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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:

TransunionProcedure and Fees by State
ExperianProcedure and Fees by State
EquifaxProcedure 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.

Final Thoughts

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.

 

28 thoughts on “Three Simple Steps You Can Take Right Now to Protect Your Finances

  1. Thank you for the list Groovey, I already got all 3, done and done. Keepass, 2 step, and all 3 of the credit agencies jotted my name down when I lost my wallet with important info in it. The only one that was not a pain in the butt to call was TransUnion. I’m not sure if that’s worth mentioning but if you have to call one, TransUnion has the best phone support 🙂

    1. Thanks for the tip, Lily. That’s good to know. I try to do everything on line if possible. I may have called one of them once to double check something about temporarily unfreezing a freeze but I don’t recall which one.

    1. Thanks, Chris. It’s odd that we (me, too) get lazy over the simplest of steps. Come to think of it I need to check my credit report!

  2. Such important points! I know we need to look into some kind of Password Manager! Thanks for the encouragementI am glad that we have our credit frozen though! That was a pretty easy process – especially since we haven’t “thawed” it yet!

    1. Thawing is pretty easy too although you’ll need the pass code. I believe mine were sent to me in the mail with written confirmation for each freeze. I think you’ll like the password manager once you give it a try. We use a second monitor next to our laptop which makes it even easier. We keep the password manager open on one screen at all times.

  3. Oh god, don’t talk to me about passwords… I may as well be my great grandmother, for all my password security is worth. But I have frozen my credit with all three credit agencies – and it was easy! I’m going to to fix the password thing. I know I must fix it!

    1. Ha-ha-ha! Too funny. It’s become so easy to do the credit freeze. I’m glad you have that in place. The password thing – just do it. Get it over with.
      Thanks for commenting!

  4. Great ideas. Honestly, we try and minimize the amount of financial info we access online. It still freaks me out a bit. We don’t use Mint or any of that other stuff (a PFblogger faux pas – I know!). And we keep our passwords written down offline, on paper. 🙂

    1. Thanks, Laurie. We’re like you. We don’t use Mint or anything either. We just use an expense tracker Mr. Groovy created and we check our institutions directly on their websites. And we don’t do any transactions or account checking from our cell phones. I can’t even imagine a situation so urgent that we’d have to use our cell phones.

  5. I, too, am a huge fan of the credit freeze. In MN the cost is $5 for each credit bureau, but it’s definitely worth the expense.

    Thanks for the great suggestions!

    1. Thanks, Kate. I don’t know why some states charge and others don’t. There doesn’t seem to be any human interaction involved in the process. But it’s still worth it, as you pointed out.

  6. Good advice, Mrs. G! I use Lastpass, and I’m hooked on using the password manager. It’s not too expensive for the premium version, which allows you to use it on both your laptop and your mobile devices. And I’m sure the randomly generated passwords help keep things more secure than what I could come up with.

    One thing that really compromises account security is using unprotected and public Wi-Fi. Even if you think you’re using a known source, you may not be (a lot of scammers will name their systems things that look legit.) Yet lots of people will just use any wi-fi system available to save on data, or set their phones to automatically scan for wifi. Not a good idea!

    1. I’m glad to hear you use Lastpass and are getting value from the premium version, Emily. And thanks for bringing up the point about unprotected Wi-Fi. Mr. Groovy and I had a related “incident” on our recent road trip. We had our laptop with us and he just HAD to look at our brokerage account one night at the hotel. We had already discussed waiting to sign up for Obamacare until we returned home because it would be too dangerous to enter confidential information on public Wi-Fi. So when I saw what was up on the screen I became alarmed and pissed. “What the hell are you thinking” I yelled at him. He got out quickly and I made sure he checked the account and changed our password when we returned home.

  7. I think all these small simple steps are really important, especially since so much of our daily transactions are done online. I know so many friends who use the same password and pins for their accounts because they are too lazy to come up with new ones. But if they were to be targeted, all their data would be comprised!

    Definitely feel that this is an area we have to all look at, thanks for highlighting it Mrs G!

    1. Thank you, TTW! Yes, laziness plays a part in not paying attention to security. I also think many of us believe we’re immune – until it happens to us.

      Just FYI, a little while back when Home Depot had a huge breach we were notified because we used a credit card during the time period involved. They offered us free credit monitoring. After doing a little research I learned that by using these monitoring services you sometimes put yourself in even more jeopardy. So we passed on it.

  8. Thanks for all the great advice, Mrs. Groovy! I NEED a password manager! I’ve known I need something to organize the passwords and keep them secure, but keep procrastinating. I’ve probably spent more time resetting my passwords than it would take to get the manager set up. On my list for Christmas break!

    1. Thanks, Amanda! I know what you mean about all the password resetting. It seems like some of those systems force you to do it every other week! I think you’ll find a password manager very easy to use once you put it in place.

    1. You are SO a financial grownup, Gary! For my job I simply kept my passwords in a notebook and that worked. But none of the accounts would particularly put me, or my employer in jeopardy if hacked. A password manager takes a little getting used to but after a while, you’ll wonder how you ever got along without it. Thanks for stopping by.

  9. Mrs G, great advice, timely. Cyber security is escalating as an issue (e.g., Yahoo breach, biggest in history), and it’s smart to take a few steps to protect yourself. I love credit freezes, and have had them in place for a few years. Great peace of mind. Thanks for the great advice!

    1. Thanks, Fritz. We’ve had credit freezes for probably 10 years now. We just temporarily unfreeze, as necessary. And even so, it’s important for us to check our credit reports. Unfortunately, some companies issue new credit cards without even running a check on the social security number provided.

  10. Allow me to second the idea of two factor authentication. The major brokerages all offer it, usually for free. You just need to find the right form to request it.

    One additional idea to add onto the credit lock is to regularly check your credit report for errors and fraud. You can do so for free from the governments site annualcreditreport.com

    1. Glad you find the two factor authentication useful. Great minds think alike – I actually mentioned annualcreditreport.com but it was kind of buried in the Final Thoughts. I don’t like using any of the other websites that offer “free” reports because there’s too much up-selling. Thanks for commenting, FTF.

  11. Lots of great advice Mrs Groovy, I have started enabling Two Factor authentication on my accounts and opting into email notifications when my accounts are logged into from a New device.

    Takes little effort to set up security and a loooong painful battle if your accounts do get compromised. I am liking that I can sign into accounts via fingerprint on my phone as well – easier and more secure than a PW

    1. Thanks Mr. AE. I like receiving the notifications too. I also think it’s smart that most institutions send you email notifications when your password is changed, so if it’s not you who did the changing, better hustle on over to your account and take a look. The fingerprint thing is cool. We don’t have that yet. Is that only on an iPhone or can you use an app for it?

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