If you’ve ever been in the position where a friend or family member has asked to borrow money, you know how difficult it can be to say no. You want to help them out because you love them … but money has a funny way of putting a strain (or even potentially destroying) strong relationships. Gifting money is one way of avoiding a potentially complicated situation, but if you don’t have any money to give, what do you do?

I’ve been in this situation before, and it’s really stressful. When I was in my early 20′s, I had a maxed out credit card and no savings, but someone I cared about needed my help. He was sick and couldn’t work when he was in and out of the hospital. He couldn’t pay for his bills, rent, or his medicine. So over the span of just under a year, I loaned him thousands of dollars out of my line of credit, with his promise that he would give every penny back to me. Ha!

There are plenty of other ways you can help somebody out financially, without handing over money. But when it’s somebody you care about, there are times where you might find yourself saying yes (like I did). Whether it’s a loan of $20 or $20,000, your ideal situation would probably involve recuperating all of the money you lent. Unfortunately, it doesn’t always work that way.

However, if you’ve weighed the pros and cons, and you still feel like loaning money is what you want to do, here are a few suggestions to help you protect yourself as best you can:

Loan or gift?

The most logical thing to do is not to loan the money – but to gift it – instead. For smaller loans, sometimes gifting the money is the easiest thing to do. You don’t have to worry about monitoring repayment schedules, what to do about late payments, or any hard feelings if the borrower can’t come through on paying you back.

If you decide that you will loan the money, you must still assume that you’re not going to be paid back. Many personal loans are never repaid, and you will be disappointed and resentful if you keep expecting money that will never be returned.

Don’t loan money you can’t afford to lose

Life can be unpredictable, especially for those who aren’t financially able to stand on their own two feet. Even the most responsible person can end up defaulting on a loan, so don’t lend any money you can’t afford to lose. This includes money from your Emergency Fund. You never know when you’ll need the money, and if it’s not there when you need it the most, not only will you feel resentment towards the borrower, but you might end up needing to borrow money yourself!

It’s also important to note that if you have any credit card or high interest consumer debt, or if you have to use credit to loan the money, you cannot afford to help out.

Get it in writing

Don’t make a verbal agreement. Make sure you put down in writing all of the fine print regarding the loan. Then have both parties sign and date it. Include the amount of the loan, interest rate (if applicable), repayment schedule, consequences for late payments, and potential collateral should the borrower end up defaulting on the loan. Try to be as specific as possible; you never know when it will come in handy down the road if something needs to be clarified.

Negotiating the nitty gritty payment details might cause some heated arguments and disagreements – after all, money is a sensitive topic. Consider bringing in a neutral third party to act as a mediator.

Pay directly

It can cause a lot of resentment and anger if you loan somebody money for a specific reason (like paying for tuition or the heating bill), only to see them spend it on something else instead. So if somebody has asked you for a loan for late bills, rent, or anything with a specific recipient, and you’re concerned the borrower might end up spending the money on something else, tell them you will only loan them the money if you can pay directly to where the money is owed.

Think twice about co-signing a loan

If you’ve refused a request to borrow money, and they’ve asked you to co-sign a loan for them instead, think really carefully about your decision. It might seem like a good idea, but once you’ve co-signed for a loan, you’re legally responsible for that debt. If something goes wrong and the borrower can’t – or decides not to – make payments, you’ll be stuck with the entire debt.

If you haven’t already been in the situation where you’ve been asked for money, chances are, you eventually will be. Deciding how you will handle the situation before it arises will ensure that you are less likely to be pressured into loaning money that you can’t afford, or don’t want to give. My relationship quickly deteriorated with the person I loaned money to. Once he was back on his feet, he started making small payments. However, that only lasted a few months before the payments stopped – not because he couldn’t afford them, but because he didn’t feel like making them anymore. I eventually sued him (and won) in small claims court, but to this date, I’ve recovered less than half of what he owed me. It’s something I hope to never go through again, and that’s one learning experience I’ll never forget.

I still lend money occasionally, but in much smaller amounts (usually never over $100), and I never expect to get my money back (although it’s great when I do). This leaves me with no room for resentment or anger, and our friendship stays in tact.

So if you do decide to loan money to a loved one, remember that no matter how agreeable the borrower is to your rules and terms of payments, or how enthusiastic they are about paying you back, you might not end up with the happy ending you want. Hope for the best – but make sure to plan for the worst.

Have you ever loaned money to a loved one?

Monday 7th – Amsterdam, Netherlands
$4.91 (€3,80) transit from Amsterdam to airport
$6.20 (€4,80) lunch
$4.52 (€3,50) transit from airport to Stuttgart

Tuesday 8th
$19.50 (€15,09) groceries

Wednesday 9th
No Spend Day! 

Thursday 10th
+ $350 freelance income
$6.46 (€5) drink
$1.29 (€1) gelato

Friday 11th
No Spend Day! 

Saturday 12th
$13.69 (€10,59) groceries
$3.36 (€2,60) transit
$11.63 (€9) lunch & drinks
$3.36 (€2,60) transit
$14.22 (€11) movie – Avengers in 3D
$3.36 (€2,60) transit
$5.82 (€4,50) doner kebab

Sunday 13th
No Spend Day! 

WEEKLY EXPENSES: - $98.32
WEEKLY INCOME: + $350

TOTAL: + $251.68

I love spending less than $100 in a week. :) It makes me feel a lot better about my spending when we go traveling. I managed to have 3 No-Spend Days – even one on a weekend! Oh, and I also met up with a Moneyville/Toronto Star reader who had just moved to the Stuttgart area – what a small world, eh?! It’s nice to know someone here from Canada, and I’m sure we’ll meet up again soon.

We took in a free cartoon film festival on Friday night, although we did definitely splurge on Saturday. There was a carnival happening in a suburb of Stuttgart, so we went to drink beers and have lunch. The amount of beer halls they constructed on the fair grounds were incredible, and so many people (young and old) were dressed in traditional dirndls and lederhosen – it was really cool to see! After the carnival, we headed to another suburb to go watch Avengers at the English movie theatre. Has anyone else seen the movie? I thought the fact that some of the movie took place in Stuttgart was kind of awesome and random (although it was actually filmed in Cleveland).

I think that most of us – at some point in our lives – have thought about quitting our day jobs to try and start our own business, or to become a freelancer. But as I embark on month four of fulltime freelancing, I have to say, it’s a lot harder than I thought it would be. And even though I feel grateful that I’ve had success so far, there’s nothing wrong with staying in a corporate job, and I’m beginning to realize that for a lot of people (maybe myself included), freelancing will never be the right career move.

If you’re thinking of making the move to freelancing, here are a few things you should think over:

You need experience

If you’ve just recently graduated from school, chances are you won’t have the experience, the portfolio, or the network you need to become a successful freelancer. Sure, some people can make it happen immediately, but it’s extremely difficult to prove your value and show clients that you’re capable of taking on their projects if you have nothing to show them but the work that you’ve done in school.

I would suggest starting a freelancing career in your spare time, and woking a full-time job in order to gain experience. That way, you will start to build a freelance client base, and still keep money flowing in to pay the bills and help fund your business. It might be more difficult this way, but it provides much more security, and you are more likely to succeed at freelancing once you do decide to go for it full-time.

It is not easier than a corporate job

Did you hear me?! :) A lot of people look at freelancing as a way to make more money with less effort. After all, you get to keep all of the money you bring in, and you don’t need to share it with the employer. But becoming a successful freelancer takes time, and it’s not for anyone who is looking to make fast money.

When most freelancers start out, they can’t be picky about the work they receive. So if you think freelancing is a way to get out of the tedious and boring assignments your boss at your day job gives you, think again. You will definitely get your chances to be creative and unique, but ultimately, if your client wants to go in a completely different direction than what you’ve proposed, you have to suck it up and do what they want – even if you don’t like it. Not only that, but all of a sudden, you will have to do everything that comes with running a business.  You will speak with the clients, create the marketing campaigns, pay the invoices, and do all of the administration work – including filing, answering phone calls, and replying to an endless sea of e-mails.

Time management skills are essential

This is one of the most important aspects of freelancing, but it’s also the hardest. When you work for yourself, you can forget about working a regular 9-5 schedule at the beginning. You will most likely end up working long hours for the first few years until you get more established. It’s also likely that you will end up wasting a lot of time in the first year, as you set up processes and ways to keep track of everything that works for you.

When I quit my full-time job, I thought I’d open up so much more time to write. But I think I average about 40% of my time on administration duties. It’s insane! But the administrative side of the business is extremely important, and if you don’t keep on top of it all, you will miss out on a lot of opportunities, and probably piss people off in the process. And I realized that a “regular” schedule just isn’t going to work for me – especially being on the other side of the world and fighting the time difference.

The competitive edge

You likely won’t be be the first in your line of work, and you certainly won’t be the last either. So in order to succeed, you will need to market and promote yourself harder than anyone else who is already doing it, and better than those who are coming up behind you. So if competition scares you, then freelancing is not the right career move for you.

Check out your competition and see how you can stand out from everyone else. Think about ways you can show prospective clients why you are the best option, and if you can tap into a niche market, or find some sort of hook, try to see where it will take you.

It can get lonely

Being by myself all day, every day was a really, really hard adjustment for me, and I know a lot of people end up back in the corporate world just because they can’t handle the loneliness and isolation. While social interaction does happen as a freelancer, you probably won’t have co-workers around to joke with, or anyone to bounce ideas off of. Some people just work better and are more creative when they have people around them.

I expect that when I move back to Vancouver, I will have more interaction with people during the day, but the thought of going back to a full-time job has crossed my mind more than once. Because while part of my hesitation with continuing as a freelancer is the lack of interaction with people, it’s also the income (or rather, the savings) that I miss. I consider myself to be one of the lucky bloggers who has been able to make a living from blogging and writing, but the opportunity to work long hours won’t be around forever (children will eventually come, and I won’t have the energy to work 12+ hour days). So if I can stretch myself, work more, and save more towards the future, I should do it while I can. At least, that’s my thought right now. We’ll see what happens in four months when I get back home.

I headed to Milan with my friend, sister and mom – who were all visiting from the Vancouver area. We all traveled to Milan from Munich by plane. If we had more time, we would have gone by train (which was the same price as the plane ticket), but because my sister and mom were only in Europe for less than 2 weeks (!) we had to save time wherever possible.

Cost

Accommodation (3 nights): $80.63 (€62)
Transportation: $81.86 (€53)
Food: $107.72 (€82,90)
City Transit: $14.94 (€11,50)
Entertainment: $20.14 (€15,50)
Miscellaneous: $5.20 (€4)
TOTAL: $310.49

Accommodation

Milan was one of the only cities where I did not use my Hostelbookers sponsorship.

We stayed in a 4-person dorm at the Monastery Hostel (2 bunk beds). Our price was about €21 per person, per night – which I think was a little bit pricey compared to some of the other hostels I’ve stayed at before. But the location was right – really close to a metro station, and the amenities were good. There was free wifi access, and you could even rent iPads!

A couple of complaints: the hostel was really hard to find because for some reason there was no outside signage. It also felt a lot like a hotel instead of a hostel – there was no comfortable lounge area to meet people. The bunk beds were kind of weird, and felt like I was sleeping in a box. Oh, and this wasn’t a problem for me but my mom’s biggest complaint was that the shower door didn’t work that well.

Entertainment

We spent €10 to walk the stairs to the top of the Duomo di Milano, the cathedral church of Milan. I definitely recommend it! The views from the top were incredible, and you get to really take in how much effort must have gone into building the church. The entrance to the staircase is kind of hard to find, but if you’re facing the front of the church, it’s on the left-hand side of the building.

Also a word of warning, the Piazza del Duomo (Cathedral Square) is absolutely full of street beggars. They will try to put bracelets, bird seed, or other objects in your hand – even if you refuse. And then they will follow you and ask for a donation. If you are taking a photo of the building, someone might ask if you want pigeons or soap bubbles in your photo – then they will ask for money. They’re very persistant and pushy!

We also spent €5,50 for the entrance admission and audio guide for the Castello Sforzesco Museum. It was a really good value for what you get to see – even the last sculpture created by Michelangelo. It’s called the Rondanini Pietà, and he worked on it until the last days of his life.

The high fashion district was also unreal! I had only heard of – and never seen in person – some of the stores that were there. Each store had security guards, which kind of made me not want to go in. Not that we could have afforded to buy anything anyway. :) But it was incredible to see all the Italian men and women that walked the street in expensive and beautiful clothing. How do Italian women look so good in such hot weather, and how do they walk in 6 inch heels on cobblestone without breaking their ankles? That will always remain a mystery to me.

Food

In Milan, the food was expensive, but we ate at moderately priced restaurants in the  €10-15 range. I don’t think I ate a meal that wasn’t either pasta or pizza, plus gelato for dessert, of course. :)

From L-R, the pictures are: cannolo, vegetarian pizza, tiramisu, gelato.

I wanted to keep quiet about the 13-week student strike that’s happening in Quebec right now, but it’s just getting out of hand. For those that know me, or have been reading my blog for a while now, you probably know that for the most part, I am against student strikes. Especially this one, where they are striking over rising tuition fees.

While I respect the students for standing up for what they believe in, we really do need to put this whole thing into perspective. The tuition increases (which are extremely reasonable) are inevitable, and to think otherwise is just plain foolish.

Here are a few reasons why I think Quebec students need to stop striking:

Quebec students already have the lowest post-secondary tuition fees in the country

Universities in Quebec are heavily subsidized by the government. And as a result, Quebec students enjoy the lowest post secondary tuition in Canada.

Check out this graphic from QuebecTuitionFees.com for an example of University of Montreal tuition fees compared with schools across North America:

According to Statistics Canada, the average undergrad tuition fees for full-time B.C. students in 2012 is $4,852 per academic year, and $6,640 in Ontario. Compare that to the graphic above, and that’s a huge difference!

As a result of Quebec’s already subsidized tuition rate, Quebecers pay the highest tax rates in Canada. Quebec also receives the most money from the federal government in equalization payments – at $8.5 billion each year. Meaning my tax dollars are going to support Quebec’s subsidized tuition rates. And how do they show their gratitude? By smashing store windows, setting cars on fire, and creating major delays in the subway system – causing havoc for the thousands of tax-paying workers who are paying for the students’ education. And now the students are trying to get more? Come on.

The increases are minimal and fair

The proposed tuition fee increase is $1,625 per student, spread over seven years. That’s $232 a year. This is what the students are striking over?

What does $232 per year actually mean to these students? It’s a few less dinners out every semester, or a few cases of beer not purchased. It’s not a life-altering amount. Yeah, it sucks to have to pay more, but that’s life. Prices increase over time. And in the end, even with that increase over seven years, their tuition will still be much cheaper than anywhere else in Canada.

Here’s a thought: if these students put in just a fraction of the time and effort they’ve put into protesting into a part-time job over the last 13 weeks, they would have easily made enough money to cover the entire tuition increase by now. Just sayin.

They claim they are protesting on behalf of future post-secondary students

In 2016-17, tuition fees in Quebec will still be lower than the Canadian average in 2009-10. Think about that.

Striking students claim they are protesting on behalf of the high school students that will not be able to attend university because of these increases. But the majority of them WILL be able to afford the $232 per year increase. Plus, the government has promised to increase bursaries and financial aid for poor and middle-class students by an additional $39 million – thereby offsetting the tuition increases for those who cannot afford them. Still, it doesn’t seem to be good enough.

Tuition increases are inevitable

With everything costing more these days, it’s no surprise that tuition fees will also increase. In the real world, that’s what happens. Maybe education is too expensive, but the last time I checked, you have a choice. Nobody is forcing you to get a degree. True, an education might make you more employable and it might create a better future for you, but it’s not guaranteed, and that is a decision that you get to make on your own. Remember that education is a privilege, not a right.

Students that have a desire for higher education will find a way to pay for tuition. Apply for scholarships, grants, bursaries – that’s what they’re there for. The Quebec government has made sure there are plenty out there for those that qualify. Get a part-time job. Take on some student loan debt if you have to. Millions of students have done it before.

These Quebec students want more than what is fair, and they don’t want to make any sacrifices either. But in the real world, we all have to make sacrifices. It’s a part of life. With the increase in groceries, gas, housing, etc. that we are facing every day. we are all making sacrifices. And we aren’t pouting or throwing temper tantrums every time something doesn’t go our way.

These students reek of self-entitlement, and they truly have no idea how good they have it compared to everyone else in North America. If I were then, I’d stop complaining, stop breaking things, stop rioting, stop trying to intimidate people, and just get back to class. Before more tuition and more tax dollars are wasted. Seriously.