One of the most important steps in successfully managing your personal finances is to build an emergency fund. How much? Well a good yardstick to use is the amount of your fixed expenses over a six month period. It is recommended that this is put in a highly liquid, high yielding savings account. I use ING Direct; great online service, great yield. This is money set aside for a rainy day; a time when the unexpected happens and you need some extra cash to get by. This could be an accident, health situation, job loss or something of an "emergency" nature.
Read this article from one of my favorite blogs, The Simple Dollar, on Building a Healthy Emergency Fund.
This is another great link on Building an Emergency Fund from Zen Habits.