EMERGENCY FUND

Everyone should have an emergency fund. Advisers suggest having enough savings in an easily accessible account to cover your living expenses for three to six months. This financial safety net will give you peace of mind about how you'll meet your most basic financial obligations in the event of illness, job loss, or other serious emergency. The fund can also be used for unplanned expenses such as major house or car repairs, or medical costs not covered by insurance.

Now that you have a budget in place, you can easily calculate how much money you'd need to cover your basic, no-frills living expenses if you had a sudden loss income. Write down your goal for your emergency fund and decide on an amount to contribute to each month, using the "pay yourself first" rule. If you may, keep the fund in a separate account, so you are less tempted to dip into it. Since emergency fund might be needed without notice, they should be kept in liquid accounts  that are easy to cash in quickly.

Decide on a percentage of your income to designate as savings. Planners suggests 10 percent, but if 8 or 5 percent is all you can handle, start with that. Set up a separate savings account.

If you feel forced to dip into your savings in an emergency, consider it a loan. If you can't pay it all back at once, set up a repayment plan and pay yourself as though it were a regular bill. Otherwise, you may never replenish your savings.