6 Ways to Manage Your Risk and Protect Your Money! (Part 3)
Image sourced by Giovanni Gagliardi @gagliardiphotography
In Part 1 and Part 2 of this series, we identified 30 everyday risks and how to manage your risk and protect your money.
Since then, the Budget and Grow Rich® (BAGR) Research Team has been travelling about, looking out for new ways to help you get ahead in today’s stressful and financially complex world.
Put these six best practices into action to protect yourself and your money.
Let’s get to it.
‘Smash and Grab’ thefts are on the rise. Smash and Grab means that a thief walks up to your car, smashes a window, grabs your valuables, and runs away. Don’t leave valuables in your car! Examples include:
Money
Smartphones
Ear buds
GPS device (if standalone although unlikely with smartphones)
Laptops
Textbooks – years ago, my college roommate parked his car in the street in Philadelphia; he left his car alone for maybe ten minutes; thieves stole his textbooks
Sneakers and hiking boots
Dry cleaning
Yoga mat
Backpacks
Suitcases
Clothes possibly; for example a down jacket
Camping equipment
Other items that appear to have value
Lock up your checkbook and credit cards and keep control over them 24/7.
I have some turnaround experience where I have helped companies facing financial difficulty stop the ‘bleeding’, get back on track and restore positive cash flow. Typically, the companies were losing money and running out of cash.
The first thing we do is lock up the checkbook.
This tactic is designed to prevent them from spending money.
You can implement this tactic regarding your personal finances too.
If you’re like me and are tempted to spend money, locking up your checkbook and financial accounts is a prudent way to reduce your spending. Especially on non-essential, luxury and splurge items. This technique will help you save money for retirement savings or reduce debt (debt reduction).
If you make a personal budget and you’re trying to curb your spending, this is a great technique.
From the standpoint of protecting your money, ‘locking up your checkbook’ makes it a little more difficult to spend money.
In addition, you can reduce the likelihood that thieves will steal your money.
Last year, my ex-girlfriend was running a quick errand and left her checkbook in the console in her car – Visible to the naked eye. She may have left the window open too but I don’t recall. A thief broke into her car and took a personal check. Interestingly enough, the thief took the last check in her checkbook, making it harder to notice that a check was out of sequence, that a check was missing. The thief fraudulently made out the check to a used car dealer for $6,000. And drove off into the sunset [sorry].
The good news was that the thief made out the check for $6,000. For checks that exceed a certain amount, my ex-girlfriend’s bank was supposed to check the signature on the check. Her bank failed to do that. So the bank was obligated to reimburse her for the $6,000. Whew. But. . .
a. That should not be an excuse or give her (or you or me) a free pass or a get out of jail free card.
b. Contact your bank and credit cards companies to learn their rules.
3. Account Hacking – Implement ‘Double Authentication’.
Double authentication means you have to enter two items to access your financial accounts online.
To access my Wells Fargo checking accounts and savings accounts, I enter my user name and password. Then, I have to initiate a text message which generates a one-time, random security code. This gives me access to the bank’s portal and my bank accounts, credit cards and credit card accounts.
I do Not set any of my accounts to remember my user name or password – even from my home computer.
4. Set text alerts with your financial accounts – bank accounts and credit cards – to notify you when activity occurs. You can select the dollar-threshold, for example your financial institution will send you an email or text alert when a transaction exceeds a certain dollar amount. This enables you to contact your financial institution quickly.
5. Checks – Shred them [and other papers that contain your signature and someone else’s and sensitive personal information].
To deposit the check, you are supposed to sign (endorse) the back (that’s called ‘endorse the check’). That means your signature is on the check as well as the person who wrote the check (the payor). When you use mobile banking apps, to deposit a paper check into your account, you have to selfie the front and back of the check. That’s different (obviously) from depositing your paycheck or a personal check into an ATM machine. By shredding the check after you deposit it, you reduce the risk that a thief will steal the signatures.
6. Use credit cards or cash instead of debit cards. This creates a buffer between the merchant (payee) and your bank account. This helps you protect your money.
Credit cards (and debit cards) provide a record – supporting details – of each transaction. Although, you can get a receipt from the merchant regardless of how you pay.
I prefer credit cards for convenience and to capture the rewards points and loyalty points. BUT, if you are carrying an outstanding balance on your credit cards, stop using your credit cards to avoid costly interest expense.
A few weeks ago, I shared these best practices to protect yourself and your money with my three children, Alice, Rita and Mike V. They rolled their eyes. I’m sure they were thinking, “Here’s Dad giving us these corny tips, yet again.”
I get it. in fact, I can’t blame them. But. . ,
When you implement these tips and make them a habit, you increase the likelihood you will protect yourself and your money tenfold – 10X! These techniques and tactics provide sound risk management.
Very inexpensive protection.
Give it a whirl. And let us know how it goes.
For additional ways to protect your money and to Save More Money on Groceries, Every Day – click here.
See you next week.
Arthur V.
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