We're all told that we're supposed to have emergency savings on hand to allow for the unexpected, from massive home repairs to medical bills to an extended bout of unemployment. But unfortunately, most Americans aren't close to having enough money in the bank to survive a six-month stretch without a job.

Specifically, 55% of Americans don't have the savings needed to cover six months' worth of living expenses, according to a new GOBankingRates study. Not only that, but 38% of U.S. adults claim they have less than $1,000 in the bank, which is clearly problematic. And while 27% of Americans do have $10,000 saved, even that won't cut it in a scenario of being out of work for half a year.

Green piggy bank sitting on top of a calculator


Since no one is immune to layoffs, it's pretty clear that Americans, as a whole, need to do better. And those who don't risk ruining their finances irreparably.

How much money do you need for emergencies?

As a general rule, all working Americans are advised to sock away at least three months' worth of living expenses, and ideally, six months' worth, to pay for unanticipated scenarios such as not having a job. The Bureau of Labor Statistics now reports that the average American household spends $57,311 per year. Based on this data, the typical emergency fund should equal $28,656 to allow for six months of unemployment.

Clearly, however, most workers have nowhere near that target. Even those who've managed to set aside $10,000 don't have enough money to cover three months of living costs for the average household, which is the low end of what we all need for emergency fund purposes.

Of course, if your living expenses run you far more than $57,311 a year, you'll need to adjust your savings target accordingly. If you typically spend $10,000 a month on your home and various expenses, for example, then you'll need $60,000 in the bank for adequate protection in the face of a lost job. But no matter what your personal number entails, you'd be wise to start saving for it as soon as possible -- before the unforeseen becomes a reality.

Building or boosting your emergency fund

If you're glaringly behind on savings, your first step should be to create a budget if you don't already have one in place -- which is the case for most households. List your recurring monthly expenses, factor in one-time bills, like that annual professional license renewal or insurance premium, and compare what you spend to what you earn. If you find that the vast majority of your paycheck is eaten up, you'll need to start cutting corners to open the door to more savings.

Now brace yourself, because deciding which living expenses to slash is the hard part. It's also a necessary step on the road to building your personal safety net. As you examine the various bills you encounter month after month, think about which of those aren't actual necessities, and where you have room to pay less.

For example, you might enjoy eating out three nights a week, but you don't need to spend your money on restaurant food when you can cook the same meals for one-third of the cost. Similarly, while you need someplace to live, it doesn't have to be a 3,000-square-foot home with an expansive yard and pool. You can downsize to a 2,000-square-foot space that'll likely cost you much less in upkeep and property taxes.

Remember, to build savings, you don't necessarily need to eliminate every luxury you're in the habit of paying for -- just some. Imagine you're aiming to have $28,656 socked away, and you're $12,000 shy. If you cancel your cable plan, curb all non-essential clothing purchases, skip your yearly vacation, and stop eating out, you might manage to save $1,000 per month, thereby getting to your goal in a year's time. Or you might choose to keep spending on all of those things, but rent a much cheaper apartment that frees up the same amount of cash. The choice is yours, but the key is to do something to make progress toward your savings goals.

Another option? Get a side hustle, which will allow you to bring in extra money on top of your regular salary. If your second gig generates enough cash, you might reach your savings target quickly, without slashing your living costs at all. Or you might use both strategies simultaneously.

No matter what steps you take to build or boost your emergency savings, don't make the mistake of thinking that an extended period of unemployment is the sort of scenario you'll never face. Even the most talented folks out there can wind up out of work for six months or longer, and the only way to protect yourself financially is to have enough money in the bank.