This is a guest post by Anum.  Read more about her after the post.  Write for us.

“How to Save” articles always include the tip “Build an emergency fund,” and for good reason. As its name implies, an emergency fund tides you over during unexpected events – like fires, accidents and sudden deaths in the family.

Essentially, it’s your last line of defense finance-wise, in case you end up in a situation where you have no other sources of cash.

That’s why it’s important you know how to build an emergency fund from the get-go. For that, here are some guidelines you can follow…

1. Write Down Your Emergency Fund Goals

Ask yourself, “How much do I want to save?” Dave Ramsey suggests that you stash at least $1,000 in your account. This may or may not be doable for you.

If it’s not doable, don’t fret. You can aim for a lower amount, like $500 or $300, depending on how much you can afford to set aside every month. What’s important is you’re able to increase your emergency savings, bit by bit, no matter how long it takes.

2. Have a Separate Account for Your Emergency Fund

Keep your emergency fund and your main bank account separate. Otherwise, you’ll accidentally access the former for regular expenses, and end up not leaving any extra cash for the rainy days!

Ideally, your emergency fund should be in a liquid account, like a checking, savings or money market account. This is so you can withdraw money any time, without any penalties. If penalties are enough incentive to not draw from your emergency fund, though, consider putting your extra cash into a time deposit account instead.

3. Search for a Suitable Side Hustle

There’s only so much you can earn from – and so many overtime hours you can work on – your day job before you collapse from exhaustion. If you still have enough energy at the end of the day, you can take one of these work from home jobs, and earn extra money for your emergency fund.

Start searching for these jobs through sites like Odesk, Elance and Guru, or ask your co-workers/acquaintances if they know of any good side hustles. There’s a good chance they do.

4. Keep Your Debt at a Manageable Level

Granted, it’s not always practical to have zero debt. But you can keep your debt at a level where you can still sleep at night, without dreaming about creditors chasing after you for all eternity.

If you use a cash back rewards credit card, find a way to funnel your rebates straight to your emergency fund. Also, use your “magic plastic” only when absolutely necessary. Keep in mind that credit cards have interest, so the longer you put off paying them, the larger your eventual debt will be.  It’s always best to just pay them off monthly.

5. Save Whenever You Can

Saving money is a lot like a game. You need to have a defensive strategy, as well as an offensive one. Your “offense” is earning more money on the side; your “defense”, on the other hand, is saving and freeing up more cash for your emergency fund, like so:

  • Limit your discretionary expenses (e.g. travel, movies, eating in fancy restaurants).
  • Cancel all your unnecessary subscriptions (e.g. magazines, Netflix).
  • Learn how to shop for secondhand items without sacrificing quality.
  • List down your groceries before you head for the supermarket, and stick to your list.
  • You don’t have to be the Krazy Coupon Lady to figure out where to find the best deals. There are so many sites out there that can help you find the deals you need.
  • If possible, sell or recycle your old stuff. (e.g. old phones, laptops).

An emergency fund doesn’t have to be a pain to maintain. When you have a goal, a well-thought out strategy based on the tips above, and the patience not to prematurely withdraw from your fund, you can kiss those rainy days goodbye (or, at least, see less of them).

About the Author:
Anum Yoon is a personal finance blogger and freelance writer. When she isn’t busy typing away on her computer, you can find her roaming around the streets pretending to be a tourist. You can read her latest updates on her blog, or check out her latest stream of thoughts on Twitter.