TedCo Software Financial Matters Blog

Schedule a holiday budget and credit check: When the triumphant freshman returns home for the holidays, schedule some R&R, home cooking and the first reading ever of their fall budget figures and their first credit reports. Since credit reports can be ordered online, parents and student should sit down with each of the child’s three credit reports from Experian, TransUnion and Equifax and review them for activity and errors. Since everyone is entitled to one free report from each of the agencies each year, go to www.annualcreditreport.com for theirs.

Help them open their first IRA: If your 18-year-old child is earning wages by working part-time at school, at home during breaks or for your own company, have them open a Roth IRA in a growth fund. Make sure they understand this is essential to their future savings so they don’t cash it in. Ask your planner about this.

Discuss identity theft: Personal financial data left on laptop computers, cell phones and other electronic devices can be readily stolen on campus or in a dorm or roommate environment. Tell your son or daughter to keep all paper records in a safe place and introduce passwords to keep all their digital information safe.

Get them networking: Internships and jobs in their chosen field during summer breaks can give your student a head start on their career path. Encourage them to research these opportunities in their freshman year so they’ll be in the front of the line when it’s time to apply.

Handle mistakes carefully: Most kids will make money mistakes in college. If they overdraw a checking account or overdo it with their credit card, make the criticism constructive but firm and always come up with a corrective plan you’ll work on together.

This time of semi-independence can be a great learning time for your children, but it is only semi-independence. Help them through it and the lessons they learn will pay dividends for the rest of their lives.

Jim Heitman, CFP®, is a writer, speaker, Certified Financial Planning practitioner in Southern California, and the founder of Compass Financial Planning – a fee-only planning and money management firm.

Here’s one to stir you up. Some bankrupt lenders are literally “trashing” the financial documents of borrowers, throwing names, addresses, social security numbers and financial records into dumpsters for any identity thief to find and use.

The consequences for the bankrupt lender? None. How do you prosecute a company that no longer exists? In businesses like these, greed trumps ethics every time.

Read the article: Bankrupt lenders throwing away your privacy

Without prosecution for this behavior, don’t expect fear of legal consequences to stop this type of irresponsible behavior.

I wrote yesterday about Bruce Schneier’s Password Safe. I use it and I recommend it. It makes password security easy.

Today, think about the financial information you have stored on your computer. Is it in a spreadsheet in your “My Documents” folder? Do you have brokerage or retirement account reports saved as PDF files on your desktop? Is your tax return stored for any good hacker to see in your tax software’s data directory?

TrueCrypt, http://www.truecrypt.org/, is free open-source disk encryption software for Windows Vista/XP, Mac OS X, and Linux. It is the best tool I’ve found to protect my financial information. I’ve used it for years and do not fear the loss of my financial data … or any other data, files, photos, etc. that I have encrypted. All my USB memory keys are encrypted with TrueCrypt and now (after the release of version 5 last week) my hard drives are too.

In fact, the BEST feature of TrueCrypt 5.0 is drive encryption. You can use TrueCrypt to encrypt your entire hard drive so that, without the correct password, no one can access your computer.

Caution: Even if you protect your computer with TrueCrypt, a weak password is a no-no. I use passwords of 20 random characters containing upper and lower case letters, numbers and symbols. Brute force efforts might crack them give enough time, but I have nothing that warrants the time a brute force effort would entail.

Here’s an example of a strong password:

K8dn20f^j3#(IaQL1@gM

With a strong password, TrueCrypt and Password Safe, you have a lot of what you need to protect your financial data. All three are free!

This morning I posted the first page to the new web site IdentityTheftChecklist.com. It offers a quick, “What To Do” to respond to identity theft.

Because I warn my friends about securing their identity and protecting their financial information, more and more frequently I field calls, “Rick, someone stole my identity! What do I do?”

IdentityTheftChecklist.com is my effort to put together a list of the steps I would take if my identity were stolen. It’s a quick answer to, “What do I do?”

I’ll fill in the details in the near future, but right now, there’s enough information about what one should do when their identity is stolen for them to get started with their response to identity theft.

Check it out at: