It's important to have goals in life, especially when it comes to your finances. Setting a target for how much you want to have saved for retirement or the amount you want to have stashed away for a down payment on a house, for example, can help motivate you to save more and reach your goals on time.

However, there's one financial goal that most people overlook -- and not achieving it could wreak havoc on your finances.

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The emergency fund is more important than it seems

Only 18% of Americans have enough saved in an emergency fund to cover six months' worth of living expenses, according to a survey from Bankrate. While an emergency fund may seem like a goal that pales in comparison to saving for retirement, paying off debt, or buying a house, it can be one of the most crucial goals to achieve.

When you don't have an emergency fund, you're putting your entire financial situation at risk. That's because if you're hit with an unexpected expense, there's a domino effect of consequences.

For example, say you don't have any emergency savings and you're slammed with an expensive medical bill. To pay for that expense, you decide to charge it to your credit card. But credit cards have notoriously high interest rates, so you end up digging yourself deeper into debt, paying hundreds of dollars in interest alone. And when you're struggling just to pay down debt, you likely don't have much extra cash to put toward your other goals, like saving for retirement. Furthermore, if you incur another unexpected expense while you're trying to pay off the first one, you're in even bigger trouble.

In other words, not having an emergency fund affects your entire financial landscape, from the amount of debt you carry to your ability to save for retirement. And if you do face an unexpected expense that you can't afford to pay for, it may take months or years to recover from it financially -- if you're ever able to fully recover at all. Especially when it comes to long-term goals like saving for retirement, time is your most valuable asset. So if you have to put those goals on hold while you pay off debt from an unexpected expense, you can't get that time back.

How much should you save in an emergency fund?

The oft-cited guideline for how much to save in an emergency fund is enough to cover three to six months' worth of general living expenses. So the exact amount you need to save is dependent on your unique situation.

That said, saving any amount is better than saving nothing. An emergency fund worth only a couple hundred dollars won't protect you against significant unexpected costs, but it can help with more minor expenses. And if you're strapped for cash, any little bit you can save helps limit your risk of going into debt over an unexpected expense.

In addition, the good thing about establishing an emergency fund is that it's a relatively short-term goal. Unlike long-term goals like saving for retirement -- which require you to save consistently for decades -- you may be able to build a healthy emergency fund in a year or two, depending on how much you can afford to save each month. So if you need to make budget cuts to be able to save more in an emergency fund, that might be easier knowing those cuts won't be permanent.

If you're having trouble finding extra cash to put toward your emergency fund, start tracking your expenses to see where all your money is going. There are several apps that can do this for you, even separating your costs into different categories so it's easy to see where you're spending the bulk of your money. From there, you can see if there are any areas you can cut back and reallocate that cash to your emergency savings. Every dollar counts, so even if you don't have much to save, socking away just a little is better than doing nothing.

When you're trying to balance multiple financial responsibilities, establishing an emergency fund may not be high on your priority list. But not having one can potentially result in long-term financial damage. By saving a little bit more now, you can avoid bigger problems down the road and set your finances up for success.