Saving During Tough Times: Five Questions to Ask Yourself

Your Savings: A Three-Tiered Cake

Saving goes far beyond the emergency savings account, which is the money you touch only when you need it.

"You have to think of it as three-tiered layer cake," said Yochim. "The top portion is the smallest one, you can have immediate access to it."

This layer covers essential expenses, fun money and your emergency savings too, which ought to be kept in a separate account.

The middle layer of the cake is looming expenses -- the kind that you see coming later, for example, savings for college, a new car, or home improvement.

The bottom layer represents long-term savings. "That's the stuff you don't want to touch," Yochim said. The largest chunk of this will be your retirement money.

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If you have to dip into your savings, Yochim recommends digging into the first layer, then the second. The last resort should be the third layer.

What If You've Saved Nothing?

If you haven't saved, and a layoff is announced, Yochim suggests pressing for a better severance package, or even borrowing from your child's college fund.

"Junior can get loans but there's no such thing as unemployment scholarship," she said.

If you're worried about getting laid off, your priority should be to build your emergency fund and stay out of credit card debt.

"If it means for next three months you have to save half or three quarters of your paycheck to fund that -- it's a short term sacrifice to avoid a lifetime of debt payments," she said.

Think you have no room in your budget to save? Think again. Here are a few things you may not have considered:

"Start driving like a grandma -- raise your insurance deductibles," Yochim said. "You can save up to 15 percent on your annual percent on premiums."

Next, see if you can negotiate and lower your debt payback terms -- if you can, do it.

Look into loan consolidation and payment deferral. This will free up cash now, although you will be paying more interest in the long term.

Stop socking away for college tuition if college is several years away.

Cut back on your retirement contribution. If you have 401(k) at work try to contribute at least enough to get any company match but if you can't, then put that savings on hiatus while you build your emergency account.

If you have investments that are outside retirement accounts, and they've lost money, consider selling them. But if you made money on it remember that you will have to pay capital gains.

For more of Yochim's advice, visit the Motley Fool Web site.