It’s not always easy to see teh value in taking half a year’s salary, sticking it in the bank and saying you’re not going to touch it. Try getting laid off. Suddenly your perspective changes a bit.

Best way to start is to get into an automatic investment plan (AIP) with the mutual fund of your choice, ideally something conservative like an index fund. Just tell them to take $x out of our bank account every month, and then promptly forget about it. Before you know it (depending on big $x is) you’ll have yourself a little nest egg.

Once you have some money built up (say, 3 months) switch it over to a money market fund or something that is no risk. I’m sure that the financial planners out there had heart failure when I said to keep your emergency money in mutual funds, but that’s only to build it up a little bit. After all if you’re doing this thing then you don’t have a fund right now anyway, so it’s not like you’re going to lose everything.