After any financial blunder: Build an emergency fund

Besides building your rainy day fund, it's also wise to start accumulating a larger emergency fund. This separate savings account should be between $3,000 and $10,000 in size — or even bigger.

Unlike a rainy day fund, which helps you recover from a one-time setback, the purpose of an emergency fund is to tide you over during a long-term personal or financial crisis, such as when you get a pink slip or go through a divorce.

An emergency fund can also be your saving grace after any kind of major financial blunder — a business deal gone bad, a large loan to a family member that wasn't repaid or even a costly financial scam. The emergency fund should have enough money in it to sustain you for three to six months. Because this fund should be sufficient to cover all your bills during that time period, it obviously takes time to build such assets.

So for this year, why not set a goal of building up an emergency fund by saving either a percentage of your paycheck or a base amount of any income you're getting, such as a pension or Social Security check?

By committing to building an emergency fund and making savings a priority, you put yourself back on the road to financial health. You'll also be safeguarding your future well-being in case you find yourself in need of cash to cover another unplanned setback in your life.

Ultimately, it's important to know that any financial setbacks you've experienced in the past can be overcome. And it doesn't have to take forever to get back on track.

Lynnette Khalfani-Cox, The Money Coach(R), is a personal finance expert, television and radio personality, and regular contributor to AARP. You can follow her on Twitter and on Facebook.

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