Emergency Fund

I’ve never logged, worked in a mine or a pulp mill.  The closest I got was a summer job at the former Raven Lumber.  What these occupations had in common was that they were all subject to market forces, seasonal shutdowns and strikes.
Growing up in the 70’s and 80’s we saw them all.  The times took them for granted, as certainties and planned accordingly.  The workers saved as they went and the unions re-stocked their cupboards with their own war chest.  If a strike dragged on indefinitely workers migrated away or picked up a job doing whatever they could.  Debt usually consisted of only a mortgage with cars, trips and other wants only purchased during the good times.
Are we as well prepared as a logger of the 70’s?  I suspect not and the world we live in demands that we be much better prepared.
So what is an emergency fund and how much should be in it?  Emergency funds are monies to replace an unexpected drop in income so you can continue to buy essentials.  We’ll consider your minimum monthly household expenses, loan payments, medicine and food as essential.  Dining out, entertainment and trips as non-essential.
On amount, I’ve seen a lot of numbers thrown out ranging from 4 months basic expenses to a year.  I’m comfortable with a number in between but the goal should be 4 at minimum and more if you are likely to need it.
Must it be in cash or held in a bank account?  It should.  If 2008 taught us anything it is that the values of most everything else goes down during global financial crises.  Sure, precious metals were up but I would estimate those that had plenty of gold and silver sitting in a deposit box didn’t need it.
Can it be in a RRSP?  Not my first choice.  If so, it must be in cash or a very low risk alternative.
Best bet?  A high interest savings account.  TFSA optional once savings have built.  Preferably set-up with an automatic monthly top-up.  I usually recommend one set-up away from your normal accounts.  Out of sight, out of mind and less likely to dip.
How important is it?  It’s a little like oxygen.  You may go years without ever thinking about it but when  it’s in short supply it’s the most important thing in the world.