ALBUQUERQUE, N.M. – The holidays can leave you feeling less than jolly while looking at your bank account, but there are ways to take control of your finances in 2025.
“All the studies show that financial stress when you’re out of control has profound effects on physical health and also on relationships. It’s bad news,” said Charlie Bergman, who teaches financial literacy at St. John’s College in Santa Fe.
He says the first step to getting your finances in order is to make a budget. That starts with looking at where you spent your money at the end of the month, then go from there. There are several budgeting systems, but Bergman likes the envelope system.
“You literally label a small number of envelopes, no more than ten, things like grocery, rent, medication, discretionary, and you stuff a certain amount of actual cash into those at the start of the month,” he said. “Once the envelope is empty, that’s it. No more money.”
Don’t forget cash for debt payments, that’s your main priority, according to Bergman.
“If it’s a credit card debt problem, which is the most typical one, you want to make sure you pay off at least the monthly minimum amount,” Bergman said. “If you do that, you’re saved from horrendous interest rate charges.”
He says the gold standard though, is never use your credit card unless you know you can pay off the full amount every month.
Next, work to build up your emergency cash fund. That means save enough money to cover your costs for six to 18 months.
“If things go sideways on you, you lose jobs or there’s a market downturn, there’s an emergency, there’s medical, you don’t want to have to sell off your investments,” he said.
Once you accomplish those three goals, Bergman says it’s time to invest.
“Your investment consists of three exchange traded mutual funds. That’s it. The industry wants you to think you need 12, 20, 25 of them. You don’t,” Bergman said.
For more investment tips, Bergman recommends the book, “How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn” by Allan Roth.
For more financial tips, you can watch our full interview with Bergman here.
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