The US government is currently on a 33-day shut down all over the country. For an estimated 800,000 federal workers, this will be the second week without their regular paychecks. For the families of some of these workers, it's already hard to get by without one week's paycheck. They are cash strapped for even the basic necessities. Bills are piling up. Paying for their mortgages and putting food on the table has become a challenge. Many of them are now taking on gigs like driving for Uber to cover their expenses. Others are forced to borrow so that they can cover their basic needs, and its only been a week. It is a desperate situation that has made some of these people pawn some of their belongings.

A 2018 Bankrate Survey showed that a quarter of the American population has nothing saved for an emergency. These people would find themselves in a serious financial crisis if similar scenarios were to keep occurring. Keep in mind that the shutdown has only affected the paychecks of federal workers, not every other industry.

Why should you have an Emergency Fund?

Let alone the ongoing government shut down, unexpected personal expenses may arise at any time; your vehicle can break down anytime, funeral expenses may emerge for a relative, or you might fall ill.

In another Bankrate Survey, only 40 % of the American population would be able to pay unprecedented expenses of $1000 from their savings.  Among those with no such savings, more than a third would need to borrow, 14 % would have to cut down their spending on some things, and 10% don’t know what they would do.  What would happen to these people if they actually lost a job?

Right now, it may be just the federal workers, but we have experienced other industries crashing in the past. A decade ago, it was the sub-prime mortgage industry. Before that, there was the Dotcom bubble which led to some serious layoffs and liquidation of companies. Some investors’ portfolios were completely wiped out; it was like an economic plague. By the end of the year, 2002 stocks had lost $5triilion in market capitalization since reaching their last peak.

The shutdown will eventually come to an end and all the paychecks released. However, currently, there is little consolation for those feeling the heat for missing their paychecks while having no savings. There is no single industry that is 100 % immune from hard economic times. For those who have saved a considerable amount of money, the question is, how long would it last you?

So, how much should you save?

Depending on your skills, the industry you work for and the prevailing market conditions, it is recommended that you save an amount that could last you for 3-6 months without a job. If you have a regular income, saving should be on the top of your priority list. You can do this on auto draft. For those who find this difficult, here are some tips;

Target to gradually save $1000. This will come in handy when you face some of the situations that we have mentioned here. Make sure that you put whatever you can aside every month, even if it’s just a few dollars. This way, your emergency fund will progressively grow.

Cut down unnecessary spending and direct that cash towards your emergency fund

Do not wait for tough times to get a side job. Work to find one now and earn some extra income. The extra money will see you through hard times. You can learn an online job or get into landscaping.

Sell the stuff you no longer use and put that money into your emergency fund.

The current government Shutdown is a clear illustration of why it is paramount to put more effort into building an emergency fund. For those not affected, you have probably seen friends struggling or taking odd jobs just to survive until the shutdown ends. Industries will fall and rise, so will the markets. Emergencies will arise, and incomes will fluctuate.  When any of these happens, it won't hurt if you are prepared. If you are lucky to never experience it, you can have peace of mind knowing that you have enough savings just in case the worst happens.