How long could you last on a "job furlough?"

A budget dispute has shut down the state government in my home state of New Jersey. About 45,000 state workers have been sent home and face an indefinite time period without paychecks. Which raises an important question about your own personal finances: How long could you go without getting paid?

Financial planners recommend having three to six months of living expenses set aside in a savings account or money market fund. Unfortunately, the emergency savings of many people would only last them three to six days.

Parking a few months of living expenses in a bank or fund account is one of the best and easiest ways to stay out of financial trouble. While few people get furloughed--as New Jersey's state employees have--just about anyone can be laid off, or fired. A sizeable emergency fund at least gives you some time to find out where that new paycheck will be coming from, without racking up the credit cards or hitting up family members for a loan right away.

Here are a few tips about building an emergency fund:

Just start. Does three to six months of expenses seem like an impossible savings goal? It can be, especially if you let that thought prevent you from trying. So start small: commit to putting aside $5 or $10 a week and let it become a habit. Once you see the total start to grow, you'll be more motivated to increase the amount.

Keep it handy... You want to put your savings where you can get it quickly and easily, like a savings account or money market that offers checkwriting. Despite the fact they pay a little interest, certificates of deposit (CDs) are not a good choice because you pay a penalty if you withdraw the funds before the CD's term expires.

...but not too handy. At the same time, weigh whether you are likely to dip into your savings when you overspend, instead of just in emergencies. If you can't avoid the temptation, then go with a money market over a savings account. Having to write a check can be a stronger psychological deterrent than tapping a bank's ATM.

Take your situation into account. Do you really need to save six months of living expenses? It depends on your job stability. M and I have saved about three months, which I'm comfortable with because she had tenure as a schoolteacher (i.e., it was unlikely she'd lose her job) and my employer has resisted layoffs even in industry downturns. Now that we're down to one income, I'd like to increase the amount to six months--but I have to make sure we meet our current monthly expenses first.

Remind yourself: Those savings aren't doing nothing. Once you achieve your emergency savings goal, it might be hard to see all that cash sitting there, especially when you're driving an old car or haven't been on vacation in years. But remember, those funds could give you some much needed peace of mind in a stressful time. Instead of worrying about how to pay the bills, you can focus on sharpening your interviewing skills and landing that next great career opportunity.