Building an Emergency Fund

How to build an emergency fund while still paying down my debt? Big question. I decided to go back to my list of things to do.
1. Stop making more debt
2. Cut my expenses
3. Save up an emergency fund
4. Pay down the debt I have faster
5. Make more money
Even though stop making more debt is #1 on the list, that's going to be hard unless I do #2 and #3 first.
We have a lot of expenses, but at first glance, there seems nowhere to cut. We have pretty large utility bills. Gas, electric, water and trash collection. Our phone bill is tied in with our cable tv and internet. One big expense is the cell phone bill, over $200 a month for 2 phones. It would seem that cable tv could go, but that is pretty much our only entertainment. We really don't go out to movies, and we are getting the bundle price for all 3, and I can't give up the internet. Where to start?
During this hot summer, my son and grandson were here all day, and our electric bill topped $700 for one month because of the air conditioning. I was jumping mad. I spent $50 for a programmable thermostat, and set the temperature at 78 degrees F. May seem mean, but when it's over 100 degrees outside, it felt pretty comfortable. I also went on a kick about turning off lights, tvs and anything else that sucks electricity. The next bill went down to about $280, still a lot, but much better. We have been able to keep it at an average now of about $200 a month, which I figure is about a 10% reduction over all, so $20 for my emergency fund. (ef)
I did pretty much the same type of thing with the other utilities. We water the grass once a week, and have a rain guage on the sprinkler timer which shuts them off when it rains. We have cut our water bill by about 10%. $10 for the ef. We cut our gas bill by using the same thermostat to keep the house at about 68 degrees during the day, and turn it up to 70 degrees at night. Another $20 for the ef. Hey, these are adding up!
I called the cable company and threatened to move my service to satellite tv, their only competitor. It took some doing, but by threatening to cancel, I was directed to the "retention department". They have offers that the regular reps don't. I was able to cut the cable bill by $25 a month.
Then I went to work on the cell phone bill. I had an unlimited plan that cost $100 a month. In the past I needed it, but I don't use the phone as much anymore. Staying with this plan has really cost me, but I liked all the extras like internet, GPS and traffic information. My husband barely used his at all for calls, but he also likes the internet and traffic. There are lots of companies out there, but we are in a contract, which means early termination fee (etf) and some of the cheapest companies like Boost Mobile or Metro PCS require that you buy a new phone. Everything is relative. They are month to month and have no etf. I have called to cancel in the past and have gotten pretty good deals from the retention department, but this time I really needed to reevaluate the plans. We decided to stay with our current carrier, but change to lower minute plans with free cell to cell and free internet and GPS Navigation. We didn't have to extend the contract, so I still have the freedom to shop when the contract is up in March of next year. This saved us $75.00 a month.
So adding up the savings, let's see where I am at.
$20 off the electric bill
$10 off the water bill
$20 off the gas bill
$25 off the cable bill
$75 off the cell phone bill
The grand total is $150 a month. Better than I thought. Of course I would rather spend that money, but I am going to put it to my ef.
What do you think of my ideas? What would you do differently?

Five Steps to Cut Debt

It's common sense that there are three things I need to do to cut my debt.
1. Stop making more debt
2. Pay down the debt I have faster
3. Cut my expenses
4. Make more money
Oops, I guess that's four things I need to do. For the most part, I have stopped making new debt. Except that my car needed serious repairs this month, which went on my Auto Repair Card, becuase I don't have any emergency cash. So, it seems to me that an emergency fund is really important to not making new debt. That is item number five.
5. Save up an emergency fund

What order to do these items in? It's pretty obvious #1 is key, so that is the first item on my list, but without emergency cash it will be hard. Cutting my expenses would be one way to keep more cash, so I am making that #2 on the list. Now my list looks like this
1. Stop making more debt
2. Cut my expenses
3. Save up an emergency fund
4. Pay down the debt I have faster
5. Make more money

The problem for me is that I want to be reducing my debt at the same time that I am saving for the emergency fund. And how much should I have in my emergency fund? At first I thought $1,000 would be enough, and it would be a great start. But with our older cars and our house payment as well as house maintenance, I would feel much more secure with a $2,500 fund. So, that will be my first savings goal. Now, how to do this without putting off my debt pay down for a year or two? I am going to look at our expenses to see where we can cut down. Any money I can cut out of my expenses I am going to (try) to put toward saving.
What do you think? Do you have an ef? Has it helped you stay out of new debt? How much is enough?