Take time to think about what you would do if you needed to find some money in a hurry - to pay an unexpected bill, for example. A bit of planning now could help avoid problems in the future.

It's a good idea to put some money away in an 'emergency fund' if you can afford it.

How much will you need? This depends on your circumstances and the type of emergency you might face. But some advisers suggest that you should try to save enough to cover your outgoings for three months. Using a budget calculator might help you to work out how much you need.

Don't panic if you haven't got that much money right away - build your fund up gradually. Even a little money is better than none at all.

Make sure that you can get your money when you need it - by keeping it in an instant access or easy access savings account, for example. Information comparing the different products on offer is widely available, both on the web - eg the FSA's savings account tables - and elsewhere.

Remember to review your emergency fund from time to time to make sure it still meets your needs, especially if your circumstances change.

And don't be tempted to dip into your fund except in a real emergency.

Even if you have some money put aside, there are other ways of dealing with an emergency.

You could consider borrowing the money - using a bank overdraft or your credit card, for example. But think carefully before you take on any extra borrowing - make sure you know how you will repay the money and think about what might happen if your circumstances take a turn for the worse.

You can also take out insurance to cover you for some emergencies. For example, if you drive a car, you must have insurance. If you own your own home, you should normally have some buildings insurance. And, you might also want to consider taking out some contents insurance to cover your possessions for loss or damage. But be careful not to take out insurance that you don't really need.

This information is provided by the Financial Services Authority, the UK's financial regulator. It does not provide financial or other professional advice.
If you want advice specifically tailored to your personal circumstances you should consult an adviser.

The FSA is completely impartial and does not endorse or recommend any individual financial firm, product or service and take no responsibility for any information or advice provided by any other person or organisation.