We're warned constantly of the importance of saving for emergencies, but it seems like a large chunk of people missed the memo -- or rather, read the wrong one. That's because 38% of college-educated adults think an emergency fund of $5,000 or less is sufficient. That's the latest from online lender Laurel Road, which also found that women -- particularly younger ones -- are generally more conservative when it comes to building their safety nets. Specifically, millennial women think people should have an average of $9,727 in an emergency fund, compared to millennial men who think an average of $8,040 works just fine.

But while $9,727 and $8,040 might seem like reasonable targets to aim for, even these are lowball estimates. And the sooner more people get wise about what constitutes a decent emergency fund, the more protected they'll be.

Glass jar loaded with coins, some of which have spilled over

Image source: Getty Images.

How much money do you need for emergencies?

One of the trickiest things about calculating your emergency fund is that there's no single universal number for workers to aim for. That's because the classic formula states that you should have enough cash in the bank to cover three to six months' worth of living expenses, and that means something different from one person to the next. For example, if you currently spend $4,000 a month, then you should aim for a minimum of $12,000 in savings. But if your typical monthly spending equals $6,000, then a $12,000 emergency fund isn't enough.

Furthermore, whether you stick to the three-month end of the aforementioned range versus the six-month end will depend heavily on personal circumstances. If you're single, don't own a home, and have only yourself to worry about, then you might go with the three-month target. But if you're the sole breadwinner in a household with several dependents and own a home, you're better off aiming for six months' worth of savings.

Then there are those who need even more than that six-month target. If your income is variable or unreliable, for example, you may seek to sock away nine months' worth of living expenses, since it's more likely that you'll need to dip into that emergency fund repeatedly.

Most Americans are lacking in savings

Now that you know how much money you should ideally be setting aside for emergencies, here's a piece of harsh news: The majority of working U.S. adults are nowhere close to having three months' worth of living expenses in the bank. A good 57% have less than $1,000 in savings, according to data released by GOBankingRates last year, while 39% have no savings at all. If you're part of either statistic, it means your finances aren't in great shape -- and that you need to make changes immediately.

Building your safety net

Why is an emergency fund so important? It's simple: Without one, you'll be forced into costly credit card debt the moment you lose your job, fall ill, or encounter an unplanned expense that your typical paycheck can't cover.

Imagine you're a homeowner with just $1,000 in the bank, you lose your job, and you don't find another one for six months. In that scenario, you risk not only racking up debt, but quite possibly losing your home. That's why you absolutely must build savings, even if you've never encountered a financial emergency before.

Where to begin? You can start by reviewing your budget and identifying ways to cut costs. For example, you may have no choice but to make your monthly $200 student loan payment, but you do have the choice to cancel your cable plan, buy less non-essential clothing, and stop dining out so frequently. Being more careful about how you spend money will help you establish your emergency fund slowly but surely.

And for the record, slowly is OK. Most folks can't just save up $15,000 or more overnight, which is what many of us need in the bank. But if you keep at it, you'll get there eventually, and that's better than not making an effort at all.

Another option for boosting your savings? Get a side hustle. The beauty of working a second gig is that the income you generate isn't money you were ever counting on to pay the bills, so you can stick it all in your emergency fund with ease.

No matter what steps you take to build savings, don't make the mistake of thinking that a few thousand dollars will suffice in protecting you from financial ruin.

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