(saving can be fun)

We have all heard the words “living within your means” or “living within your budget”  these are strong words and often difficult to do. 

The best way to avoid credit issues down the road is to take the time to sit down and make a realistic monthly and annual budget based on your income situation.  List your sources of revenue or income for the month in one column and total that figure.  Next, list your monthly expenses such as rent or mortgage, utilities, car expenses,  insurances, food, clothing, school expenses, any wage garnishments etc.  Total these items and then subtract your Expenses from the Income  - the figure left over is called “discretionary income”. 

Discretionary Income is any money left after your necessities of life have been paid  and can be used  for the fun stuff, movies, lattes, vacations, etc. 

Years ago there used to be a program with many local banks called “Christmas Club”.  It was a savings program where you set the terms and deposited monies into each month over the year and it earned interest.  Then in early December you could withdraw the money and you had your Christmas money there ready to go without having to use credit to fund your Christmas purchases.  The idea was great, it made you feel good that you were saving along the way and was lots of fun to withdraw!   In December you started your next “fund” for the following year.  If you do not remember hearing about them, ask your parents or grandparents.

We can incorporate the same idea now.  What would work for you “Vacation Fund”, “Laptop Fund” “New Car Fund”  be creative and try it, you will like it.  Include in your budget under Expenses – make a plan and stick to it! 

Take this one step further – get your children started and show them how much fun this can be for everyone!

DO YOU KNOW WHAT TO DO?

In these financially difficult times, ask yourself “Does someone owe me money?’   If the answer is “Yes!”  how do you go about collecting from them?

Individuals, as well as, businesses have much of the same procedure for collection monies owed to them.  If you find yourself in this situation, check to make sure that you have sent the offending party a bill for the “services or product”.  If the answer is “yes”, hopefully, you kept a copy of the invoice.  If you have not done this, this should be your first step.   On your invoice state what the bill is for and the amount due, make sure you have the date on it, your name and mailing address and that you give them time to respond “Due within 30 days”.  Double check that you have the correct address and send it off!  If you have not been paid or contacted by the party that owes you the money then you can go to the next step.  There are statute of limitations that apply to outstanding bills and simply put, they are:

                        Oral contract                2 years from date of service or sale

                        Written contract            4 years from date of service or sale

If a payment has been made within the 2 or 4 years, the statute is extended by 2 or 4 years depending if it is oral or written.

Small Claims Court is an option that you might consider next. Again, it must be initiated within the 2 or 4 years for oral or written.  You can obtain more information at the local court on the small claims process and nominal cost to start the process.  The Nevada County Court, Civil Division has packets available on the steps you need to take to go through the process.  When you go to court, be prepared with adequate copies of your documents and witnesses, if you have them.  Judges in small claims court are very helpful and patient, they understand you are new to the process.

If you prevail in court and obtain a judgment you have more options available to collect.  You can do wage garnishments, bank levies and file liens on the debtors property.  Judgments are good for 10 years and renewal for another 10 years until collected.

Another option is to assign your small claims judgment to a collection agency to handle if you do not want to go through the enforcement processes.  Your local agency is well versed in these steps and will be able to help you.

As said in the beginning, the steps available to businesses are the same as to individuals.  So, do not let money go uncollected – it is your right to collect!

“How is the economy effecting your business?” is what we are all hearing during these very unpredictible and uncertain  economic times.   The popular feeling is that as a “collection agency”  we must be really booming.  In September, the California Association of Collectors group that we are a member of conducted a survery asking this very question of collection agencies.

Some members reported they are experiencing more inventory, but it is less collectible or the recovery cycle is longer or non-existent.   There are peaks and valleys in the economy when the economy starts to boom, receipts will reflect that.  Meanwhile, keep a close eye on expenses using caution when budgeting for 2009.  Be flexible, look closely- there may be a diamond in the rough.  Ride the wave carefully.

Sound familiar?  These comments can be applied to almost any type of business or personal situation.   We are here for the long haul and look forward to the cycle changing for the good.  E-mail us your comments.

Do You Have A Little Sherlock Holmes In You?

One of our main functions as your Collection Agency and an extension of your office is to locate a debtor,be they far or near.  Our staff is constantly on the lookout for debtors in the area, at the market, retail stores, anywhere out on the street.

We can always use our clients assistance whenever they might *spot* a debtor.  Very often you might know your debtor on sight (without a name tag or business card) when you happen to come across them out in the world.

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You can help us, help you, by giving us a call with any updated information you might have.  It takes all of us working together to *Sherlock Holmes* these accounts.  Your call and information will remain confidential.

• Four Dragons aka Kinta psp