By Stephen Fournier, President, Central New York Market, KeyBank

New Year resolutions usually fail for one of two reasons: the goals are either too vague or too unrealistic. This is especially true with financial goals, which typically focus on outcomes—spend less, save more, pay down debt—more than actions.

For those of you who set financial resolutions, and more than 25 percent of people do, the problem with looking at outcomes is that the underlying problems that lead to financial distress or dissatisfaction go unaddressed. This is why, even though January is not yet over, your hopes for meeting your 2018 financial resolutions are. But don’t despair…it’s not too late to recommit.

Assess your financial wellness

Are you currently living debt free? Have you recently splurged on a vacation or holiday gifts for loved ones? According to a recent survey by MagnifyMoney, the average American racked up more than $1,000 in debt during the 2017 holiday season.

Is your retirement on track? What about your monthly expenses…are you keeping up?

Financial wellness does not necessarily mean you live debt free or have no money problems. Rather, financial wellness is about the journey toward realizing productive financial outcomes…a journey that begins with identifying your current financial situation and taking actions that lead to sustainable financial habits and behaviors.

Here are seven actions you can take in 2018 that can help you identify your starting point, develop an action plan and make measurable progress toward achieving your goals.

1. Review your spending habits. Focus on what you buy by differentiating wants versus needs. Also, consider how often you use credit to buy the extras and whether or not you should reserve credit cards for major, significant purchases you can pay off promptly.
2. Stick to your budget. Budgeting for food, clothing, entertainment and other extras helps you understand where you allocate your income. If you use online and mobile banking tools, checking your account balances and transactions is that much easier. KeyBank’s HelloWallet financial wellness tool can help you see where your money is going and help make budgeting easier.
3. Control credit card debt. Come up with a debt elimination plan. One strategy is to tackle high interest cards first. An alternative approach that can help you feel like you are making quicker progress is to attack lower balance cards first. Once a card is paid off, apply that payment amount to the next card. As each balance is paid in full, the amount of money available to pay down the next card increases. Finally, once you get your credit card account balances under control, pick one card to cover unexpected necessary expenses and pay cash or use your debit card for the rest.
4. Review your credit report. You are entitled to one free report a year from each of the three major credit-reporting agencies—Equifax, Transunion and Experian. Check for and fix discrepancies. Inaccurate information can affect your credit rating.
5. Contribute to savings. Commit even just a small percentage of your paycheck to your savings account. Automate transfers so you don’t have to think about it. Just don’t make it an arbitrary amount. Work your budget so you can know how much you can realistically afford to contribute on a regular basis.
6. Build an emergency fund. This should be a priority. The quickest way to derail financial progress is to get hit with a large, unexpected expense you are not prepared to pay. Your emergency fund should be, at minimum, 3-6 months of your living expenses.
7. Adjust with life changes. Even if you consider yourself financially healthy, always work to maintain your financial wellness—especially through life changes. If you are considering changing careers, buying a home, having a baby or even getting closer to retirement, revisit your financial plan and long-term goals with a financial planner. In particular, review your insurance coverage, retirement plan, will and estate plan.

Just as with physical fitness, there are different levels of financial wellness. However, people who consider themselves financially well typically have a strong credit score, retirement savings rate, emergency savings fund and positive net worth.

The important takeaway is that financial wellness is not about identifying the big picture goal. It’s about action—understanding that the little battles and new habits make the big picture outcomes possible.

With this in mind, revisit your 2018 New Year financial resolution. Is it realistic? Are actions well defined? Can you hold yourself accountable? Or are you overwhelmed? If you feel overwhelmed, start smaller. Simply bettering your financial situation is an accomplishment, and if you can check off one or two things from this list by the end of the year—resolution or not—you’ll be more financially well than you were last year…and that’s an accomplishment to celebrate.

About the author: Stephen Fournier is president of KeyBank’s Central New York Market. He may be reached at either 315-470-5096 or [email protected].

Three simple money-saving strategies

If your New Year resolution is to save more money, here are three money-saving strategies you can adopt right away.

Direct deposits

According to National Automated Clearing House (NACHA), 82 percent of Americans are paid via direct deposit. In addition to convenience, there are financial benefits as well. For example, you can split your deposits—dedicating a percentage of every paycheck to savings. This means that, absent of regular effort on your part, your savings account will grow with consistent contributions.

To set up direct deposit is easy. Most employers provide direct deposit signup forms. You will need to provide your bank account number and routing number. Your bank may also provide a direct deposit form you can submit to your employer for payroll and retirement and dividend deposits.

Carry big bills

People commonly carry more plastic than paper in their wallets. The problem with this is that people typically spend more with credit than cash. Also, the type of cash you carry makes a difference. According to a study from the University of Maryland, people are more likely to think about a purchase when they have to break a $20 or $50 bill. In fact, when asked to choose a dollar denomination when faced with a spending self-control exercise—can you save $100 when given cash to spend—most participants chose a $100 bill. So if you want to spend less, which in turn will allow you to save more, leave your credit cards