The Importance of an Emergency Fund

I ran across an article in the New York Times today and it just happened to be about our little suburb in Central Ohio.  It featured several families who all live in the same neighborhood and how they have lost incomes of $120,000-$150,000 in the recession.  As I read it, I was reminded of the importance of an emergency fund.

On any given Sunday morning you'll find a Suze Orman show on my DVR.  I respect her for many reasons but primarily because she is an advocate of an eight month emergency fund.  In this market it is taking 8 months or longer to find a job.  If each family had eight months of income to fall back on, a job loss would be more of an inconvenience than a travesty. 

Some of you are saying, "There's no way we could save that much money,"  Well, I'd counter that with, If my family has been able to save for it, I'm pretty sure most families could.  Think through what could be cut from your budget such as cable, cell phones, 2nd cars, Netflix, Starbucks and vacations.

Yes, extreme measures may need to be taken but for the peace of mind it's worth it.

Tell us!  What grade would you give yourself financially? Do you have an 8 month emergency fund?  If not, how are you saving for one?