Upon completion of putting together your household budget and taking a close analysis of your financial situation, build up an emergency fund. Or, as Dave likes to call it, the "rainy day" fund.
A well-funded emergency fund will cover expenses of anywhere between three and six months of living. Depending on how much job security you have or how difficult it would be for you to obtain a new job, you may want to adjust your goal accordingly.
It will definitely take time to fully fund this account, but I recommend you make a goal of saving up $1000 as fast as you can to get the ball rolling. For some, this may be easy as you already have at least that much in the bank. For others, you may have never had that much money to your name - ever. Well, it is possible, and after doing so I trust you will have the motivation and momentum to keep saving more.
Do whatever it takes to save up this money. Get a second job. Sell stuff on eBay or on Craigslist. Shovel sidewalks. Deliver newspapers. Babysit. Clean houses. Anything.
Once you have your $1000, put it in a place that is accessible, but not too tempting to take advantage of.
Now the big question - What counts as an emergency?
Only use your emergency fund for unexpected occurrences that you cannot plan for.
Examples: an unexpected pregnancy, you suddenly lose your job, you blow the engine on your car, an emergency room visit, the furnace breaks down.
Examples of non-emergencies: routine car maintenance (oil change, new tires, new belts, etc.), your TV broke, a 75% off clearance sale at Banana Republic, an annual doctor visit, the need for new furniture, craving a mocha frappuccino, you get the idea...
Once you reach your $1000 goal, you can smile big for a day, but the battle is just beginning. After that, it's time to tackle that debt of yours and continue to fully fund the emergency account. Please feel free to share any ideas you have on how to build up your $1000.