According to Parade Magazine, a recent survey showed that 41% of Americans have no emergency savings. Many experts suggest that you should have enough emergency savings to cover at least three months of living expenses, though many suggest you should cover a longer period of time.

While we think at least three months is a good rule of thumb, the exact number of months or amount to have available in the emergency fund really depends on your own personal situation. If you’re single and have the ability to easily scale back your expenses in tough financial times, then you may not need to stash away as much as someone who is stretched thin and is the only source of income for a family of four. You should also assess the likelihood of losing your job and not being able to find another job quickly (i.e., are you in an industry and at a point in your career where you know you will be in high demand if you leave your current job for whatever reason?).

While we realize its easier said than done to get a fund in place, we think you should make it a top priority if you don’t have one already set up. And with a little planning and goal setting, we think anyone can do it in a short period of time. We put together a few tips and thoughts that can help you get there.

Set goals.
Saving money takes discipline. And just like anything that you’re striving for, its hard to succeed without goals in place. They help you stay focused and serve as a constant reminder of where you want to go.

So we suggest sitting down with a pad of paper and writing down all of your expenses. Create two columns one for what you absolutely must spend money on (food, shelter, transportation, money for emergencies like a visit to the doctor or a car problem, etc.) and one for expenses that you can do without (new clothes, new gadgets, meals out, movie tickets, etc.).

Then figure out how much the must-have column will cost you per month. Run this out the number of months you deem necessary for your emergency fund, and set this as your primary goal. This goal should be set in stone and you should hit this no matter what. There should be no hope involved. It should be a must.

Then figure out how much the nice-to-have column will cost per month, and run this out the necessary number of months and set this as your secondary goal. You should make this be the goal you shoot for. Don’t take it lightly, and try to get there as soon as possible. While we don’t suggest that you dip into your emergency fund when times are tough to buy things like new clothes or a new iPod, we think that this goal well help provide a little cushion for those unexpected expenses when times are tough (and if times aren’t tough, you can use this money to pay off any outstanding debts).

Start saving now.
Don’t tell yourself, Im going to give myself until the end of this week or the end of this month to start saving. This is an EMERGENCY fund. Emergencies are unpredictable. If you don’t have a fund in place, you are already behind and need to catch up fast.

Get creative with how you save.
One way to save is to cut out those nice-to-have expenses. It takes discipline to do this and is not easy, but you have to find a way to do it. While we know the occasional slip-up happens (e.g., friend you haven’t seen in awhile ask you to join them for dinner out at a nice restaurant), give yourself multiple ways to cut down your expenses, save, and ultimately reach your goals.

One clever approach we’ve heard about (and practiced ourselves from time to time) is to pick some form of our currency, whether it be coins, dollar bills, five dollar bills, or whatever, and put it aside any time you have it in your pocket or purse when you get home. For example, when you get home at the end of the day, go through your wallet and pick out all of the one dollar bills you have and put them aside. Do this everyday. We think you’ll be surprised by just how much money you’re able to save up over time. And even better if you can do it with $5s or $10s, though the most important thing is that you’re doing it with something even if its just with coins.

Put your savings into a separate account.
We don’t suggest mixing the money that you’re saving for the emergency fund with money that you use for primary checking or savings. And we don’t think your fund should be stuffed under your mattress either. This fund should be someplace secure and separate from everything else. This will allow you track exactly how much is in there, and you’ll be less tempted to dip into if its not mixed in with your other money.

Set automatic deductions.
Perhaps the best way to ensure discipline is to never see the money and not have to take action every month to put money aside. Make it easier on yourself if you can, and see about having either your bank automatically transfer money each month into your emergency fund account, or better yet, see if you can get part of your paycheck automatically deposited into your emergency fund each month.

Consider short-term CDs.
You want to be able to access your fund whenever necessary, so CDs aren’t a great option if you only have the bare minimum (or less) saved up, as there may be penalties for jumping out early. But if you have a little cushion, put it into a short-term CD if you can get a better rate than in your bank account. And since CDs (like your checking and savings accounts at an FDIC-insured bank) are FDIC-insured up to $100,000, you can sleep well at night knowing your money is safe.

Get out of debt.
If you’re in debt, you’re not only making payments on the principle that you owe, but also interest on that principle. In other words, you’re paying for more than just the purchase price. When times are tough, you don’t want to be using some of your much needed emergency fund to make interest payments, not to mention the principle that you’ll be chipping away at. You’ll feel much better overall knowing you’re out of debt, and it will be one less thing to worry about if you do end up needing to dip into that emergency fund.

Refinance.
If you have debt such as a mortgage and aren’t about to pay off the outstanding balance, consider refinancing. It may not be right for you or the right time to do so, but this could be a good long-term solution to keeping your monthly expenses down. And if you have credit card debt and you’re paying high interest rates, you can get your rate down by negotiating with your current card company or transferring to a card with lower introductory rates. See an earlier post on this subject: A Few Ways to Reduce Your Credit Card Debt

Once out of debt, bill yourself.
If you have loans that you’re still paying off or just recently paid off, don’t stop. Transfer the money that would go into paying off your debt into your emergency fund. After all, you were able to get by without it in the past, so you should still be able to get by without it now and into the future. And even if you have the emergency fund set, consider continuing with this routine to save up money for a wedding, a house, retirement or other big items well down the road.

Get in shape.
Use this time as a way to turn around not just your finances, but your health too. Drink less (or cut out alcohol completely for awhile), quit smoking, eat better, and get some exercise. Doing so will cut down on expenses, as you’ll spend less on drinks and cigarettes, and you’ll probably end up eating more meals at home or packing food for lunch since its often the healthiest option. You’re also likely to substitute some of your more expensive leisure activities with low or no cost workouts. And best of all, you’ll feel better about yourself which will help you stay on track as you work to get the emergency fund in place.

Sell unused items.
Use this focused time to clear out items you don’t need and sell them on eBay or elsewhere. You’ll probably be surprised by both what people will buy and the amount theyll spend for items you no longer want. And make sure you put this money towards the fund.

Unexpected income.
If you get an unexpected bonus at work or a tax refund, put that towards your fund. Don’t even give yourself time to think about how you’re going to spend it. Just make it part of your plan that if you generate unexpected income, you’re putting it aside for the emergency fund.

Remember that you’re putting money aside for when you’ll need it the most, and that you never know when you’ll need it so you need to start saving now. Make sure you have a plan in place and set goals. Be realistic about your will power and ability to stay disciplined, and put in measures to ensure that you don’t go off course while still making sure your money is easily accessible. We hope you never need this fund, and that you can pass it down to your children or grandchildren or your favorite charity someday. And if you happen to need it, your future self will thank todays self for planning ahead.

Photo credit: tanakawho