Making this year your year for a money makeover doesn’t have to be painful. In fact, small steps can lead to big changes.

4 easy steps to a major money makeover

1. The one-card wonder

Take all of your credit cards, except one, and put them in an envelope. Secure the envelope using a bunch of tape — really roll it up! Then, tuck that bundle of plastic pain in the back of an unhandy drawer, like the one in the kitchen with all the expired coupons and corkscrews or the drawer in the storage closet with the left-handed garden glove and the old television remotes.

Now you’re on an easy-to-follow debt diet. You’ll only use the one remaining credit card while you pay the others off without adding to their existing balances. You may even discover that once those cards are paid off, you’ll never need them again. The “one-card wonder” has forced you to trim credit card spending and pay off debt, and, as a result, likely boosted your credit score.

2. Tune up your car insurance

Sometimes we go on autopilot when it comes to our personal finances. The car insurance bill comes in and we pay it. It comes in again and we pay it again, never really taking a moment to review the coverage and rates.

As your car gets older, you may want to consider adjusting your deductibles and comprehensive coverage. Plus, as time passes between accidents, traffic tickets, and claims, you earn a better rate. Paying annually rather than monthly or quarterly can also save you money.

Find out how much coverage you currently need and adjust your policy accordingly. Talk to your insurance provider about discounts you could be earning. And get some price comparisons to see which provider can offer you the best rate!

3. Revisit your home insurance

Many homeowners pay their insurance premium as part of escrow withdrawals built in to their mortgage payment — talk about an unseen expense.

But since you’ve kicked up your credit score with the “one-card wonder” debt diet, you may qualify for lower premiums. Insurance coverage for your home can sometimes offer even more savings than the discounts you might find on car insurance. And adjusting deductibles, bundling policies, and installing a security system and smoke detectors can also earn you homeowners insurance discounts.

4. Start an unaccounted-for account

The trouble with financial planning is it’s so dang complicated. IRAs, ETFs, 401(k)s, W-2s … is your head spinning yet? Here’s how to break the code: start an unaccounted-for account. It can be a savings account, a separate checking account, or a brokerage account — it doesn’t matter. We’re not making big decisions here, we’re just getting started.

Each month, or better yet each week, make a deposit to this account. You can write a check to yourself, arrange for an automatic transfer, whatever. Just divert money to this account and think about it later.

So many people get caught up in trying to do the best thing that they end up doing nothing. Can’t decide right now if you need a Roth or regular IRA? Figure it out later. Exchange-traded funds or mutual funds? You’ll get to that. Stocks or bonds? Not important right now.

The key is to build up the account balance to a point where it will become necessary to make a decision. (And that’s where we can help.) In the meantime, it’ll serve perfectly as your emergency reserve fund — perhaps earning a bit of interest, but mostly on standby for higher purposes. Later, you can begin siphoning some of it off into an IRA or investment account.

But just remember: the most important thing is to simply start.


DIY hacks | For your finances


about Hal M.

Hal M. Bundrick is a Certified Financial Planner® and former financial advisor and senior investment specialist for Wall Street firms. He writes about personal finance and investing for NerdWallet. Follow him on Twitter: @HalMBundrick