Baby Step 3

3-6 month emergency fund Once you have a $1000 emergency fund, you are debt free, next you should save 3-6 months of expenses for a fully funded emergency fund. Total all your utilities, food, gas, other expenses and save that much in an interest bearing account. If you are out of work for any length of time, this will keep it from being an emergency and keep you from living off of debt until you get to go back to work.