Would You Use an Alternative Currency?

One of the first rules of investing is that you need to have a degree of diversity in your assets. That way, if something goes wrong with one asset class, you will have another asset available to pick up the slack. But how does that work if most of your assets are denominated in a specific currency, like that issued under the authority of Bank of Canada?

For some consumers and investors, the idea of an alternative currency independent of a federal government is an attractive one. In fact, over time local currencies have cropped up around the world. Even in Canada there are examples of local alternative currencies. One of the most popular — even though it might not actually be considered a true currency — is Canadian Tire Money. While it makes sense that it’s mostly for use at Canadian Tire locations, there are also other stores that accept it as payment.

But that’s not all. Some places, like the community of Salt Spring Island in British Columbia, issue local currency that can be used in participating establishments. These currencies are often backed by federally issued currency, though.

Another option is to use alternative forms of money, such as gold and silver coins (not federally issued). In the United States, there are some states, like Utah that allow consumers to use gold and silver coins that aren’t normally thought of as legal tender, such as “silver eagle” and “gold buffalo” coins, as legal tender. If a shop is willing to accept the coins as currency, for their value according to weight, then you can use it as currency, even though it’s not federal legal tender.

What About Bitcoin?

For the most part, alternative currencies operate in local areas. You can’t take your Salt Spring currency and use it in Calgary. None of the shops would accept it. One of the alternative currencies working to take the concept of alternative shopping global is bitcoin. Bitcoin is a global digital currency, created from computer processing power. If you have bitcoins, you can exchange them digitally with others for goods and services. In my hometown, there is someone who accepts bitcoins. Since the transactions take place digitally, there are no fees, and you don’t have to carry around a wallet (although you do need to be able to access your digital wallet on a computer device).

Bitcoin has received a lot of attention lately due to the fact that it is possible to use exchanges to turn in your bitcoins for other currencies. At one point, you could exchange one bitcoin for US$1,000. However, unlike other alternative currencies that are backed by more “official” tender, or by their metal content, or by some other means, bitcoin isn’t backed by anything.

And, in the end, no matter what is “backing” a currency, any medium of exchange only works so long as those involved agree that it is “worth” a certain amount in goods and services. Even barter could work as a medium of exchange — as long as you had faith in the value of what someone else is offering.

What do you think of alternative currencies? Would you consider using them?

How to Limit Materialism During the Holidays

This time of year, it seems as though materialism is ratcheted up a notch. Kids see toys everywhere, and they are encouraged to ask Santa Claus and just about everyone else for more things — things that they probably don’t need.

If you are concerned about how materialism is creeping into your family life during this time of year, here are a few strategies to limit the manifestation of the “gimmies” during the holiday season:

Start Holiday Traditions that Don’t Focus on Things

Consider family activities like shopping for a tree, putting up decorations, baking cookies, or going ice skating. Ask your parents and grandparents what they did during the holiday season, and consider adopting some of those traditions and practices. From creating ornaments for the tree to singing holiday songs, consider ways that you can enjoy the holidays while emphasizing family togetherness and making memories. There’s no need to make it about the stuff.

Encourage Community Service and Giving

Consider age-appropriate community service activities and giving opportunities. Have your children help you gather up canned food to take to the food pantry. If there is an Angel tree or giving tree in your community, have your child pick something off the tree and then help you provide a needed item for someone else. Encourage your children to go through their toys and clothes during the holiday season and choose some to donate to the local charity thrift shop. There are a number of ways that your children can get involved in giving to others and focusing on helping, even if its encouraging him or her to take a dollar out of his or her piggy bank and put it in a collection bucket.

Have a Homemade Holiday

Rather than buy everything, put together a homemade holiday in which your family members give gifts they make themselves. This doesn’t have to be things, either. Children can give “coupons” that allow others to ask them for help with chores, or for some other purpose. There are a number of fun, thoughtful, homemade crafts and ideas online. Encourage your children to personalize their gifts to others, and put some thought into the giving part of the holiday season.

Express Gratitude

One of the best ways to take the focus of material things is to express gratitude for what you already have. Getting in the habit of being thankful for the things you already enjoy is a good way to take the focus off of stuff during the holiday season. Make it a point to express gratitude during the holiday season. Tell your kids in the morning to think about something they are thankful for during the day. Tell them to watch for it, and then be ready to share it around the table. Being able to look for things to be glad of can put your child in a mindset to be contented, and to not always be thinking about things he or she wants.

What are some of your best ideas for limiting materialism during the holiday season?