Should you lose your job or have a sudden unexpected large expense, prevailing wisdom has always suggested accumulating enough of an emergency savings fund to pay for three to six months of your monthly expenses. The recession, however, has caused many financial advisors to reconsider that estimate. In today’s market, the size of your emergency fund really depends on your circumstances.

Currently, the unemployment rate stands at 8.6% as of April 2009 according to the U.S. Bureau of Labor Statistic. That’s a 25-year high. In just that month, 539,000 jobs were cut from payrolls. While that’s down from the 699,000 jobs that were lost in March, it still indicates a bleak job market for those out of work. The shabby state of the job market affects how much you should save for emergencies because that money is meant to hold you over if you have to find a new job.

If there is a possibility that you will lose your job in the near future, now is the time to build up your savings. If you are laid-off, it may take you more than three or even six months to find a new job. Some advisors are recommending that those who have jobs in industries hit hardest by layoffs and others whose job security is not guaranteed, to save enough to cover up to a year’s worth of monthly expenses.

To determine how much you need to sock away for a rainy day, take a look at your monthly expenses. Calculate all of the expenses you have to pay each month including mortgage/rent, car payments, utilities and loan repayment. Then, determine how many months you think it would take you to find a new job. You should also factor in potential costs for unexpected expenses like health insurance deductibles if you get sick or injured or money for car repairs. The Emergency Savings Calculator from BankingMyWay.com can help you add up all of these figures to calculate how much you need in emergency savings.

Saving up a year’s worth of expenses is almost like saving up one whole year’s worth of take home pay, and that takes time. If you don’t already have an emergency fund or your fund isn’t well funded, time is of the essence.

You may have to make some drastic changes in your life to find the money to contribute to your savings. The Emergency Savings Calculator also helps you plan for how much you need to save each month (factoring in rate of return and taxes) to meet your savings goal and how long it will take.

Let’s look at this example:

Say you have $2,500 a month in monthly expenses, $1000 worth of insurance deductibles and potentially $4,000 in other emergency expenses. If you decide that you want to save up for 6 months of unemployment, your emergency fund would need $20,000. You already have $5,000 in savings, and you could afford to contribute an additional $250 a month. At that rate, it would take you four years and nine months to fully fund your emergency savings. If your job security is tenuous, that may be too long to provide enough protection in the event of a job loss. If you can adjust your finances to double your contribution to $500 a month, it would take you two years and five months to reach your goal. If you could find $1,000 a month it would take one year and three months.

Finding additional money in your budget to fund your emergency savings fund can be challenging, but if you lose your job and can’t find another one, you’ll be thankful for your savings.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.