Many first-time home buyers use most, if not close to all, their savings for the down payment on the home they purchase. If there is a little cash left, it likely goes quickly on improvements and repairs; however, it is very important to build an emergency fund.
Building a cash reserve for the unexpected, but inevitable, emergencies that arise in life is a wise financial decision. Healthy people get sick. Good employees get fired or laid off. Furnaces, roofs and plumbing need replacing at the worst possible times.
The old rule of thumb was to save enough in an emergency fund to be able to live for six months in case of a job loss, but everyone's situation is different, and six months cash on the sidelines may not be enough.
Kiplinger's Personal Finance recently published an article titled, "How Much Cash You Really Need." Figuring out what you need saved also requires that you make a budget, which also is a good idea. Most importantly, you should get started building that emergency fund. Some emergency cash is better than none.