Many Americans today don't have a savings account or emergency fund. I heard on the news recently that the Commerce Department reported that Americans spend all the money they have and personal savings rates have reached the lowest level since the Great Depression.

Your emergency fund is your safety net: in case you get sick or lose your job you can use your emergency savings to hold you for a few months until you can find a new job.

Your emergency account should be separate from your checking or savings accounts and should only be used for emergencies such as an unexpected expense, unemployment, medical bills, etc.

An emergency fund should be enough savings to pay your bills for at least 3 to 6 months. Money for an emergency fund should be readily accessible and stored in a checking or savings account, preferably a high-interest savings account, such as Emigrant Direct or ING or a money market account where you can make money while saving money.

To determine how much money is needed to pay 3 to 6 month's worth of your bills do an inventory and write down all your bills and expenses and the monthly amount spent for each. Calculate the total. Use this amount and multiple by 3 or 6 to determine the total amount you need to save in your emergency fund.

Make sure you do some comparison shopping before opening an account for your emergency fund to ensure that there are no minimum or other fees for accessing your account. A good source to use is http://www.bankrate.com.

You can start off by contributing small amounts to your emergency fund until you are able to contribute more. Start off with a contribution of at least a month to your emergency fund. Once you are able to contribute more to the fund do so. Make several short-term goals for your emergency fund. Once you have saved enough money to pay one bill, pat yourself on the back. Then keep saving until you have enough to pay three bills and so on, until you have enough saved to pay your bills and expenses for 3 to 6 months.

Once you have reached your emergency fund goal, it is time to start developing some long-term goals such as an additional savings account and to start planning for retirement. A great site to learn about retirement planning is http://www.morningstar.com and look under the Personal Finance section.

Having an emergency fund will ensure that you are on the road to becoming financially secure and will prevent you from going into debt when an unexpected tragedy happens or unexpected expenses arises. An emergency fund is the first step to getting out of and staying out of debt.