By BRIAN KOELLER
(AP) — Paying down debt might be a big goal for many in the new year, but saving more money can also help improve one’s financial outlook.
“One of the easiest ways to do this is to set up an auto pay to a savings account,” said Jill Gonzalez, financial analyst with Wallethub.com. “That can act as your emergency fund.”
She added setting up the automatic payment into the account out of each paycheck can be viewed just like setting up an auto bill pay.
“You know that money is coming out already,” Gonzalez added.
Being financially literate is also important, and Gonzalez said it can be a good idea for parents to start teaching youngsters at home.
“Taxes and that sort of thing are still not taught in school,” Gonzalez said. “One of the earliest things you can do is work things into their allowance.”
She suggested parents set up a debit card for children, in which their allowance is placed into it and anything they purchase comes out of it.
“That way they know every time they swipe that card, it’s not Monopoly money coming out of there, it’s real money that disappears.”
She also suggested parents could work modern technology into their financial literacy talks to better prepare their children for future developments.
Gonzalez also stressed the need to pay bills on time, pointing out not doing so can lower a consumer’s credit score, making it harder to obtain loans or to get beneficial rates on a loan.
For instance, Gonzalez said a good credit score could save up to $1,400 on an auto loan.
“One of the most avoidable mistakes is missing due dates on bills,” Gonzalez said. “Look into setting up automated payments for credit cards and some utilities, like cable.”
Paying on time is important, but if one is missed she said it’s not a cause for concern.
“Missing one isn’t the end of the world, and many times you can even call the company and explain to them it’s never happened before and ask them to waive the fee and tell them it won’t happen again.
“But if you consistently miss bills, that will lower your credit score.”
She pointed out if someone knows they have a major purchase coming up that they will need to obtain a loan for, they should work at improving their credit score as soon as possible.