[Aggie93]

It is usually recommended to have six months of expenses in an emergency fund.

Next would be to payoff the highest interest rate loans first. Your mortgage is higher than the truck loan and carries the PMI payment as well. I would suggest paying this off first.

The idea of selling the truck and buying a cheaper truck sounds good, but it would depend on how much you are really ahead after paying the loan and buying the other vehicle.

Without knowing your personal situation, are there other situations that could cause you to need liquidity. Some questions to consider:

What is your health care insurance?
Credit card balance, can always tap those in a real emergency.

There are probably some others, but that will give you an idea of how important it is to have an emergency fund. Maybe a middle of the road approach would be to keep 2 months in savings (gives you 6 months if you lose your job). I'm not sure about selling the truck, it might not give you as much of an advantage. If the math works out that it does, then that is a good idea.

Good luck.