Protecting your money

Image by 3D Animation Production Company from PixabayWhat it means:

When we think of protecting our money, several images may first come to mind. We might visualize someone’s wallet being snatched from their shopping cart or coming home to find their home has been burglarized while they were out. In our modern world, these risks are real. However, there are other risks and challenges that need our attention. Among them are identity theft, potential lawsuits, loss of housing, risks from financial institutions, and choices in investing.

To safeguard our money from loss, these situations need to be considered.

Risks from:

Identity Theft

It has been found that while identity theft is a constant threat, the individuals perpetrating this crime aggressively target older ones and younger ones. They have even stolen the identity of deceased individuals, called ghosting. Their methods of attack vary from formjacking, piecing personal information together from social media, skimming devices, and hacking.

Lawsuits

Legal action can be sustained thru divorce, car accidents, personal injury on home or business property, and bankruptcy. Simple accidents at one’s home where a worker, a stranger, or a friend gets hurt can result in litigation. Popular automobile insurance tactics often force injured parties to sue the responsible driver for related costs. Divorce and bankruptcy can occur for a variety of reasons. If these potential situations are not given forethought one can find themselves suddenly in a world of hurt.

Loss of Housing

The possibility of the loss of one’s home can be a real chilling concern for many families. Loss of employment, health related expenses, and sudden skyrocketing costs or expenses can cause renters and homeowners to fall behind in their payments and put them in the line of fire for this unfortunate issue.

Risks from financial institutions

With recent scandals involving employees opening a huge number of credit accounts in customers’ names, without the customers’ approval, at Wells Fargo and another where Equifax was breached, we can readily see the reality that our financial institutions can become causes for financial insecurity.

Image by Linda Hamilton from PixabayInvestments

The stock market is an area we may see as only affecting a certain group of people. Many of us have a 401(K), mutual funds and other investments that we should be evaluating. Not giving them some care can be like letting our employer keep part of our paycheck and can cause us to have an uncertain future when we retire. Times of market unsteadiness can cause us to make emotional decisions that seriously undermine our investments’ profitability.

What are our resources?

Mitigating identity theftImage by Gerd Altmann from Pixabay

With identity theft being a very hot issue, it is important not to develop a mindset that it could not happen to us, that we are smarter than that, or that it happens to certain kinds of people. Thieves can put together enough personal information about their victims to be able to crack open the doors to gaining access to their target’s finances thru social media. So, it is important to be very cautious how much personal information we make available thru our online profiles. Information such as name, date of birth, phone number, family relationships, and addresses do not need to be accessible to the public at large.

Certain schemes of online attacks can be lessened by verifying WiFi connections are secure. Make sure to navigate directly to a company’s website and not use supplied links in emails. For better online security, browse with an online security tool running. When swiping a credit or debit card at a gas station or ATM machine, always scan the card reader for things that look out of place. At gas stations, consider running into the station for greater transaction security.

Statistics show that there is an increased risk for victims of identity theft or fraud to become a repeat victim. To protect themselves, victims of identity theft need to seek out resources for identity theft recovery process.

Minimizing financial institution risks

For our financial institutions, it is advisable to have both paper statements sent to you and to have access to online banking. Online banking gives the opportunity to be able to check one’s accounts daily. This will allow for immediate recognition of potential fraudulent activity. Paper statements give one a solid paper trail that will not be lost by a system error or loss of transaction history.

Regarding debit and credit cards there are a number of protections available to consumers. We need to be aware of them to be able to use them when needed. There is the Consumer Financial Protection Bureau (CFPB). This organization tracks and communicates current laws and is a resource for reporting financial industry related complaints. According to the CFPB, it is important to immediately report lost debit and credit cards. The more time that elapses between loss of card, non-approved transactions of the card, and actual reporting of the card being lost will result in more accountability for payments on these same transactions. So it is important to report a card’s loss or potential of being compromised as soon as possible.

Overdraft fees can be a hefty toll on our budget imposed by our own financial institution. CNBC reported on regulators efforts to encourage banks to drop overdraft fees. Even sending direct letters out to the banks that are known to make the most from overdraft fees or non-sufficient funds charges. These charges typically are the most complained about. They often become a snowball of fees before one has even been made aware of them. So they can become quite large quickly. It is important to review one’s financial institution for their policies and if they have responded to recent efforts in this regard. There are opt-in choices available if the institution has chosen to make them available and depending on what their chosen policy regarding this account option is. The current policies of one’s bank should be reviewed to see if the best selection has been made for your current needs. Communicating with your financial institution is very helpful because where many have responded to making account allowances, they still require the consumer to inform them if they want to take advantage of these allowances. It is possible that to avoid overdrawing one’s account it may be good to simply change banks if the one you have currently is not meeting your needs.

Controlling litigation risk

Lawsuits of course are best avoided to start with. Unfortunately, that is not always possible and why many incidents preceding them are called “accidents”. To help for these potentials there are a number of simple and cost effective options available such as an umbrella insurance policy for one’s home and vehicle to protect against personal injury claims. Asset protection trusts, now available in more states, provide a way to shield your assets and make it more difficult for suing parties to access your finances.

To loose one’s home would create a serious tragedy. The Consumer Protection Agency (CFPA) has posted certain available resources. These included mortgage relief, forbearance, and protection for renters. Where this is often a state-by-state matter, it is important to keep abreast of the laws for your state of residency or the state the home is located in, and any relief made available. There are often a number of local resources that can be tapped when needed.

Image by mohamed Hassan from PixabayInvesting for the future

Investments, especially when funds are short, tend to be neglected. We have all heard this. That said, ignoring this can leave us prone to difficulty in the golden years. Many of us have either mutual funds or a 401(K) thru our employer that helps with this shortfall area. Changes are often made to how much is withdrawn from our paycheck for them or we have opportunities to consider it. There are funds that allow us more room to navigate how our contributions are invested. During challenging times, it is important to have a clear investment goal and plan. Then, to stick with it. PBS Newshour provided a comprehensive checklist to consider and discussed passive investing versus trying to outguess the market.

With investments we not only have a selection of choices of investments we also have a choice of working with an investment firm. Selecting which firm we will work with requires trust. When making this decision we need to consider areas such as their experience and, are they a Securities Investment Protection Corporation (SIPC) member. This corporation provides security to investments similar to how the Federal Deposit Insurance Commission (FDIC) secures bank accounts. Using our own good sense and looking for a firm that understands your individual goals and is accustomed to working with people that have a similar strategy.

Conclusion

Reviewing our goals, available options, and keeping watch on our transactions gives us more financial control. There are a large number of resources available and the more we can be aware of and prepared for any potential issues the more successful we will be in protecting our finances.

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