Most Americans are still making this basic but critical money mistake. Are you?

More Americans than ever are building their emergency funds, but most aren't stashing enough money in it, according to a new survey by Bankrate. Despite seeing the highest savings numbers in the seven years of tracking, many people in the United States are still falling short.

At least 31% of adults report having six months of expenses saved, up from 28% in 2016 and 22% in 2015. This is actually positive news, given that Americans have been stuck in neutral for years when it came to hitting that 6-months' savings number — which experts recommend as a minimum. "The desire to save never went away, but the ability to take action after the recession was delayed by stagnant incomes and trying to keep up with household expenses," said Greg McBride, Bankrate’s chief financial analyst.

Attitudes toward having an emergency fund have also changed following the recession, McBride added, as people saw firsthand the reality of what happens when you don’t have a financial cushion. Court clerk Anna Newell Jones, for example, was shocked into reality during the Great Recession — when she faced $24,000 in debt, even though she made only $28,000 a year, the Los Angeles Times reported. That situation forced Jones to reassess her lifestyle as she slashed her expenses and started saving. And you can do the same, no matter how small your savings is now: Here's how to build an emergency fund.


Don’t wait until it rains to save

Despite post-recession financial trauma, not everyone is making the necessary lifestyle adjustments to create a cash cushion. At least 24% of Americans have nothing saved, 20% have less than three months stashed away and 17% have between three and five months worth of living expenses saved up.

"It's imperative you save something and live on less than you make," McBride said. "Of course there are instances where saving isn't possible, but usually those situations are temporary, such as if you are on disability, being underemployed or if you experience an income reduction and haven’t adjusted your household expenses to the new lower income."

Indeed, the time to fatten up your emergency fund is precisely when it's sunny, McBride said, because you have a predictable paycheck and can more easily create that rainy day insurance to provide support.

Here's the best way to save money

If you're one of the 24% of Americans with nothing in your emergency fund, don't despair: It's never too late to start saving. The best approach is to have cash automatically transferred from your paycheck to a high-interest online savings or checking account on a regular basis. "Don’t wait until the end of the month to put whatever is left over into savings," McBride said. "Because there won’t be anything left."

Interest-bearing checking or savings accounts are your best bet, McBride remarked: "The money is liquid and federally insured so there’s no risk of loss. The online account is where you earn a competitive return and can maintain the buying power of your money."

Apps like Acorns and Digit can also help you reach your savings goals by sweeping any money left over after you pay your bills into an account of your choice. Another trick to get motivated is to wait and simply bank your raises — and then keep living on your old salary, so you don't get stuck on the "hedonic treadmill" of lifestyle inflation.

Once you've fattened up your emergency savings, go ahead and reward yourself, in moderation, for reaching your goal. Then start thinking long term about how to reach even bigger money goals, like saving up for a car or a dream vacation. For more advice, see Mic's guide on how much money to have saved at every age and the personal numbers you should know to check your financial health.

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