From a purely financial point of view the most beneficial thing to do is reduce your mortgage. However, if you do not have a rainy day fund, I would personally take care of that.
Best way to work it out, is to add up all your living expenses: ((mortgage + food + ESB, GAS/Oil, Phone + Insurances + petrol + loans) - (dole + social welfare entitlements)) * number of months
I did not include money for alcohol, going out, holidays, savings, and other luxury items and I recalculate this every year to make sure my numbers still add up.
Over the past 10 years I have managed to build up this rainy day fund to 12 months for me and my wife. And I tell you something, in the current economic mess it is very reassuring to know that we can maintain my lifestyle if we found ourselves out of work for a longer period of time.