OTTAWA -- Credit counsellor Pamela George has seen clients get into trouble for want of $500 and been forced to resort to a payday loan to treat a sick pet.

Without even a small emergency fund, George says, an unexpected expense can spur "a dangerous downward spiral."

"Having $500 put aside is better than having none," she said in an interview.

That's why George, with the Credit Counselling Society, says everyone needs an emergency fund for when they hit one of life's speed bumps like the loss of a job, urgent home repairs or other unanticipated expenses.

How much you need depends on your personal situation, but she recommends the equivalent of three to six months of your net income.

"If you have between three to six months income put aside, then you can look for a job without the stress of: 'Oh my gosh, how am I going to pay my bills?"' George said.

For someone earning about $50,000 a year, that means putting aside between $10,000 and $20,000 -- an amount that George admits may be daunting if you're starting from zero.

"Start small," she said, recommending an initial target of $1,000.

"Put aside $50 per paycheque, eventually that adds up to $1,000. When you've met the $1,000, say: 'Now I'm going to aim for $2,000."'

Selling things you don't need online or getting a second job may also be options to jumpstart an emergency fund.

With household debt at a record level compared with income, Canadians are facing challenges putting money aside for an emergency.

A recent survey done for the Bank of Montreal suggested 24 per cent of Canadians have little, if anything, put aside in an emergency fund and roughly 56 per cent have less than $10,000 saved for unexpected expenses.

Medical expenses, job loss, major car repairs and unexpected home repairs were cited as the top emergency concerns by those surveyed.

Increased debt, higher stress when an emergency occurs and feelings of anxiety and lack of financial stability, even when not immediately faced with emergency, were all cited as consequences of not having an emergency fund.

Tony Tintinalli, BMO's regional vice-president for personal banking in downtown Toronto, says your emergency fund needs to be easily accessible.

He suggests cashable guaranteed investment certificates or a high-interest savings account would be good options because of their safety and accessibility.

"This shouldn't be the bulk of your savings. This should be that emergency fund," Tintinalli said.

He cautioned investors who might want to invest their emergency fund in search of a better return than the low interest rates paid by a savings account.

"If it's your emergency fund, how risky do you want to be with it?" Tintinalli said. "Decisions that you've made in your longer term financial goal, you're maybe willing to take a lot more risk because the horizon is a lot longer. In your emergency fund, that may not necessarily be the case."

George also stressed an emergency fund should not be anyone's only savings, but should be in addition to retirement savings as well as other medium and long-term savings for other purposes.

"When life happens, and life will happen and we will have emergencies coming up, it helps us to handle those emergencies by depending on our own money rather than going into debt," George said.