Remember the saying, “An ounce of prevention is worth a pound of cure”? That goes for your finances too. Whether you have a little money or a lot of it, taking steps to safeguard your finances is important for your future. Here are five easy ways to protect your finances.
Choose FDIC-insured banks.
The Federal Deposit Insurance Corporation, or FDIC, is a government agency that ensures your bank deposits won't be lost in the event of a bank failure. You get no such guarantee if your bank isn't insured.
Check to be sure that your current bank is FDIC-insured and be sure to verify the insurance when you're shopping for new banks. In the case of a credit union, look for NCUA (National Credit Union Administration) insurance. With both FDIC and NCUA insurance your checking, savings, money market, and certificate of deposit accounts are insured up to $250,000 per account. As your deposits grow, you can open additional accounts at other banks to increase your protection.
Keep strong passwords.
Having an online account makes it easy and convenient to manage your financial accounts. You can check your balance, transfer funds, and pay bills right from your computer or smartphone without ever having to enter a bank branch or ATM. But, because your online account provides so much access to your finances, it’s important to protect your login information. Make strong passwords with a combination of letters and numbers that can’t be easily guessed or hacked. If your bank offers two-factor authentication - where your login is verified with an email or text message - you can add another level of security to your account.
Access your accounts on trusted networks and devices only.
As consumers and banks get better at detecting and prevent fraud, thieves look for more creative ways to get to your personal and financial information. One of those is by intercepting your username and password information. This is why you should avoid using public computers and wi-fi to log into your financial accounts and even the email account that you use for password recovery. Hackers can intercept your login information or sometimes have installed spyware that can capture your account information. Even the strongest password won’t protect you if it’s hacked.
Invest wisely.
Investing is one of the best ways to grow your money beyond a savings account. A variety of investment options are available for consumers to want to get a bigger return. Stocks, bonds, ETFs, mutual funds, IRAs, and real estate are a few examples of investments you can choose from. But, just as you can grow your money through investing, you can also lose it. It’s important that you invest wisely in what you know.
If you're interested in an investment, educate yourself before taking the plunge, even if it's recommended by a trusted loved one or financial advisor. Minimize your risk by developing a sound plan and diversifying your investments.
Report suspicious account activity immediately.
You should monitor all your financial accounts regularly so you can act quickly if you spot anything out of the ordinary. If you see unauthorized charges on your credit cards or bank accounts, contact your bank immediately to have the charges reversed. Reporting unauthorized transactions quickly is also important for reducing your liability for fraudulent charges. Waiting increases the amount you could be liable for.
When it comes to your credit report, you should deal with fraudulent accounts to prevent debts from being racked up in your name. Not only that, you may need to place a fraud alert or security freeze on your credit report to reduce the likelihood that additional fraudulent accounts will be opened in your name. It may make it harder to apply for your own credit accounts, but will save you from spending time and money clearing up identity theft.