We’ve written several times about the basic steps to take before even thinking about investing money for retirement or college for your children. Having basic insurance coverage on your auto, home and life, plus an adequate emergency fund are critical.

We were shocked by a statistic published in a recent Journal of Financial Planning (October, 2010). Forty-five percent of Americans believe that they could meet their financial obligations for less than a month if they lost their job.

A basic rule of thumb for most financial planners is that you should set aside in cash or cash equivalents at least three to six months of your fixed and variable expenses. In many cases we now lean toward having six months to a year’s worth of funds set aside.

The last two years have been tough for everyone, and for many just having enough to meet everyday needs is difficult. Nevertheless, you can be sure another tough recession lies ahead, and probably sooner than we might expect. Now is the time to do all you can to establish a rainy day fund for the next economic crisis.