Five budgeting tips from CEOs that anyone can use

Cash-strapped Americans trying to create or stick to a budget need look no further than CEOs from Corporate America.

After all, corporate execs have mastered the art of cost-cutting and reining in expenses. Check out these five strategies Corporate America uses to stick to a budget -- and learn how you can too.

1) Maintain "Just in Time" Inventory

Explanation: This technique protects companies from getting stuck with too much stuff -- and paying the high cost of acquisition, maintenance, storage and distribution for excess inventory.

Lesson: To be financially frugal, keep it lean. If necessary, you can always acquire more of what you need later.

What To Do: Don't spend today's money on "next season's" clothes, "next year's" birthday gifts, or anything else that's too far out. Improve your cash flow by only buying what's required now -- or over a relatively short time period.

For example, a couple with a newborn baby should resist the urge to run out and buy a new minivan, according to Michael B. Rubin, a Certified Financial Planner™ who runs Total Candor LLC, a financing planning firm in Portsmouth, NH.

Rubin, who is also the author of a book and blog called Beyond Paycheck to Paycheck, says: "Infants require a lot of stuff, like milk and clothes, but they don't take up much room. So the current sedan is going to be good for a long time."

2) Use Competitive Bids

Explanation: Corporations are ruthless about getting the lowest possible prices. They score great deals, especially with when buying big-ticket items and bulk products, by putting those things out for a competitive bid process.

Lesson: Make others compete for your hard-earned dollars.

What To Do: Always comparison shop – particularly for major purchases like a house or car. By getting lenders to vie for your business, and offer the most attractive rates and terms for which you qualify, you can save thousands of dollars.

Besides, technology has made house-hunting and car shopping dramatically easier, Rubin notes. To get competitive bids for a mortgage, try LendingTree.com or use Kelley Blue Book for car pricing information before getting online quotes directly from car dealers or through services like Edmunds.com.

3) Lean on Vendors and Suppliers

Explanation: Even after selecting various vendors and suppliers, CEOs and corporate execs are always squeezing their vendors for better pricing and terms.

Lesson: A good deal is only good when you first get it. Whether or not it remains a good deal depends on ongoing competition and future circumstances, which can change.

What To Do
: Routinely re-negotiate. Ask insurers for lower premiums or additional discounts. Get more minutes from your cell phone carrier, or ask your Internet/cable company to offer you the same sweet deal they're offering to woo new customers.

4) Practice Asset Divestiture

Explanation: "Asset divestiture" simply means "Sell it, Shut it Down, or Get Rid of It." Companies adopt this strategy to raise cash quickly or to stop bleeding red ink.

Lesson: Don't keep money-drainers and useless things. Even if you must sell at a loss, do it.

What to Do: Sell stuff you don't want, need or use, including household goods, electronics, clothes and toys. You can even dump lousy investments, like poor-performing stocks, and get a tax break from Uncle Sam.

Can't sell something? Donate it, and get a tax deduction. According to ItsDeductible.com, from Intuit, charitable contributions often bring bigger tax deductions than most people think.

5) Be Aggressive with Collections

Explanation: When companies are owed money, they spring into action by calling, sending letters or threatening to cut off credit or access to additional products/services. In short, they do everything possible to collect on outstanding accounts.

Lesson: Budgeting isn't just about limiting outgoing expenses. Cash inflows should constantly be scrutinized too.

What To Do: Stop being a financial pushover. If family members, friends, co-workers or even bosses or clients owe you money, speak up about it. No need to be rude or use hardball collection agent techniques (not yet, at least). But don't let others conveniently "forget" what they owe you.

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