This article was contributed by Bobby Hewitt, finance consultant to small businesses and writer for Moneycrashers.com.

Sticking to a budget can be hard for many families, especially if they live paycheck to paycheck.

Once a surprise expense — such as a medical bill or pricey home repair — arises, all your financial progress can be derailed in minutes. It can leave you financially strapped and emotionally frustrated.

Emergency expenses are one of the reasons people report they can’t live on a budget. Why bother, they think, when all that work gets ruined by an auto repair or a medical bill?¹

The key is to prepare for sudden expenses so they don’t catch you by surprise. That’s why most people who give advice about financial emergencies say you should build an emergency fund of three to six months of living expenses.²

After all, being prepared is key to preventing a personal financial crisis as a result of an emergency. Here is a step-by-step plan on how to get there.

The 4 Stages of Financial Emergency Preparedness

1. In Debt: Not at All Prepared

This financial stage is all too common for many families. When you’re in debt, you have no meaningful savings and a high degree of credit card debt. With little emergency money available, something as simple as a car repair or emergency room copay could set you back months.

Being in debt is stressful and calls for an urgent effort to get out of debt as quickly as possible. It provides no support for either short-term expenses or major economic emergencies.

How to Get Out of Debt:

• Pay down high-interest credit card debt — each payment frees up monthly income for other uses
• Institute stringent savings measures, such as not eating out or canceling your cable bill
• Call vendors and lenders to negotiate a temporary reduction in your monthly expenses so you can focus your financial efforts
• Generate a one-time cash influx by holding a garage sale, doing some temp work, selling a collection that no longer gives you joy, or other ways that will help improve your financial position quickly
• Make a major change to permanently improve your financial situation, such as finding less expensive housing, obtaining a higher-paying job, starting a side hustle, or changing your child care

At this stage, the most important thing is digging yourself out of debt as soon as possible. Get creative and make it a focus-driven mission to move forward so that you’ll be prepared for anything life throws at you.

2. In the Hundreds: A Little Prepared

Financial guru Dave Ramsey recommends families have a minimum of $500 in their emergency fund, even if they need to take drastic measures to make it happen.² If your emergency fund is in the hundreds of dollars, you can breathe a little easier than someone in the previous stage.

But, that doesn’t mean you’re in the clear. A minor car repair or broken home window may not trip you up at this stage, but major medical bills or a new furnace could deplete your account in minutes. A long-term economic downturn or medical issue will last well beyond the last dollar in your fund.

The following methods can help you improve your financial situation so you can move to the next stage.

What to Do Next:

• Split excess money between paying down high-interest debt and adding to your emergency savings account
• Cancel any insurance you have other than auto, home, and life—that includes service plans on your appliances and extended warranties
• Budget “fun money” into your cash flow to avoid splurges that dip into your burgeoning emergency fund
• Pay yourself first by making a deposit to your savings every payday
• Consider a debt consolidation loan or personal/home equity loan to restructure your finances for more savings, if your credit permits

The biggest challenge at this level is protecting your emergency fund, but stay steady on the course. Discipline and sacrifice now will help improve your situation later on.

Be sure to use the money in your emergency fund only for true emergencies and prioritize refilling it after you dip into it so you can reach the next level in financial preparedness.

3. In the Thousands: Somewhat Prepared

Once your emergency fund hits the four-digit mark, it’s cause for celebration. At $1,000 to $3,000, you can handle a medium-level car repair or medical copay out of pocket and handle a week or more out of work.

But, you’re not finished yet. It’s still a dangerously small fall-back fund in a long-term catastrophe, and a really bad month with three or four problems can take you right back to zero.

If your household expenses are $4,000 a month, and it took you six months to gather half that much, saving the recommended $12,000 to $24,000 can look like an impossibly daunting task. But, don’t give up now. Here are a few steps to keep the momentum going.

Steps to Take:

• Pay off any remaining consumer debt in full
• Once the debt is paid off, take half of what you had been paying towards debt and put it directly into your emergency fund. Take the other half and spend it on something fun to keep yourself motivated. Apply the same rule to any financial windfalls, like a bonus at work or tax refund.
• Prepare a separate budget to plan for upcoming big expenses, like a vacation fund or new car fund, so you don’t go back into debt for those expenses.
• Consider other investments.

At this stage, don’t fall into the mistaken belief that a $50 or even $20 contribution to your emergency fund is meaningless. Although it feels like a lot less progress than it did when you only had $100 saved, it still brings you closer to your goal. Keep at it and you’ll be headed to a full emergency fund in no time.

4. Full Tank: Prepared

Congratulations! You did it! With half a year of expenses in the bank, you’re prepared for all but the most catastrophic of emergencies. That doesn’t mean you can let up on your financial vigilance, but it does mean you can breathe easier. You can start putting the cash flow you’d aimed at your emergency fund toward retirement, vacations, and other goals.

Don’t stop contributing to your emergency fund altogether, though. As recent months have taught us, some financial emergencies can last a long time. The more you have saved up, the better you can handle them.

Final Thought: Surprises That Aren’t Really Surprises

Financial emergencies you’ve budgeted for don’t have to be costly surprises. They’re just inconvenient. So, the fewer surprises in your financial life, the better.

One way to avoid unexpected expenses is to go over your bank and credit card statements for the past year and compare them to your current budget. Many families find that certain “surprise” expenses can be predicted to some degree. For example, maybe your car needs $200 in repairs every few months. Or you’ve been setting aside $100 a month to help your college-age kid buy groceries, but she reliably calls near the end of the month for another $50.

Identifying somewhat regular expenses you didn’t plan for can turn surprises into anticipated, budgeted-for events. And once they’re budgeted, you avoid having to dip into your emergency fund altogether.

Bobby Hewitt is a contributing writer for Moneycrashers.com and is a finance consultant to small businesses. He’s constantly reviewing and tweaking his personal finances.