Password (In)security

Personal Finance
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By Lyman Howard

Learn more about Lyman on NerdWallet’s Ask an Advisor

Protecting your financial data online is every bit as important as any other aspect of your financial health. You cannot get around communicating a great deal of your personal information over the internet today. Even if you have chosen to not volunteer information via a social media profile, these days all industries and service providers are migrating your business to online for cost reduction and efficiency. From banking to electronically signed contracts, customer profiles, to bill paying for your utility accounts, so much of your information is transferred back and forth via the internet, typically through your email, better if through secure file sharing services.

While this is a great development for many reasons, you must take precautions. We feel that simple security steps are something you can easily control. We would like to offer 3 simple actions that we believe you need to implement today (not tomorrow!):

1. Secure Webmail Accounts

– If you have a webmail account such as Gmail/Yahoo!mail, learn about and sign up for the option of double authentication, also known as two step verification, via your mobile phone. Even if armed with the username and password of your email account, any would-be hacker could not access your email account without holding your mobile phone at the moment of login. Two step verification sends a unique, single use PIN code to your phone which must be entered at each and every login attempt each time a new computer is used. The hassle factor for you increases slightly, but the consequences of a breach are significant enough to make it very worthwhile.

2. Assign Unique and Strong Passwords

– Your important passwords should be long and complex. It imperative that your delicate financial accounts have completely separate passwords from the various other internet account passwords you use. Were a mass data breach to occur such as last year’s well publicized hack at Yahoo!, you would not be vulnerable to a domino effect if your passwords at other accounts were totally different. Here is a demonstration of how far a lengthy password can go toward thwarting a code breaking program: http://howsecureismypassword.net/

3. Consider Using a Password Manager or “Vault”

– Now that you have protected your webmail with two step verification and created lengthy and distinct passwords for your sensitive logins, make it simpler to maintain the discipline to keep your passwords strong and unique. People hate the requirement to periodically change and update their dozen or more passwords.  Most people are inclined to revert to memorable and easy phrases or words, to recycle old passwords, or to make tiny modifications to an existing password, enough to call it “new”. Do not make that mistake. Instead, consider using a “password vault” program on your computer. The vault is a database that stores your passwords for you in a single repository. A vault program generates new random passwords for you to use, with the necessary alphanumerics, special symbols, and minimum length. Additionally, it will rate the strength and effectiveness as you are creating it, guiding you to a more effective password choice. You afterward need only memorize a single, long password to the vault, and from there the vault reduces the frustrations of multiple password management. You can find out about a good password vault program from an IT professional or a reputable software review website such as CNET.com.

Do not forget to ensure that your trusted loved ones or heirs will be able to locate your accounts and passwords in the event you become dead or incapacitated. Periodically print out a list from your password vault and keep it under lock and key in a secure spot such as a safe deposit box. You cannot assist your family after an emergency if they don’t have access to vital information when needed.

Utilizing online functions and services does not have to be frightening, and you should adopt them. You must simply make yourself a “harder” target against internet threats. Please take some basic actions (the above list in by no means a complete solution) that will offer you an acceptable level of safety, benefit from the increased efficiency of online commerce, and go about living your life fully and free of unneeded anxiety.

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