emergency fund

It's always a good idea to be prepared for financial emergencies so LearnVest has 7 reasons to have extra cash saved up.

Saving up your hard-earned cash to stash away an emergency fund?

Well, it can be a hard sell. Spare cash can be hard to come by, and, after all, taking a vacation is a heck of a lot more fun.

Or at least a lot of us seem to think so. According to a nationwide survey conducted by LearnVest and Chase Blueprint, less than half of respondents are currently building an emergency fund. (Those who are have currently saved up about $15,000, and we applaud them.)

RELATED: So What Really Counts as a Financial 'Emergency'?

The idea behind an emergency fund is to store at least six months of net income for the sake of “just in case.” Just in case your job goes “poof.” Just in case your car conks out. And a select few other things we’ll explain below.

Read on for more.

An emergency fund will go a long way in this struggling economy and uncertain job market. It's vital to have, at the very minimum, $1,000 lying around for you to use in case of emergency. Most money experts recommend saving up to three to six months of living expenses, but since we're still recovering from the global recession (which may happen again), it's now advisable to have a bigger financial blanket — up to a year's worth of living costs. After all, unemployment can hit you when you least expect it.

If you don't have an emergency fund and need to earn cash quickly when something goes wrong, here are some fast ways to get the money you need:

• Sell your stuff. Clean up your place and sort through your items to see what you can sell on Craigslist. Perhaps it's clothes, gadgets, or books. Maybe you even have jewelry to pawn. You might even have unused gift cards that you can sell on Gift Card Granny or daily deal vouchers to sell on CoupRecoup.
  
• Ask friends for leftovers. Ask around to see if your friends have any old items they would like to donate to you. Give them a list of the type of items you're looking for and see if they're comfortable with you selling the items.
• Return your purchases. Take back any recent purchases you have made on nonessential items and put the cash in your savings.
• Be a guinea pig. Participate in clinical trials or research studies at hospitals, research centers, or schools. Find a study that works with your schedule, and remember to read the fine print and educate yourself on the risks.
• Take more from your paycheck. Make your budget tighter this month and set aside more money for whatever emergency you need pay for.
• Fiverr.com. Pick from various tasks on Fiverr.com or brainstorm some and post your offers on the site. Each completed task will gain you $5. I know it might be a small amount, but it's a start!

For more ways to earn cash quickly, read on.

Build up your emergency fund with these tips from Kiplinger.

You know you need an emergency fund — easily accessible cash to pay for unexpected expenses. Without one, you could find yourself looking around the house for valuables to pawn, racking up credit-card debt or maybe even considering a payday loan to cover the costs of an emergency.

But you may be wondering how you can find enough spare cash in your budget to set aside for a rainy day. If you’re living paycheck to paycheck, I’m sure the thought of saving up enough money to cover six months’ worth of expenses (as is usually recommended) is especially daunting. The good news is that you don’t have to stash that much cash at once.

The key is to start setting aside a little each month to build your emergency fund. And that doesn’t require a big salary. After all, saving is a function of discipline, not income.

Here are seven ways to find enough money — and motivation — to create an emergency fund.

Save — don’t spend — your tax refund. About 75% of taxpayers received a refund last year, and the average amount was $2,913. A refund of that size can get your emergency fund off to a great start. Open an interest-bearing savings account and have the money directly deposited into it so you won’t be tempted to use it.

Pay yourself first. Rather than wait until next year for another refund to stash in your emergency fund, adjust your tax withholding by filing a revised W-4 form with your employer (see How to Adjust Your Withholding). This will put more money in your paycheck each month, and you can set that amount aside in your savings account so it can earn interest and grow. (That money won’t be earning any interest during the year if you leave it with Uncle Sam.) If possible, have your employer deposit the designated amount directly into your savings account so you don’t see the money in your checking account and aren’t tempted to spend it.

Read on for more.

We're thrilled to present this smart Business Insider story here on Savvy!

In the world of personal finance, where does an "emergency fund" come in, and why save for emergencies at all?

Because life happens, and you never know when you'll have to pay for it. This year alone, I've spent nearly $1,000 taking my cat, Ringo, to the veterinarian.

RELATED: Tips For Reducing Your Vet Bill

An emergency fund is sort of like the jet fuel on your flight to financial freedom. Rather than putting a hefty charge on plastic, you can pay it off right then and there.

Of course, one of the most important aspects of saving your emergency fund is knowing where to stash it. To help you determine which savings vehicle is right for you, we've rounded of the best and worst places to hide your cash.

Under the mattress

PROS: One of the perks of stashing your dough under covers is not having to pay taxes on it, says Casey Weade, a certified financial planner and vice president of Howard Bailey Financial.

CONS: The downside is you won't earn any interest on your savings, and exposing that bundle to inflation could ravage its value over time. So much for an early retirement.

Checking account

PROS: A checking account is easy to access—just swipe your debit card or hit up your bank's ATM.

CONS: Like hiding money under your mattress, most checking accounts don't accrue any interest and the all-too-easy access makes it easy to splurge your safety net.

Money market accounts

PROS: Unlike individual stocks, which carry more risk, a money market account is hard to lose, says Weade. Plus, they carry higher interest rates than your everyday bank account.

CONS: The liquidity, or ease of access, to money market accounts makes them suitable for short-term savings—think one to three years—over long-term ones. For emergencies, you'll need to plan wisely.

For more places to hide your emergency cash.

We're thrilled to present this smart LearnVest story here on Savvy!

Rainy days are inevitable. Lately, they seem to stretch into rainy weeks and months. To guard against these unexpected tough times — emergencies — an easily accessible stash of cash is a must!

Build It Up

Experts recommend that you have at the minimum 6-9 months of your living expenses in a savings account for potential rough times.

If you don’t currently have enough to cover your living expenses for eight months, start by trimming the fat. Do it by calculating your budget.

After you’ve separated the need-to-haves from the nice-to-haves, set aside an amount every month from the nice-to-have pile to go into your emergency fund. Even $10 makes a difference!

Automate Yourself

Once you’ve figured out your amount to set aside, take temptation out of the process. Go online and set up automatic transfers to deposit your chosen amount directly from your checking account to your emergency savings every month. Alternatively, get your employer to divert some money from your direct deposit paycheck straight into your emergency fund.

Read on for more about emergency funds.

This anonymous poster in our Savvy Confessions group wants help on building an emergency fund. Chime in with your thoughts below.

I just graduated college and have started at my first job. I am really lucky and I love the job. I make decent money and wanted to start some budgeting before I start blowing every paycheck like I see all of my friends are doing. I am torn between paying more toward my student loan and small car payment or build an emergency fund. With the economy in the state it is in I want to try to prepare for anything. I don't want to rely on my parents since I am out on my own. So how should I start to save a little each month and pay a little more on my loan and car? Or pay the minimum on each and save up an emergency fund faster? And any tips about where I should keep the money for an emergency fund, I know myself and I might be tempted to spend it if it is just in my checking.

Share your own career- and finance-related questions anonymously in the Savvy Confessions group for a chance to be featured on SavvySugar and advised by fellow Savvy readers.

The concept of spending less than we earn seems simple enough, yet many of us struggle to put the idea into practice. Living within your means is a great start to financial stability, but living below your means is a way to ensure that this path isn't disrupted.

Step one is eliminating a reliance on credit cards for anything but emergencies. Step two is creating an emergency fund so that you don't have to pay interest when an unexpected expense arises. This year, I suggest resolving to live below your means so that you have money left over for a substantial emergency fund.

Create small goals for yourself so the overall idea doesn't seem overwhelming. For example, instead of setting a goal to save $3,000 in 2009, aim to save $500 by March and so on. You're more likely to achieve your goal when the end doesn't seem so far away.