Tips

Bill Rancic’s Road Map to Financial Success

by Rachael Ray Show Staff 12:25 PM, January 12, 2015

Aired January 13, 2015

Bill Rancic has a budget breakdown that’ll set you up for financial success in no time! “Your budget is your road map,” explains Bill. “When you get in the car you have a destination to where you’re going. When you start the year off, you have to have a budget. It helps you get out of debt, and it helps you have that safety net so you can prepare for the rainy day God forbid anything were to happen.”

He advises analyzing your income and diving it into three buckets:
1.    Needs  Something you can’t live without  ie: rent, medicine, basic foods and necessities.
2.    Wants  Something you think you need but really don’t
3.    Savings  Preparing for a rainy day in the event something happens such as a job-loss, injury, etc.  Bill explains it’s wise to have three months of expenses in reserve that can cover everything in your Needs category.

Many people fear checking their credit score may actually do more harm than good. Bill debunks this myth by explaining the differences between a soft credit score check and a hard credit score check. A soft check, such as inquiring about your credit score yourself will not harm your score. Applying for a credit card or loan are hard checks, and doing this too often can harm your score.

If you don’t use credit cards, there is a chance your credit score will be low because of it. Bill advises to open a credit card with low interest, use it, and pay it off every month. This will slowly help you establish good credit over time. Even married couples should have their own credit cards in their own names; if they ever get divorced, they’ll both have their own credit established instead of it only being under one person’s name.

Watch the video below for even more financial tips from Bill.