Protecting Your Finances

Are you ready financially for what life may throw your way? The following tips can help protect your finances and your financial security from life’s curveballs, such as job losses, health issues, identity theft, and more.

Set aside money for emergencies. Life happens – and having some cash that you can draw on for unexpected expenses and emergencies, such as job loss, can help prevent undermining your long-term financial security. One rule of thumb is to set aside enough to cover three to six months of living expenses. However, each circumstance is different, and that amount may or may not work for you. Savings accounts, money market accounts, and certificates of deposit (CDs) are generally good choices to keeping your rainy-day funds in.

Protect your income with disability insurance. If you become sick and are unable to work for a long period of time you wills need funds to cover your expenses. A monthly income is possible with disability insurance if are unable to work due to a serious illness or injury. There are two types of disability insurance: short-term and long-term.

Protect your assets with umbrella insurance. Umbrella insurance is designed to help protect your assets from large liability claims that exceed the limits on your homeowners, auto, and boat insurance policies, which may be as low as $100,000, $300,000, or $500,000. 

Protect your family with life insurance. If there are people in your life who depend on you financially, life insurance can help protect their financial security after your death by providing a cash payout that can help them cover their expenses.

Protect your finances by naming someone to handle them when you cannot. If an illness or injury leaves you unable to manage your finances, you will need someone who can do it for you. Once you have chosen someone, you need to make it legal by setting up a durable power of attorney for finances, or a revocable living trust. You may also want to determine a back up person in case your first choice is unable to serve.

Review your checking and savings accounts regularly. Keep an eye on the activity in your checking and savings accounts by reviewing bank statements. You may also want to sign up for text or email alerts from your bank when there is activity. If you spot unauthorized transactions, report them immediately.

Protect your account information. Create separate complex passwords for each account. Ensure the device you are using is secure, shred paper statements, and be wary of calls, emails, texts that are requesting account info or your SSN or birthdate.

Keep your debit and ATM card numbers safe. To help prevent scammers from using these numbers to gain access to money, the Federal Trade Commission recommends not disclosing this information over the phone unless you initiated the call, don’t leave your account info open, don’t carry your PIN number and limit the cards in your wallet.

Know your balance. Knowing the balance of your checking account before initiating new transactions can help you avoid overdrafts and related fees.

Pay attention to the FDIC-insurance limits. To help protect the money in your checking and savings accounts from bank failures, keep an eye on the amount of money you keep at any one bank. The Federal Deposit Insurance Corporation insures deposit accounts up to $250,000 per depositor, per insured bank, for each account ownership category. If your deposits exceed this amount, you may lose money if the bank fails. To learn more, visit the FDIC’s website.

Review your credit scored regularly. To help protect your credit. Check your credit reports regularly. Businesses use these to judge whether you are a good credit risk. The higher the credit score the better. Reviewing your credit reports gives you the opportunity to spot and correct errors in your credit history and look for signs of fraud. You are entitled to one free credit report every 12 months from each of the three major credit reporting agencies – Equifax, Experian, and Transunion. You may also want to consider using a credit monitoring service because it may help you spot fraudulent activity sooner.

For help with protecting your finances, please consult with us. With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty, we look for facts. We call our approach evidence-based investing. Call us today at 802-878-2731 to schedule a strategy session and begin building your road map to financial success.

Article published in March 2021 edition of Eye on Money. If you would like to be added to our mail list, please email jennifer@dh-cpa.com.