Money and Finance

One of the best ways to save without paying any tax on the interest you earn is through an Cash ISA. Each adult can have one and you can invest up to £3000 a year in one.

This is an absolute essential investment tool.

Interest rates vary so you need to look around for the best ones. See one of the web sites I recommend to be able to run comparisons.

In November last year our little boy was born. From the previous March when we discovered I was pregnant we cut back and saved as much as we could because we new our income would drop dramtically whilst I was on maternity leave. Four and half months on SMP does not even cover the mortgage repayments.

In hindsite we should have started saving before we new I was pregnant, we would have had a bigger pot to see us through the maternity leave period.

Do babies cost money? Of course they do. How much is very much dependant on what you spend, how much you are given in terms of cloths, cots, prams etc. Don't forget that babies grow very quickly and is it really worth paying for designer baby clothes when your local supermarket or discount cloths retailer does them for a lot lot less?

I have not always had an emergency fund. When I first had a mortgage in 1989, interest rates were so high that I struggled to meet payments. I did and survived. I survived because I did not buy any luxeries. No CD's or videos. In those days my career was just starting out so my salary quickly increased and I did not have to watch the finances as closely.

For about the last 10 years I have had an emergency fund which is about 10% of my annual salary. This is sat in an instant access account with one of the highest savings rates around of 5% AER with Ing Direct.

When we have to dip into this fund the priority is then to replenish it by diverting funds from regular savings plans to this account.

I would thoroughly recommend everyone has an emergency fund.

As my first entry I have decided to let you know what sort of state my finances are in. I am in a position where the only debt I have is the mortgage. I pay my credit cards off in full each month.

Since I got married 5 years ago we decided that apart from the mortgage we would never have any loans again. If we needed somthing we would save for it. For those emergencies I have a fund which is 10% of our annual salaries.