Sandra Wilkerson, a straight A college student studying business and accounting, never expected to run into problems with her finances. After all, she had a budget, she stuck with her budget, and she tracked all of her finances through her smart phone. In fact, she was so organized that she stored all of her information in her phone. Since she always had her phone with her, it seemed ideal.
But that fateful afternoon, someone stole Sandra’s purse and cell phone. All of her information and identification disappeared in just a few seconds. Since she had settled in to the coffee shop for a long study session, she did not realize that her purse and phone were gone until she packed up for the evening. She called the bank and credit card companies, but within those hours, everything was drained. Savings account. Checking account. PayPal account. Credit balance maxed. Everything.
Sandra’s first mistake was relying completely on personal financing applications to track her spending. The application she used included all of her passwords for her accounts, user information, and identity verification. Even without advanced technology, it was easy to break into her accounts because she kept the relevant information in a .txt file on her phone.
Aside from identity theft, using personal financing applications without exercising certain precautions runs other risks as well including
As tempting and convenient as it might be, do not instruct any of your phones, tablets, or settings to remember your password. Not only is your account at risk if someone picks up your device, but your account is at risk because it is constantly online.
Keep your passwords in a protected document on another device or encoded on paper, and do not make it clear what the passwords refer to. James Marcus, a financial consultant, recommends including fake answers that only you can distinguish from. Or alternatively, assign a fake name and description to your passwords.
Just as enticing as keeping all your passwords locked in at all times, allowing personal financing applications to govern your financial tracking draws in even the most careful planner. Remember that not all thieves are so obvious as to steal your purse and cell phone. Some prefer to skim the credit card numbers by using fake machines or sifting through shredded pages. In many cases, you won’t know your account has been compromised until it’s too late.
In many cases, thieves launch what might be termed a test run. A test charge is run against the credit card or withdrawn from the account. Then, sometimes immediately, sometimes a time later, the thieves drain the account. If you are not paying attention to what is happening in your account, you may not realize what is happening until the money is gone and your checks start bouncing.
Use personal financing applications to guide your spending goals and habits. They can be helpful in determining your patterns and weaknesses. But don’t use them to hold all of your financial and account information.
Remember though, Sandra’s quandary was intensified because she did not have any other access point to her accounts. Everything was in her phone. And just because you create an electronic back up, it doesn’t mean that you will be able to access that in an emergency. Files can easily be corrupted or made inaccessible. Encoded records or statements locked in a safe will give you access even when the computer or internet fails.
For years, savvy men and women have balanced their checkbooks using ledgers and spreadsheets. This system may seem tedious, requiring that you check every charge, date, and your balance, but it offers the best protection from slip-ups.
Balancing your checkbook by hand requires that you write down every expenditure and every deposit. Not only will this make you more aware of what you are spending but it will give you a paper trail so you will know almost immediately whether you are over budget, under budget, or looking at an attempted identity theft.
To make the process easier and maximize your protection, balance your checkbook every evening or each time you make a purchase. Logging into your accounts on a regular basis and checking all of the charges and deposits will keep you aware and on top of things. If you do this on a regular basis, it will take only a few minutes rather than hours.
Though Sandra did everything she could after she learned about the theft, it was too late. She got back into her accounts eventually but only after tremendous time and frustration. Contesting the credit charges helped her financial loss, but the bank still refused to refund her money and she has not found the thief.
In this age of technology and interconnected convenience, it can be easy to follow their siren call and stop monitoring our financial accounts. But convenience comes at a cost, and your financial security and protection is not something you should sacrifice for mere convenience.