Build up your cash reserves
Roy Laux, president of Synergy Financial Services in McKeesport, Pa., says the first step in any financial planning is to establish an emergency fund.
"You should have three to six months' of your normal income in an account that's safe and liquid," Laux says. "You should also have in that account savings for planned expenses. For instance, if you know you need to replace your furnace in a few years, you should be setting aside money for that in your savings account."
Ronya Corey, a financial adviser with Merrill Lynch Wealth Management in Washington, D.C., says that two-income households may be safe enough with three months' of expenses saved, while a single person might need six months' of reserves.
"There's no right or wrong answer about how much cash to have, but you need to be prepared in case your roof needs replacing or if you lose your job," Corey says.