Financial Management

Creating online access to accounts

Many people fear creating online accounts to manage their finances. They are concerned that their accounts will be hacked, money will be stolen, or will experience identity theft. Unfortunately, these events can happen even if you never go online. In fact, not creating online access may increase your risk of your accounts being hacked. How can this happen?

Most financial institutions are rapidly moving all of their data online. In fact, many are beginning to charge a premium to send you paper statements or to interact with humans at their institutions. If you are not willing to allow your data to be online, you basically can no longer do business with most financial institutions.

Some financial institutions allow you to set up online access just by going to their website and providing some key sensitive data. If a person has managed to steal the basics such as your social security number, birth date, and zip code, they may have the ability to create online access. However, if you have already created an account online, they cannot create a new login. Thankfully, financial institutions have created good protocols that prevent others from resetting account logins by requiring two factor authentication or use of challenge questions that only you can answer.

It is important to use good "online hygiene" to keep your accounts safe:

• Use strong passwords that no one could easily guess
• Do not use the same password for multiple account
• Do not log into financial accounts from public computers
• Use secure WiFi when logging into accounts in public areas

Once you have created online access to your accounts, it is a good idea to manage these accounts using account aggregation software such as Mint.com or Yodlee. Using aggregation software, you can easily monitor all of your accounts from one site. This will allow you to catch fraud early and also allow you to share your financial picture with your future financial caretaker so they can watch behind you.

To provide additional backup in case of an unlikely yet serious internet disruption, consider downloading statements from your accounts to your computer at least once a year. This way, if your institution is ever "brought down" by hackers, you have documentation of your assets.

By using software and the internet smartly, you can greatly increase your chance of financial security and reduce your chance of financial fraud and abuse as you age.