It’s been a distracting and nail biting week but I have had it confirmed that I am actually going to get the money I am owed! Amazing! I’ve spent the last couple of days trying to decide how best to manage it. I started off by thinking about all of the different funds I had previously either been working towards or aspired to starting – car maintenance, home maintenance, the emergency fund, Christmas (I never manage to put back a monthly amount for this), holidays…the list seemed to go on and on. However, I realised that by breaking it down I would have lots of little bits of money in different accounts when I would probably be better off putting the majority of it in an ISA where I could earn more interest and where it would be easier to manage.
I had originally given myself a target of £3000 for an emergency fund with the intention of starting some general savings for the future once that was completed (in additon to starting some of the other ‘funds’ mentioned above). However, this idea really needed to be revisited based on our needs for the coming year. The main things that we might need ’emergency’ funds for would be if something went wrong with one of our cars or something needed to be fixed or replaced at home. We’ve had plenty of experience of these type of expenses over the past few months! We would also like money put aside here for any other bills or expenses that crop up unexpectedly. The most drastic financial emergency would obviously be if one of us lost our income in which case we would just have to take whatever we needed out of our savings – I don’t think we really need a seperate account for this specific problem. For now, the emergency fund needs to be something we can access easily as and when smaller problems than this arise. As I already have £1000 in my emergency fund I am going to leave it at that – it should be more than enough to satisfy these needs.
So what am I going to do with the rest of it? Well, first off I can now put back the funds required to finish the work on the house that we are so very close to finishing. As we own our property (albeit with a mortgage) I see this as a good investment. This left me pondering slightly about what else is really important to me/us. One of the things that my year on Shoestring Alley has shown me is that being able to do things and go on holiday is really important to me – I need that change of scenery and pace from time to time! Thus I have decided to put a small amount aside to start a holiday fund. I very much doubt we’ll be going anywhere this year but I think it is a good idea to start a fund for next year which we can slowly add to as and when we can afford it. Actually, this is a fund I want to keep going in the long term so I am pleased I can make a start on this! Having a special account put aside for this should keep me motivated in topping it up whenever we can.
While the funds are there I’m going to get one or two things that I’ve been putting off buying – a printer being one of the items on the list (ours hasn’t worked for over a year). Other than that, anything left will go into an ISA. I’m going to look into opening a new one with a better rate of interest.
I should receive my money next week so I’ll spring into action then – at least I now have a plan! Knowing the funds are on their way has taken a big weight off my shoulders. Although we’ll still be on a tight budget it is a huge relief to know that we should be able to pay for any problems that crop up while I’m not earning. This should give me a bit of peace of mind during my maternity leave allowing me to concentrate on more important things. All in all, a pretty good start to the weekend!