Canadian Personal Finance Blog

Security of your financial information is essential, for many reasons. Identity theft is the main issue, in that if someone can get enough information to re-create your identity in some fashion and get credit cards (or worse) in your name, it will create huge issues for you.

Fraud is rampant in our society, and you must be diligent to ensure you are not a victim of this crime.

Paper Security?

The Shredder , as we spoke about on Tuesday is your security weapon for your printed records. Any old financial records must be destroyed (after they are no longer needed, please don’t just destroy records without knowing whether you need them any more), or stored in a safe place until they are no longer needed. The safest place I can think of for saving important financial documents would be either a Safety Deposit Box or a home safe (or strong box). This will secure your printed information.

What kind of information?

1. Old Tax Forms, with receipts and associated responses from the government
2. An inventory of your house with it’s estimated value (don’t store that in the house)
3. Wills
4. Birth certificates and such
5. Receipts from Credit Cards, Property Tax Payments, and such (I think the rule of thumb is at least 3 years of that data).

Computer Security

Damn right you need computer security .

Possible Computer Security Attacks

First whatever computer you are running your Financial Software tools on, must be secured with a password of some kind, that is common sense.

Next if the computer is connected to the Internet (which it most likely is), then it must also have Anti-Virus and Anti-Spy Software, or your data can be corrupted, or worse still your machine can be compromised by:

• Trojan Horse software that simply replaces parts of your system with it’s own versions which will look for information on your computer.
• Key Capture software that will simply steal your on line banking password, by logging all the keystrokes you type on your system and sending them to another computer

Yup, this can happen to you, and you need to protect your finances from this kind of attack. There are many others, I am just highlighting the major ones here (there are many, many more attacks out there).

Network Security

If someone can break into your home network, they can get onto your home computers and steal information directly from your system. There are some easy fixes to stop this (or at least slow it down).

If you have a home network and have a home router, please change the password on the router from the factory default and turn off remote administration! You may as well leave your front door open if you have this turned on, and I can’t tell you how many configurations I have run into that are set up this way.

Linksys, has changed their default configuration to FORCE people to change the default password, but on older routers, this is not the case. If you have a router and don’t know what I am talking about, you need to get someone in to set up your network security.

If you have a wireless home network, TURN ON WAP or some other wireless security, and turn off SSID broadcast. Look up War Driving and see what can happen to unsecured wireless home network configurations.

I had an old router who’s security was compromised, and I ended up selling Herbal Viagra for a while (I didn’t make any money on the deal, and I had my Internet access turned off for a week, and only got it back because I plead stupidity about how I had not configured security on my system).

Again, I am only highlighting a few areas, if you aren’t sure, consult the Internet or call someone who knows about this kind of stuff, don’t just hope it doesn’t happen to you.

Disposal

Inevitably you will want to dispose of either the backup media you have been using for your computer, or even the computer itself and this is where many people’s identities get stolen (if it can happen to F1 Driver Lewis Hamilton, it can happen to you too).

1. If you have old floppies around the house and you do not know what is on them, run a powerful magnet over them, or destroy them (with a hammer).
2. If you have been doing backups on to CD’s or DVD’s and you do not need these backups any more, destroy the media (my shredder actually chews up CD’s and DVD’s, so that is where they go).
3. If you have tape media, cut it up, burn it, whatever.

This media if just thrown out, is insecure and can easily be used to get information about you (especially if they have been used to back up your financial data).

The one computer point people don’t think of is disposal of your computer. Your computer has a hard drive in it, if you simply throw the computer out, the hard disk has all of that information on it about your finances, and whoever picks up the computer now has this information.

The best thing to do with an old computer is the following, remove the hard drive from the system, and physically destroy it. Either take it apart and smash the platters, go at it with a sledge hammer or something of the like.

If you want to give this computer to someone or donate it, you must find a shop that will WIPE the disk clean or buy software that will do that. This software will overwrite the data on the disks over and over with varying patterns until the only people who might be able to read it is the CIA or CSIS, you can then donate your computer (but I won’t, I will destroy the hard drive by hand, I don’t trust any of this stuff).

Never, ever give a computer away with the hard disk intact, if you have used it for any financial work at all. Even if all you did was order some stuff from E-bay on line, wipe it clean.

Am I Being Paranoid?

You are only paranoid if everyone is not out to get you (hey I am now the Big Paranoid Cajun Man), but seriously, securing your financial data both hard copy and soft copies and the associated software is the most important thing you can do for yourself, and your family.

My major tool in my Financial Planning activities is my computer. I use it to track my spending, I use it to make up financial plans for the coming time, and I use it to analyze my spending habits, all in all a very powerful tool for me.

My wife prefers to use pen and paper because she likes to see the spending and such, and if that is the way you work, I have no problem with that either. It takes a little longer, but maybe when it takes longer you might notice and absorb more information from the data entry side of things.

Financial Tools

My major tools that I use (I am not endorsing these computer tools, I am simply pointing this out to be complete) are:

1. Quicken, first and foremost this is the tool I use to keep track of spending and attempt to report trends and such. A very powerful tool, that I still don’t think I am using completely correctly.
2. Tax software, in this case Quicktax, but only because it is so simple when I do it this way and I can E-file my taxes which is quicker and easier for me. I also use that tool to infuriate myself figuring out what might happen if the Government supported Income Splitting.
3. Excel or whatever spreadsheet you like. I like to extract data from Quicken and then use it for some elementary calculations and forecasts in Excel. Excel has some very powerful financial functions, but make sure you are using the Canadian versions for Interest calculations and such.
4. Powerpoint, to present information easily to my wife or to my banker, if I am going in to try to get Free Banking
5. Internet Explorer or a browser for On line banking, and thanks to my PC I no longer walk into my local branch weekly to get my banking updates, I get them daily on line. This is an amazing capability that we take for granted that didn’t exist 20 years ago. I pay bills that I don’t have to mail in any more either.
6. Firefox or Internet explorer as a research tool, by looking up on Government sites I learn about Tax rules, by reading company’s web pages I learn about good investments and by reading some amazing Blogs, I learn about Finances in general (see my right bar for some excellent financial bloggers).

These tools make Personal Finance for me a little easier to deal with.

Take Care of your PC

As with all tools, you must maintain your PC. Yesterday my PC was taken away, because it was doing suspicious “Virusy” things at work and now I sit at my kids’ computer attempting to get anything done. I am lucky because I have an entire I.T. group to take care of my PC (for now), most folks do not, so here is my views on the minimal I.T. tasks you should be performing on your PC (this advice I do actually stand behind, because this is an area I think I have some expertise):

1. Backups, backups, backups! If there is any data on your computer that is important, you must make sure it is backed up in some fashion. There are many ways to do backups
   1. Back data up to CD’s or DVD’s if you have a CD writer. If you don’t have a CD or DVD burner, go get one NOW.
   2. Norton and other services are now offering network based back up services that you can subscribe to. I would read their agreement closely to see what re-courses you have if your secret data is compromised by their backup system, but this is still another way to go.
   3. If you have TWO computers at home, make a BACKUP directory on each, and back up important data on the other machine. At least if one fails you still have your data.
   4. Floppies? Well, if you think that is the way to go, knock your socks off, but I do not recommend it.
2. Restore! Yes this is just as important, you must test that you can restore data from your backup system! Backups are useless if you cannot retrieve your data. If you have important data already backed up on floppies, transfer it to DVDs or Cd’s or something. Also check the state of your old important backups, because the Media it is on, does degrade.
3. Anti-Virus software, get something, ANYTHING, but do not think that your Internet Access provider or your good ideas are going to stop viruses from getting on your computer. Use Norton, McAfee, NOD or others, but use something or your machine will become compromised.
4. Anti-Spyware software too, most anti-virus systems now come with Spyware checks as well, important to get this kind of software, or you are going to end up selling Herbal Viagra from your PC.
5. Clean your computer. Vacuum out the fans at least, or take it to a reputable local computer shop to have it cleaned (ask for references from the local shop, if you don’t know the owner). I had a fan break on my CPU, due to dust and my machine was gone for a few days.

There are many other tricks of the trade you should think about, but this is my minimum list. If anyone else cares to comment on other important tasks, please feel free, as I don’t think this list is exhaustive, just a good starting point.

One of the things I have learned over the years is that if you drive on your snow tires for too long in the spring (or say over an entire summer), your snow tires degrade very quickly during that time, and they soon become useless if you are not careful. It is a hard balance to figure out when you should remove your snow tires in the spring (in Ottawa, in the Sault or places north, I am sure this isn’t even being discussed yet). I called my mechanic and he is inundated with folks wanting their snow tires off and their summer tires back on, so I know that I am at least part of the crowd.

When I was younger one year, I figured I’d save myself some money because I needed to get NEW summer tires but my winter tires were relatively new, so I decided to stay on the winter tires all summer, for my troubles I ended up with:

1. Bad gas mileage
2. Badly worn snow tires (that had 1 season left in them after that summer, and they didn’t really do that well that 1 season either)
3. A noisy car all summer (snow tires on clear pavement are noisier)

Time to take off the snow tires and see if you can save some money on the $1.20 a liter gasoline here in Ottawa.

CPP and EI

Normally around this time of year I am lucky enough to have my CPP and EI payments reach their maximum, I won’t say exactly when since if you remember correctly, if I tell you this, you could then figure out my take home pay (thanks to Michael James on Money for that one). This year however because I have been transfered to a different pay area, my CPP and EI maximums are lost and I must start again from scratch. This means next year, I will get the extra money paid back on my taxes, however, I must continue overpaying, because our accounting system does not believe I paid anywhere else. A frustrating issue, that I have asked about, but given no real good explanation about.

Quicken and TD Not Playing Nice

So TD/Canada Trust has changed their on line banking interface somehow so that now my Quicken cannot do an automagic update from my TD accounts daily (it used to be able to), but now it fails, and I have to go onto the Easyline web site and do the downloads manually, which is annoying. Anybody else run into this interesting bug?