On a recent walk, Mr. Groovy and I listened to a podcast of Farnoosh “I-Make-More-Than-My-Husband” Torabi interviewing Bobbi Rebell. Bobbi is making the rounds discussing a book she wrote called How to Be A Financial Grownup. Although I haven’t read the book, the title hit home and made me think about what it means to be a financial grownup. Sure, there’s the usual spend less than you earn and don’t get into credit card debt, etc. But as important as these lovely credos are, to me it’s equally important that we protect our finances from criminals. Here are three simple steps you can take right now to protect your finances.
Use a Password Manager
A password manager stores all of your user names and passwords for websites you frequent in one place. It also generates unique and complex user names and passwords for logging into these sites and stores their URLs. It provides you with a quick and safe way of accessing your accounts and other websites containing your confidential information. You may store the data locally on your computer or in the cloud, depending on which manager you use.
The most obvious benefit of using a password manager is that you no longer need to remember or write down user names and passwords. Let’s face it; most of us are not very original when it comes to log-in names and passwords. We often simply use an email address for the user name and a mother maiden’s name, our middle name, or a pet’s name for a password. And we tend to reuse the same user names and passwords over and over again, making it far too easy for a thief to hack into our private data.
When you use a password manager, you only need to remember one master password. For this, Mr. Groovy and I keep a text document with a string of 200+ characters that includes our master password. Only we know how many characters it contains and where the password begins and ends. We simply copy and paste it into our password manager. Then, with the click of a button, we let the manager generate a unique user name and password for each log-in. We decide how many letters, numbers, and special characters we want to include. We also keep notes on each URL with additional security questions and answers that might be required to access our accounts.
Dashlane, KeePass, RoboForm and LastPass are a few of the many popular password managers you may find easily online. Some offer free and premium versions; others have additional bells and whistles such as compatibility with mobile devices, and two step verification.
At first you may think that using a password manager is a very cumbersome task. I admit, I wasn’t so fond of the idea when Mr. Groovy suggested it, but now I’m hooked. And just to clarify—for accounts that have absolutely no financial or credit card details stored, I often still use simple word/number passwords. I really don’t care if anyone hacks into my FaceBook account—in fact I might consider it a favor.
Sign Up for Two Step Verification
Many banks and financial institutions now offer or require two-step verification, also known as two-factor authentication. Two-step verification is a great way to add an extra level of security to an account. It usually involves a five or six digit code sent to you in a text message. Once received, you must enter the digits into the website within ten minutes. If someone steals your user name and password, he must also physically have your cell phone in hand to receive this extra bit of information. Without that texted code, a user name and password will do a thief no good.
Some institutions are even taking it to the next level with voice recognition. Sign on for that too if your institution offers it. Again, I realize adding steps to access your accounts may be tedious, especially when you’re in a hurry. But these procedures are painless ways of protecting yourself and there’s really no good reason to skimp on adding security measures to your accounts.
Obtain a Credit or Security Freeze for All Three Credit Bureaus
The three major credit bureaus (Transunion, Experian, and Equifax) all offer a credit, or security freeze. A credit freeze is a function that prevents your credit report from being given to third parties—although there are exceptions, such as certain companies you already do business with. It’s applied to your social security number. To activate a credit freeze with each credit bureau, go to each website individually and set one up online. This only takes a few minutes to complete.
Credit freezes are regulated by each state. In the past, these were mainly available to victims of identity theft, but that’s no longer the case. There may be small fees involved in initiating a credit freeze, or no fees at all—depending on the state you reside in and the reason you wish to request the freeze. You may also lift, or temporarily lift a credit freeze, or refreeze your credit. If a fee is required, you may want to first complete any pending business transactions that require a credit check such as applying for a mortgage, credit card or new job. You can find out more about the procedure and fees at each credit bureau:
|Transunion||Procedure and Fees by State|
|Experian||Procedure and Fees by State|
|Equifax||Procedure and Fees by State|
I’ll share two concrete examples of a credit freeze in action that worked perfectly. Both involved federal agencies.
A few years ago, I attempted to access Social Security statements for Mr. Groovy and me on the Social Security Administration website but was blocked from doing so. When I phoned the SSA, the agent asked whether Mr. Groovy and I had any ongoing issues with our credit—any bankruptcies, bills in collections, etc. I told him we did not—and that in fact, we instituted a credit freeze to help protect our good credit. “Aha!” he exclaimed. Then he explained that the SSA uses Experian to verify the identity of anyone trying to access his or her account. He advised me to lift our Experian freeze and try again. So in other words, the credit freeze locked down our Social Security numbers so tightly that we were prevented from accessing our own Social Security information! Within the next ten minutes, I lifted our freezes, collected our Social Security statements, and then refroze our credit with Experian. And this was particularly easy since we reside in North Carolina where no fees are involved.
The second instance occurred when I applied to become the fiduciary for my aunt’s Veteran’s Aid and Attendance benefits. I was required to present a full accounting of my aunt’s expenses and needs to a VA field examiner. We met at my aunt’s nursing home where the examiner also chatted with my aunt, and thanked her for her husband’s service. A few days later he phoned to let me know he needed to do an additional background investigation of me, including a credit check. I explained that I had credit freezes placed with the three credit bureaus and asked him which one he intended to use so that I could lift the freeze. He began laughing at me. “I’m with the Feds,” he said. “Don’t you worry. I’ll be able to access your information!” “Okay then,” I replied. Ten minutes later he called back. “Son of a gun!” he said. “I’ve never seen anything like this. You were right”. He proceeded to tell me which credit bureau the VA uses. “Wait ten minutes and try again,” I told him. Fifteen minutes later he had all the information he needed.
No method of protecting your finances is foolproof. You must be vigilant and check all of your financial accounts and credit card activity frequently. Just this week we received a notification from our community bulletin board about a PayPal scam. Thieves are targeting PayPal users this holiday season and hijacking funds from user bank accounts. A neighbor was alerted to a fraudulent transfer and was able to stop it in its tracks. Mr. Groovy and I changed our PayPal passwords in a matter of minutes.
When traveling, add alerts to your credit and debit cards. And make sure your mail is collected at home (so no one gets his grubby little hands on those pesky credit card offers). Check your credit report several times a year to make sure you have no stray or unfamiliar open accounts. You can do this for free via annualcreditreport.com, which directs you to each credit bureau where you’re allowed one free check per year. If you stagger your checks you may obtain a report every four months. And yes, you can run these checks on your own credit, even if you have a credit freeze.
With 2017 just around the corner, why not make it a resolution to put these three simple security measures in place? You’ll start the year out on the right foot.
Do you take any additional measures to protect your finances? What works for you? Please share in the comments.