Let us expound on the topic. Given the recession, you should have at least six months to a year’s worth of living expenses as emergency fund.

First of all, let’s be clear on what things do you actually need an emergency fund for.

What are emergencies anyway? Your mother-in-law’s birthday is not an emergency. Your anniversary isn’t an emergency. These are events that happen yearly so there’s no reason to consider them emergencies.

A blown water pump in your car is an emergency. Hospital bills from your kid’s broken foot from a skateboarding accident is an emergency. Getting laid off is an emergency.

So in such unfortunate instances, you’d only be thankful that you have your emergency stash to tap into. But what do you do after? Once your affairs are in order again, well, you should replenish the fund, of course.

It might take a few sacrifices again such as deferring buying that new widescreen TV but it’s always important to keep your emergency fund topped up.

Rainy days come fast and plenty these days so why leave a nasty gash on your umbrella?

Reduce spending. Re-work your budget and make sure you reduce the amount of your paycheck on spending and allocate more money on saving. Stop living beyond your means and start living frugally.

Use cash. Although credit cards are good for some purchases, but if they have become disadvantages more than advantages, it’s time to part ways with it. Leave one for emergencies. Use cash instead and if you have to make a purchase that you can’t pay in cash, then it would be better to postpone the buying. Develop some will power.

Keep a log of your spending. Write down your expenses and observe where you can cut unnecessary expenses. Some people don’t realize how much they’re spending on needless items until they see them in writing.

The first thing you need to remember is not to do anything at first. Put this money away in a separate account while you get more information on which investments you will be making. You may add more to this along the way and let the money earn interest. What you are not supposed to do is to take money out of this account.

Research the right investments. How do you do this? First find out what your financial goals are. Find out your interests. Do some researches both online and through financial magazines. If you have the resources, you can also ask experts for advice. The thing is you’d have to take a personal interest in your investments and learn as much as you can about them. Do not leave them in the hands of other people.

Are you paying bills all over the place? Why don’t you consolidate all of your bills under the same provider? For example, have your Internet, phone, and cable service accounts moved to one company. Research which company offers the best service bundle. This could save you money every month.

Check your utility accounts again. Are there services there from which you can cut back? For example, do you need call waiting and caller ID services for your phone? These extras cost extra too. Find out which ones you can live without and have them removed.

There is nothing wrong is clipping coupons. It’s practical! It might a little getting used to it and it does take a bit of strategy when it comes to using coupons on the right items, but in time, you’ll be able to save from 15% to 50% of your grocery money.

Review your policies. It is good to have insurance but if you can shave a bit off your premium then it could help with the expenses. Talk to your insurance provider and ask for discounts that you might be missing out on.

Pay your bills on time and you’ll be able to say farewell to late fees and rate hikes.