Cars break down, appliances pack up, geysers burst, family members lose their jobs, children have accidents or you suddenly need money to help a relative who is ill. That's life.

Unless you have an emergency fund, these unplanned or "emergency" expenses can derail a household budget.

Financial planners suggest that you should have between three and six months' salary saved in an emergency fund to handle unexpected expenses.

For most people, a savings account with that amount of money lying in it is a huge luxury. But if you had at least one month's worth of take-home pay in a savings account, you would be better off than most to handle an emergency expense.

With our cost of living rising and our ability to save declining, South African consumers are in a more precarious financial position than ever, making it critical for us to plan for emergencies. If we don't, we have no option but to incur debt.

In the event of an emergency, a micro loan (also known as a short-term loan) might seem like the best solution: they are readily available - some providers boast that it takes just minutes for them to process your application online - and they pay out quickly, too.

But these loans are also the most expensive: you can be charged a whopping 5% a month in interest, or 30% over six months. When you take a second micro loan from the same provider in the same calendar year, the interest drops to 3% a month. This might not sound like a lot, but it adds up to an annualised interest rate of 48%, which is an awful lot. The trouble with short-term loans is that they can become like a drug: you start off intending to use it just once and before you know it, you can't live without them.

You should also try to avoid using an unsecured loan, credit card or overdraft facility because they too can become debt traps.

Having cash set aside is the only way to avoid falling into a debt trap in order to cover the costs of an unplanned event.

If you feel like it's impossible to save, consider cutting back on even the smallest of luxuries.

"Rather spend less on eating out and clothing so that you can put money into a fund that can assist you when an emergency arises," advises Elize Botha, the managing director of Old Mutual Unit Trusts.

Susan Steward, the marketing manager of Budget Insurance, says the amount you save towards an emergency fund depends on your personal circumstances.

But you can save a lot of money if you save consistently, little by little, over time. If you save just R250 a month, you will have saved R3000 in a year, which is better than no savings when emergencies happen.

Experts advise that you keep your emergency savings separate from other savings. Botha suggests making use of a money market unit trust, which is safe and offers liquidity, meaning that you have easy access to your money.

This is very important in the event of an emergency and why it's not a good idea to tie up your emergency savings in something like a 30-day notice account.