You need that little nest egg for yourself just in case an unexpected expense or emergency comes up. 

Rising cost of education

I want to pause to say congratulations to all the 2012 graduates and wish nothing but the best for your future. This is a time when you can make your parents proud, walking across that stage as your name is called.

I hope everyone has thought about what’s the next chapter in your life, be it the service, a job, and hopefully college for high school graduates – knowing a lot of parents just can’t afford to send their children to college.

Many of the protesters occupying Wall Street and other places say they are upset about the rising price of going to college. Tuition and other costs have been going up faster than inflation and family incomes can’t keep up. Despite public outrage about the problem, there’s little sign these costs will drop anytime soon.

Student loan debt is usually thought of as a young person’s problem or something left for parents to pay on it a long time. Those who graduate college this year, I am sure will have student loans of at least $25,000, considering that education costs are rising and the job market is especially bad for young people.

In today’s economy, it’s important to cut costs but eliminating some things such as insurance is not a wise thing to do.

Insurance is designed to protect you in the case of an accident but a few slip ups on trying to save money on insurance could really cause your financial health harm.

For expenses you pay annually, such as insurance premiums, I want you to break them down into a monthly number. Just take the entire amount you pay annually and divide it by 12. Enter that on the right with the totals. You don’t need to break it down into weeks. We do this because we really want to earmark that money for the premiums we have to pay and make sure we are planning for them.

This money is not “extra” cash.

It will be used for these expenses at some point in the year. For that reason, it should have an impact on how much you spend on a monthly basis. You may not actually have a particular expense every month but you do need to plan ahead and save money for that purpose.

Saving money is something we should all learn how to do. But, it isn’t as simple as one would think. People try all kinds of ways to save money yet what’s important is to do it regularly and to make budgeting a habit.

You can’t expect to just sock away thousands of dollars overnight.

There are several steps you need to take before you can even think about investing in the stock market, retirement plans, or anything else above and beyond what you use for paying bills.

While I was growing up, it was not uncommon for parents and grandparents to have special savings accounts for college. It’s not too late to start saving for your child. I hear many say I cannot save because of other issues.

Yes, you need to have some money in your bank accounts before you can start pumping money into the stock market, real estate, and mutual funds. Typically for a client, I would recommend that you have at least three months of expenses saved.

You need that little nest egg for yourself just in case an unexpected expense or emergency comes up. 

James W. Wade III on twitter @JimmyWadeIII