The World Health Organization officially declared COVID-19 a global pandemic this week, leading to school closures, travel restrictions, and dozens of other measures in an attempt to keep people safe.

As more Americans are forced to confine themselves to their homes, it's been especially burdensome for part-time, contract, and hourly employees, who often don't have paid sick leave. Losing a couple of weeks' worth of income can be devastating, especially if you don't have any emergency savings to fall back on.

Some companies have adjusted their sick-leave policies to make it easier for workers to take time off, but many employees are on their own financially if they're forced to stay home. Even if your employer does offer paid sick leave, it's still a good idea to make sure you have a strong emergency fund in case you're stuck at home longer than you'd planned.

Stethoscope on hundred dollar bills

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How to build a healthy emergency fund quickly

Typically, establishing a robust stash of emergency savings takes months, or even years. Most experts recommend saving enough to cover three to six months' worth of living expenses, which can amount to thousands of dollars.

However, right now your goal should simply be to squirrel away as much as possible as quickly as you can. Aim to save at least enough to cover a couple weeks' worth of income, but if you can swing it, it doesn't hurt to save more just in case.

First, take a close look at your budget and eliminate any unnecessary costs. If you're stuck at home, you may be able to reduce some of your costs easily (since you likely won't be going out to eat or heading to the nearest concert anytime soon). If you must spend money, try using a rewards credit card or cash-back app and reallocate those savings to your emergency fund. Take advantage of coupons, and try to avoid buying anything that's not truly essential (at least for right now). Even if you can only save a few dollars a day, that money adds up. 

Another good bet might be to try to sell a few of your belongings for some extra cash. You may also be able to find some part-time work to boost your income -- but if you're worried about getting sick, refine your search to online jobs you can perform from home. Be sure to double-check that these opportunities are legitimate before you sign on, though, because the last thing you want is to get scammed when you're hard up for cash.

Finally, it's equally important to make sure you're parking your savings in the right spot. Stash your cash in a high-yield savings account. These accounts offer significantly higher interest rates than your standard bank savings account, but you can rest assured your money is protected and you can access it at a moment's notice.

When is it time to tap your retirement fund?

If you're desperate for cash, it may be tempting to raid your retirement savings. However, this option is far from ideal. When you pull money from your 401(k) or traditional IRA before age 59-1/2, you'll typically face income taxes and a 10% penalty on the amount you withdraw. For that reason, it's safer to avoid taking money from your retirement fund in most cases.

In certain situations, though, tapping your retirement savings may be your best option. If your emergency savings run dry and you have no source of income, your only options may be to raid your retirement savings, take on an expensive short-term loan, or rack up credit card debt. Depending on how much money you need and what your financial situation looks like, taking on debt may be wiser than raiding your retirement savings. But if you've maxed out your credit cards or don't qualify for a loan, you may have no choice but to tap your retirement fund. 

If you've decided to dip into your retirement savings, consider whether you want to withdraw the money or borrow it. Many 401(k) plans allow you to take out a 401(k) loan, in which case you can avoid the 10% penalty and income tax you'd incur if you were to withdraw your cash. However, you're only allowed to borrow up to 50% of the amount you have invested, or up to $50,000 (whichever amount is lower). You also typically have to pay back the money within five years, and if you lose your job before the loan is paid back, you're considered in default and must pay back the full amount immediately.

Again, tapping your retirement fund should be a last resort, something you only do if you desperately need cash and taking on debt isn't an option. But if you choose to go this route, make sure you're being strategic, and only take out the bare minimum you need to make ends meet.

If you're strapped for cash, taking a mandatory break from work can be challenging. The best thing you can do to prepare for this risk is to plan ahead and set aside as much as you can in an emergency fund, but it's also a good idea to have a back-up plan in place too. You may not be able to predict exactly what the future will look like, but the more prepared you are financially, the more bearable this obstacle will be.