Using your finger is the best way to interact with apps on the iPad, no doubt about it. But for drawing and creating sketches? The finger is sadly lacking. It blocks your view, is not accurate, and it can be tiring to use it as a pen all day.
Enter the iPad Stylus. But, for upwards of $30 you can forget it. Make your own.
Mine is made from an old exacto knife and a bit of sponge. (Did you know they are conductive?)
Just take the knife part off, and use a pen to force a tightly wound up piece of sponge into the hollow interior of the handle. I then used scissors to trim the sponge to a rounded nub.
It works great! The whole handle is conductive, so I do not need to be careful how I hold it and my mockups and design sketches come out just fine. I no longer use paper and a pen anymore.