CHICAGO — Having a cash stash by any name — emergency fund, contingency fund, rainy-day fund — may be back in vogue after decades of declining savings.

The continuing challenge: How to manage this set-aside money effectively.

Americans saved more than 10 percent of their income as recently as 1985, as measured by the personal savings rate of the federal Bureau of Economic Analysis. After sliding all the way down to 0.1 percent in January 2008, that rate climbed to 2.8 percent by November.

The modest uptick in savings came in the wake of government rebate checks, but the ongoing financial crisis may block any significant increase for awhile.

Kelly Whalen wasn't anticipating imminent trouble when she and her husband started an emergency fund last spring.

With the economy having since fallen into deep crisis, though, she feels even better about their small head start toward having money to fall back on in the event of job loss or other personal calamity.

Now if only they can keep from having to dip into it for more mundane setbacks like car repairs and higher-than-expected doctor bills. Their fund started with $500 and is currently at $700 after a few withdrawals that threatened to empty it out.

"We keep building up the emergency fund only to have more emergencies!" said Whalen, 32, of Exton, Pa.

Experts' advice that people set aside three to six months' living expenses, or a year's worth if possible, has taken on new urgency in the face of mushrooming job cuts that have pushed the unemployment rate above 7 percent for the first time since 1993.

Here are some important considerations to think about:

SETTING UP A FUND: This should be a risk-free investment, which doesn't mean putting it under a mattress or in a checking account that pays little or no interest. You want to put the money in a place that offers a decent interest rate and where you'll be able to access the money quickly. The most common vehicles are traditional bank savings accounts, online savings accounts, money-market funds and CDs. Which you select is a matter of personal preference.

WHEN TO USE IT: Defining "emergency" will vary from household to household, depending on individual goals and available money. The Whalens use theirs for repairs or unexpected maintenance on their car, home repairs and medical bills that are too big to fit under routine monthly expenses.

WHERE TO FIND THE BEST YIELDS: www.Bankrate.com provides a nationwide listing of the 100 highest-yielding CDs as well as for other investments, based on weekly surveys of more than 4,800 large banks and thrifts and smaller banks that pay to be listed. The site allows you to search for banks and thrifts offering high yields in your area.

HOME EQUITY LINE A FALLBACK: Building a six-month emergency fund may be a near-impossible stretch for many. Taking out a home equity line of credit of $30,000 or more can help fill the gap. Dipping temporarily into the home equity line would enable you to leave other investments with better yields intact.

WHAT TO TAP FIRST: Short-term emergency funds may be parked in more than one place. Say you have a savings account, a money market, a CD and a home equity line; what should you tap first if personal disaster strikes?

Mike O'Neill, a Kansas City-based financial planner with CBIZ who's also a national board member of the Society of Financial Service Professionals, advises starting with the home equity line rather than liquidating CDs prematurely.