February is known as Heart Month and has become a time for us to assess our health. As women, we sometimes delay our own needs to instead care for others, such as our children, spouses, aging parents, and employees. However, it is crucial that we also take time to care for ourselves, not only to tend to our health but to tend to our finances, as well.

Too few Americans are prepared financially for an emergency.  A survey by the Federal Reserve found that more than 25 percent of Americans have skipped necessary healthcare because of the cost.[1]  And another recent survey by Bankrate found that only 39 percent of Americans could cover an emergency of $1,000 out of their savings.[2]  With these alarming statistics, you should be prepared for any unexpected situation.

An emergency can constitute any situation that catches you by surprise and for which you are financially unprepared. Cars break down, homes get leaks, and sometimes the tax bill is bigger than you anticipated. Having an emergency fund may help you financially withstand bad news without racking up debt.

Create your emergency fund now

Do not put off something today, that you should have done yesterday. Start saving for an emergency fund today. A general rule of thumb is to save three to six months’ worth of expenses.[3] That number can shift depending on your specific circumstances. If you have children or are helping care for aging parents, you should save more than if you are single. Conversely, if you have parents who might help you in case of a crisis or you have other means of savings, you may need less in your emergency fund.

It can feel overwhelming to think of hitting your goal of three to six months’ worth of savings.   So, start small. If you can put away just $20 a week, by the end of the year, you will have saved $1,000 for your emergency fund.[4] Additionally, throw your extra change each week in a jar and watch that begin to accumulate for your fund.

Where to place your emergency fund

In an emergency, you may not have time to sell stock or other assets.  The key is to have quick, easy access to the funds.  This avenue may be accomplished through opening a money market or basic savings account.  You need that quick access, but not such easy access that it is tempting to use for other purchases. [5] Look for an account that does not have annual fees or a minimum balance requirement.[6]

Make savings a habit

Whether saving for retirement, college or an emergency fund, make saving a weekly or monthly habit.  Once you hit the three-to six-month saving goal for your emergency fund, continue to save.  And, if you do need to withdraw some money for an emergency, make sure you replenish it so there are funds for next time.

Creating an emergency fund is not necessarily fun, but the confidence it will bring you will be worth it.  Savings should be a priority so that you stay financially prepared and secure for anything life throws at you.

Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world.  Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business.  She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.

She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.

Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow.   She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.

She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.

She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk.  Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.

Claudia Mollerup-Madsen

Vice President and Financial Advisor, Wealth Management Division , Morgan Stanley

[1] https://www.morganstanley.com/access/emergency-funds

[2] https://www.morganstanley.com/access/emergency-funds

[3] https://www.morganstanley.com/access/emergency-funds

[4] https://www.saveandinvest.org/military-everyday-finances/start-emergency-fund

[5] https://www.morganstanley.com/access/emergency-funds

[6] https://www.morganstanley.com/access/emergency-funds

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