Managing your money isn't easy, and one of the most challenging parts is noticing blind spots before they become problematic. Nobody has all the answers when it comes to finance, but sometimes even one innocent mistake can lead to a lifetime of problems.

The majority (53%) of Americans are living paycheck to paycheck, a recent survey from Magnify Money found. When you're struggling just to make ends meet, that already puts you at greater risk of experiencing financial hardship -- just one unexpected expense could put you in jeopardy. However, the report also revealed that nearly three-quarters of Americans are perilously close to severe financial challenges.

Man sitting alone at a table in a dark room

Image source: Getty Images

When a single paycheck can make a world of difference

Approximately 70% of Americans say that if they missed even one paycheck they wouldn't be able to pay their bills, according to the Magnify Money survey. Of that group of people, 44% said they wouldn't even be able to afford their housing if they missed a paycheck.

You don't always have control over your job status, however, and unexpected layoffs could blindside you and wreak havoc on your finances. If even one missed paycheck would cause significant problems, could you afford to go without a couple of months' worth of income if you suddenly lost your job? For the majority of Americans, the answer is likely "no."

If you do end up losing your job, it could potentially lead to years of financial struggle. You may be forced to take on more debt just to pay the bills, or you might have to tap your retirement fund (and potentially pay hefty fees for withdrawing that money before retirement).

It could take years to pay off that debt and recoup your retirement savings, and there will still be lingering damage. Especially if you pull money from your retirement account, not only could you face penalties for early withdrawals, but you're also missing out on valuable time to let your money grow. Even if you do eventually pay back what you borrowed or withdrew, you'll still possibly lose out on thousands of dollars in potential investment gains that you could have earned had you left your money untouched.

Although you can't necessarily protect yourself against losing your job, what you can do is build a cushion to protect your finances. With a solid emergency fund in place, you can prepare for the unexpected and avoid serious financial hardship.

A healthy emergency fund can prevent loads of financial frustration

Most people understand that it's important to have some cash socked away for a rainy day, but an emergency fund is more beneficial than you may think. In fact, it can be a lifeline that makes the difference between being able to comfortably pay all your bills and going deep into debt when you're faced with an unexpected cost.

Also, people with an emergency fund are around 2.5 times more likely to feel confident that they can achieve their long-term financial goals, according to a survey from AARP. So not only can an emergency fund protect you financially, it can also make you feel more confident and improve your entire mindset when it comes to managing your money.

As you're building your emergency fund, there are two things to keep in mind: how much you should save, and where you should stash your cash.

Most experts advise saving enough to cover around three to six months' worth of living expenses. That way if you unexpectedly lose your job you'll be able to survive comfortably for a few months without going into debt or tapping your retirement savings.

Next, consider where you want to save. Because you'll want to have access to your cash at a moment's notice, it's best to avoid stashing your money in your retirement fund, a CD, or any other account that imposes a penalty for withdrawing your cash before a certain time. Instead, store your savings in a high-yield savings account. The best savings accounts earn interest rates of close to 2% per year (much higher than the dismal fraction of a percent you'd see with a standard bank savings account), but you can still withdraw your money whenever you need it without facing penalties.

The future can be unpredictable, and you never know when a job loss or unexpected expense will shake up your finances. Although you can't necessarily avoid these situations, you can make them a little easier by creating a healthy emergency fund that will protect you no matter what life throws at you.