Setting aside a portion of money can be a great help during the worst time. People don't know what is going to happen in the near future. Any sudden accident may occur and he may require emergency money for treatment.

Employees may lose jobs anytime and they may take time to manage another job or one may dream to start own business. At the beginning of the business, there may be less or no income to maintain the family expenses.

These are a few reasons that explain why we should have an emergency fund. Now the first question is: how much you should have in a rainy day fund?

It is better to save one month's savings for family expenses. Calculate how much you need to maintain your monthly family expenses and then start to set aside a small amount of money for the rainy day fund.

When your one-month emergency fund is saved, then plan for a two-month saving fund. This means altogether three months' family expenses shall be your emergency fund.

It will be safe to save your rainy day fund in a separate bank account so that you can't use it during your usual time.

It is expected that within these three months, you will be able to manage another job or you will be able to generate income from your new business. Moreover, you may use this fund to buy household items such as a television or fridge immediately after they are damaged.

If you have any debt from a bank or relative and require to pay loans in instalments, financial experts suggest maintaining savings that are equal to six-month's expenses. It will help you maintain your family expenses as well as loan repayment.

When it comes to savings, the most common phrase we hear is "How will I set aside money from my monthly income when it is difficult to maintain monthly expenses?"

It is suggested that if you are doing only one job, you can earn extra money by getting involved in additional jobs after your day job.

Nowadays, the most popular word is "passive income". You may earn extra income by using your skills and this income will help you set aside money for the rainy day fund.

If you don't have that opportunity, you may list down all your monthly expenses and follow them in the next few months. Now identify the expenses that are not necessary and try to avoid them with a view to saving money for the emergency fund. This strategy will help set aside money and will give you mental peace during an emergency.

Jasim Uddin Rasel is the author of Smart Money Hacks