An emergency fund is money you've tucked aside for just that—an emergency—such as a protracted, serious illness that keeps you from working, or job loss for some other reason that leaves you with no income. Experts recommend that you set aside three to six months' of living expenses. It can be a long-term project if you're living on a tight budget, but every little bit saved can help. Make it a habit to tuck at least a small portion aside out of every paycheck in a dedicated, interest-bearing account so it will earn you a little money while it's accumulating.