Money and Finance

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.