Start small.

While you should eventually build an emergency fund that can handle more serious emergencies (economic downturn, loss of job, etc.), you’re going to want to start by putting together a short-term emergency fund. Your short-term fund is meant to take care of unexpected expenses that while not severe, can still mean trouble if you aren’t prepared. Things like a car repair, replacing a broken window, or getting a parking ticket are all things that can be covered by your short-term fund. Ideally, you’d want this to range anywhere from $500 to $1,000.

Figure how much you’ll need in the long run.

Chances are, if you find yourself out of work or the victim of a natural disaster, $500 to $1,000 won’t be enough to keep your head above water. So to make sure you can keep you (and your family) financially stable for an extended period of time, it’s best to save anywhere between three to six months’ worth of expenses. That may sound like a lot of money (and in most cases it is), but having something to fall back on will make your recovery process all the more easier.

Building yourself a budget is a great way to figure out how much you should aim to save for a long-term emergency. Figure out what expenses you’d really need to be covered (food, shelter, major utilities) and which you can do without for a short period of time (cable bill, online subscription services, etc). Once you get that number, you can start working out a savings plan for yourself depending upon how much you’re able to sock away each paycheck. It might take a lot of time, but having a specific number in mind can really help to keep you motivated.

Tighten up your budget.

If you’re struggling to come up with money to put away for an emergency fund, there’s no better way to boost your cash flow than by tightening up your budget. Writing a concise list of your needs and wants can help you identify what areas of your budget you can cut back on. Think of the extra money you could save just by cutting back on dining out or going without Netflix for a couple months. Once you’ve met your savings goal, you can transition back to your regular spending habits with the peace of mind that you’ll be able to handle almost anything that comes your way.

Drop your debt.

While you’d ideally want to take care of both simultaneously, paying down debt and saving money isn’t something that’s feasible for everyone. In situations like these, it may be in your best interest to prioritize paying down your debt first. The longer you carry debt, the more interest it builds and the more you’ll have to pay over time. Taking on high-cost debt (credit card debt, for example) can also be an emergency in and of itself and be a huge drain on the emergency fund you worked so hard to build.

Furthermore, carrying a high balance on your credit card can have a negative impact on your credit. And the lower your credit score, the more likely you are to get higher interest rates on future loans and credit cards. Getting out of debt, and avoiding unnecessary forms of it, can help you maximize your contributions to your emergency fund and ensure it’s there for when you really need it.

Most people don’t realize how important an emergency fund really is until they’re actually faced with a serious emergency. Putting in the time and effort to build an adequate emergency fund is a simple way to make sure you and your loved ones won’t fall into debt. So do yourself a favor and take the time to evaluate your expenses, build a budget, and start saving today!

Costs related to an unexpected illness or accident can spiral. Here’s the truth about savings in America: We all talk a lot about how much we should be saving and spending, but the majority of us don’t save enough to pay for a surprise expense that must be covered immediately.

More than 60% of Americans don’t have enough money stashed away to pay for unforeseen expenses such as a $1,000 visit to the emergency room or a $500 fender-bender, according to a Bankrate.com study.

The same survey found that 82% of us keep household budgets — mostly with pen and paper or in our heads, but we look to outside help to pull us out of a financial crisis.

Staying afloat after a job loss.

We also seem to have a blind spot about how much emergency savings we actually need. Most financial experts will tell you to stockpile three to six months of paychecks in an interest-earning account like a money market that you can get your hands on without tax or early-withdrawal penalties. But what many unwittingly discovered after job layoffs in the depth of the recession was that three to six months of paychecks for emergency savings wasn’t nearly enough when unemployment lasted six to 12 months, sometimes even longer. It also matters if you’re single or if you’re part of a two-income household, and if you rent or if you own a condo rather than a house.

Cushioning the blow of surprise expenses.

Gauge your emergency savings needs not just on income — but on what you own and what replacement costs might be. How much would a replacement roof be? What about a new transmission in your car? How about a health emergency? It’s the most feared and pricey crisis Americans face and for good reason, since it’s the #1 cause of bankruptcy.

You should be allocating emergency savings into three tiers: minor emergencies, major emergencies and job-loss protection.

• Minor emergencies

They’re what you’d expect: health-care deductibles and negligible car and home repairs. But be sure you are prepared to cope with multiple minor emergencies around the same time. For example, there could be a domino effect of emergencies, like a car crash could lead to a broken leg and an unexpected car insurance deductible as well as a healthcare deductible.

• Major emergencies

The good news is that major emergencies don’t happen with the same regularity that minor ones do. A key premise here is that the cash you have on hand — a liquid asset, can be used for any major emergency. The caveat for those with health savings or flexible spending accounts is that those accounts can cover health costs but are hands off for other emergencies.

• Job loss

In general, there’s a 10% probability that any one of us could lose their job in any given year, according to the Bureau of Labor Statistics. Those numbers, of course, are skewed during recessions and economic hiccups like we’ve seen in recent years. In these cases, according to the BLS, more than 10% of those who are jobless need more than a year to find employment.

Add that all up and the advice is to save enough to cope with a year of unemployment. That’s a tall order, but remember you don’t have to do it all in one year and it doesn’t necessarily mean a year’s worth of paychecks – but rather a year’s worth of expenses covered. Unemployment insurance is considered too. In two-income families, it’s unlikely that both people will lose their jobs during the same year, but they should be covered as if the higher income gets knocked out of the equation.

Hopefully you will never need to worry about most of the items on this list, but it’s always better to be financially prepared and plan ahead when you can!