, and 7 health care facilities. For example, the Miller-Keystone Blood Center in Bethlehem, PA, offers time bank members two time credits whenever they donate blood. Healthcare providers benefit from giving their time to the exchange as well. This video tells the story of one member who put in hundreds of hours of medical interpreting for the hospital and, in exchange, got flowers, photography, hair and makeup, and a cake for her wedding.
  • Returning Prisoners to Society. The National Homecomers Academy in Washington, D.C., is a project run by the nonprofit organization Phelps Stokes. It enrolls people who have just been released from prison in programs to help their communities. For example, they take part in a “Safe Passage” program to walk children to and from school through dangerous neighborhoods. The Homecomers track their hours and get paid back with certificates. Yes! Magazine reports that not one of the Homecomers had returned to prison after the first year and a half – even though typically 60% to 70% of all former inmates commit another crime within three years.
Returning Prisoners Society

Benefits of Time Banking

Time banks can offer many benefits for their members. They include:

  1. Budget Relief. Belonging to a time bank makes it easier to pay for the things you need when money is tight. You can’t pay for everything you buy with Time Dollars, but you can use the money you save on services to pay for goods. For instance, a cash-strapped family could use time credits to get a ride to the doctor’s office with a sick child instead of spending $30 or more on a taxi. That extra money could then go to pay for the medicine the child needs.
  2. More Luxuries. When money is tight, one of the first things most people do is cut back on luxuries like exercise classes or spa visits. If you belong to a time bank, you can continue to enjoy these little treats by paying for them with Time Dollars.
  3. Tax Savings. Spending Time Dollars instead of regular dollars has another advantage: You don’t have to pay tax on them. The IRS has ruled on more than one occasion that a time bank is not a commercial barter organization, so the “income” people earn from time banking is not taxable. You also don’t have to pay sales tax when you “spend” your Time Dollars.
  4. Help With Job Hunting. When you’re out of work, you face a dilemma. You need to find a new job, but job hunting costs money – money you no longer have to spare. Time banks offer a solution. You can spend your time credits to get help putting together a resume, get rides to job interviews, or find child care. You can also use them to learn new job skills, such as working with computers.
  5. Help Starting a Business. Another option if you’ve lost your job is to start a small business. However, this also takes money for things like new business cards and a website. Fortunately, Time Dollars can pay for many of these things, making it easier to get your new business up and running without draining your savings.
  6. More Rewarding Work. It’s not always possible to earn money – or at least, enough money – doing work you truly love. Maybe you’re passionate about cooking, teaching, or cleaning up the environment, but you spend most of your day working in tech support or accounting because it pays the bills. Time banking gives you a chance to pursue your true calling and get rewarded for it.
  7. Connecting With Neighbors. Usually, if you need a service – say, a ride to the airport – you have to pay money to a stranger you’ll never see again. But with time banking, you can get help from a neighbor, someone who could become a friend. A New York Times article on time banking reports that among older members of a New York City time bank, 90% said they had made new friends, and more than 40% saw those friends several times a week. The members also said they had become more trusting of others, especially of people who were different from them. That’s because the time bank brought together people who varied widely in age, culture, and income level.
  8. Helping Others. The New York Times also reports that only 10% of the members at that time bank bother to record all the hours they spend working there. That’s because for them, the best part of working for the time bank isn’t the Time Dollars they earn; it’s the feeling that they’re making a difference in other people’s lives. In some cases, working for a time bank can even help people recover from depression. One woman who became severely depressed after her mother’s death gained a new sense of purpose from doing crocheting work for her fellow time bank members.

Problems With Time Banking

Time banks can be a useful complement to the cash economy, but they can’t replace it completely. There are several drawbacks to paying for services with time instead of money:

  1. Limited Locations. The biggest problem with time banks is that not every area has one. Although there are around 500 time banks in the U.S., they’re not equally spread out across the country. They’re clustered in the eastern and western states, especially in and near large cities. That means if you don’t live in one of those areas, you have no way to earn and use Time Dollars.
  2. Limited Uses. When you earn a dollar, you know you can spend it on anything, anywhere in the country. Time Dollars, on the other hand, can only be used to pay for services that other people in your time bank are offering. If you need to hire an electrician, and your time bank doesn’t have one as a member, your Time Dollars can’t help you. And in most cases, you can’t use time credits to pay for goods at all.
  3. Hard to Explain. One problem with time banks is that most people have never heard of them and don’t know how they work. They assume that working for a time bank is the same thing as volunteering. Time bank leaders must take special care to show potential members how time banking is a give-and-take.
  4. Hard to Maintain. Running a time bank can be expensive. Some time banks manage to keep their expenses low by using free software and volunteer labor. Others find sponsors to help them cover their costs. However, some have to rely on donations from their members. If they don’t get enough, the time bank can’t meet its expenses, and it collapses.
  5. Interference With Markets. Some critics of time banks complain that they interfere with the money economy. By putting the same value on every person’s time, they claim time banks “distort” the market economy, which values some skills more highly than others. However, hOurworld, an international network of time banks, argues that time banks pose no threat to the cash economy. It points out that in many cases, time banks and mainstream businesses work hand in hand. Many businesses become members of time banks to save cash and get free publicity.
Interference With Markets

How to Try Time Banking

If you’d like to give time banking a try, check the directory at Timebanks USA to look for one in your area. There’s a large list of time banks sorted by country and state, as well as a map showing where they are.

If you find a time bank you’d like to join, just click on its name. You’ll see a profile showing its contact information, as well as details about how many members it has and when the last exchange took place. Timebanks USA warns that when you reach out to contact a time bank, it may take a while for them to get back to you. Large, busy time banks usually reply promptly, but smaller or less active ones often take longer.

If you can’t find a time bank in your area, you can try starting one. However, keep in mind that running a time bank is a lot of work. You have to set policies, keep track of Time Dollars your members earn and spend, and spread the word to new members. You also need to organize meetings and events for members and seek out sponsors to help fund the time bank.

If you’re serious about taking on this job, you’ll need to make it a team effort. Seek out a group of other people who are also interested in starting a time bank in your area. Then, together, follow these steps:

  1. Brainstorm: Talk about what you want to achieve with your time bank. Is it for neighbors helping neighbors, or does it have a more specific mission? Who do you think the members will be? Who will help to run it?
  2. Learn: Before you jump in, learn as much as you can about time banking. Visit the Timebanks USA site, especially the Resources section, where you can find specific documents and tools to help you get started. Another good place to look is the Timebank Knowledge Commons, which has a step-by-step guide to starting and running a time bank. Also, talk online with people involved in time banking and ask them about their experiences. Be sure to take plenty of time with this step. The more you can learn, the better prepared you’ll be.
  3. Organize: When you think you’re ready, put together a group to run your time bank. Figure out what jobs each of you will do. Write out an action plan for finding new members and keeping track of Time Dollars. Finally, work out how much all this will cost, and how you’ll pay for it.
  4. Set Up: Find a base of operations for your time bank. Even a small time bank needs an office with basic resources like a phone line and a computer. This can be in someone’s home or in an office that you rent or borrow. Set up everything you need, and make sure you’re all informed and ready to get started.
  5. Reach Out: Make a brochure to describe your time bank to new members. Also, get your members’ handbook and orientation materials ready to go. When everything is ready, start inviting new members to join.
  6. Meet: Hold an orientation meeting for anyone who’s interested in the time bank. If all goes well, you’ll be able to sign up your first new members at the end of it.
  7. Exchange: Start setting up the first exchanges between members. Time banking software can help you out with this. As exchanges continue, keep track of everyone’s time credits. Try to make sure that all members are both giving and taking.
  8. Celebrate: Celebrate the successful launch of your time bank, but don’t just rest on your laurels. Keep holding regular meetings with your members to get new ideas for where your time bank can go next.

Final Word

The Yes! Magazine article about time banking quotes a journalist who studied time banking back in 2001. At the time, she compared time banks to windmills and solar panels: a quirky little niche product that could do a lot of good, but only for a small number of people.

That comparison looks a lot more interesting now. As Scientific American reports, wind and solar energy are the fastest growing part of the modern energy sector. In 2016, new wind and solar plants added more than 14,000 megawatts to the electricity grid – 60% of all the new capacity that was added that year. The U.S. Energy Information Administration states that wind power accounted for 8% of all the electricity produced in the country in 2016.

This just goes to show that sometimes, a tiny niche product can suddenly take off in a big way. For now, time banks are only serving a relatively small number of people. But if they follow the same path as wind and solar, one day they could be a mainstream part of our economy. Perhaps one day we’ll all have two choices about how we pay for things: with dollars, or with hours.

Have you ever used a time bank? Do you have plans to give one a try?

Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including,, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.