With cold weather on the way, are you prepared to cover the cost of a broken water heater or furnace? Those are just two of numerous sudden expenses Americans are faced with every day.

Don't let unexpected life events, such as job loss or an accident, cripple you financially. Have a short-term emergency stash ready to help you when you need it most.

Financial-education company The Motley Fool suggests that it's easy to set up an emergency fund in just a few simple steps. Here's how:

Determine how much you need to save by assessing how much you spend each month on necessities. Consider food, shelter and transportation expenses, and then add a bit more to cover unforeseen expenses. Multiply that number by three or six, depending on how many months you want to cover. Set aside enough each month to meet this goal. Make sure it fits your budget — and treat it as a must-pay expense, such as the heating bill or rent.

Choose the right account in which to save your money. You want to be able to access the cash quickly, so select a safe investment such as a high-yield savings account, money-market account or money-market mutual fund. Shop around to find the best rate. Here's what you should know when comparing: the interest rates available, comparable yields over identical time periods, cost of purchasing/maintaining the investment and the minimum investment required. Set up an automatic transfer program if you think it's going to be difficult to save.

Talk to your employer as well. You might be able to split your direct deposit paycheck between your regular account and your short-term savings account.

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