Is Online Banking Safe?

Online banking is becoming an increasingly popular form of financial account management because it gives people the convenience of performing financial transactions such as depositing and transferring money whenever they want from any location – provided they have an Internet connection. Although banks use various strategies to secure the electronic transactions of their clients, consumers must take certain steps to make their electronic transactions much safer.

Security Issues
One of the biggest security problems in online banking is harmful malware. These applications are used by malicious people to intercept users’ personal data, including transaction information and passwords. Malware can affect different types of electronic systems including tablets, network routers, desktop computers, and smartphones.

Another type of security problem in Internet banking is phishing. This refers to an electronic attack that compromises people’s personal information. Criminals often send fraudulent emails that mimic the appearance of official bank emails and with links that lead to fake websites. Phishing steals users’ personal information and passwords when they enter the data into their computers.

Avoiding Risks
The most obvious risk of online banking is theft. However, some bank deposits are secured by the Federal Deposit Insurance Corporation (FDIC). Certain financial products such as stocks, mutual funds, non-deposit investments, and insurance products are not covered by the FDIC.

A person risks becoming ensnared in identity theft if a criminal successfully steals his personal information through Internet financial account management. Many criminals use the information they steal from online bank accounts to commit fraud like applying for credit and loans under other names.

Institutions typically use encryptions and protocols to protect their clients’ information when transactions are conducted electronically. One of the technologies used in Internet financial account management is secure socket layer protocol, which helps to authenticate clients’ electronic connections with their lending institution so that they can avoid connecting to a fake website. The bank then checks to make sure that the information it’s receiving has not been tampered with before continuing with the transaction.

Safe Account Management
Install antivirus software on your desktop computer and laptop to protect it against viruses and malware. Update your anti-virus software regularly to ensure it has the latest security features and updates.

Avoid sharing laptops and other portable Internet devices to avoid risk of exposing yourself to malware and other potentially malicious applications. Only perform exchanges on laptops and computers that are properly secured.

Never disclose your personal pecuniary information including account numbers, PIN, or passwords to anyone through word of mouth, text messages, emails, or phone calls. In addition, do not perform Internet transactions with a financial institution that does not encrypt its client’s electronic transactions.

Online banking is a great way to perform transactions and keep track of your money and account activities. One of the most important things to remember when doing transactions online is that your money is only as safe as the devices you are using. While Internet financial account management is considered safe and convenient, it is important to protect your identity and money when doing transactions electronically.

Tips for Personal Finance

Monitoring income and expenses is a tedious process that requires patience and foresight. While it may be dull to balance your checkbook and ensure bills are being paid, the security provided from managing your money is priceless. By employing a few simple techniques you can make the process both easy and enjoyable.

When I first entered college, I found myself having to manage my first income along with a sizeable amount of bills-rent, groceries, cell phone and recreation money. I spent the first semester going out to eat, to the movies and buying unnecessary items. I soon found that I had blown my savings from my summer job. Instead of having a comfortable financial cushion, I was soon living off a meager income from a part-time campus job-lets just say ramen noodles became a fixture of my diet.

Unfortunately, I had not set up a balanced budget to ensure I was paying all my bills, saving money and allotting for “fun” money. I had overlooked one of the crucial steps for managing money: I did not set up a budget to know how much I was making or spending. It is important to sit down with your pay stubs, bills and receipts to determine how much money can be allotted for each item. In fact, this basic step is really half the battle to ensuring a sound money management strategy.

The repercussions of not having a balanced budget can often cause you actually to lose money. For instance, many banks charge overdraft fees when you buy an item and do not have sufficient funds. While in college, I often found myself not only with depleted bank account but also a hefty overdraft fee-usually around $35 dollars-after not closely monitoring my spending. It is hard to imagine now, but I was actually paying for my poor money management choices.

So, what are a few simple steps to balancing a budget? The first step you must do is actually total the money you receive monthly. Add the sum of all the income or support you receive-whether it is from a job, rental property or a relative. After figuring out your monthly income, next add up all your monthly bills-rent, mortgage, cell phone, water, gas, electricity etc. Once you have both of these numbers, subtract your total income from your expenses and what remains constitutes your surplus from each paycheck.

Now, many people decide to spend their surplus income on personal hobbies or entertainment. While it is certainly appropriate to spend a portion of your income on these items, it is not wise to spend all your extra money on dining, clothes or other luxury items. Instead, saving a portion or investing your money in a personal project allows you to invest in yourself and help you grow as a person. For example, I spent my summers while in college working for a landscape company, so I could invest in my education and myself. Although I had a lot of surplus money from the job-I lived with my parents during the summer and had almost no bills-I choose to invest and save for my education. This investment took years to pay-off, and I had to sacrifice going out and having fun; however, the “nest egg” I saved over the summer helped me pay for college expenses and develop a better future.

Finally, it is important to not see money management or a budget as a hindrance to your life. Instead, it is important to view it as a necessary tool to ensure a successful future. When I save money now, I do not feel as if I am “sacrificing” for tomorrow; rather, I recognize that I am ensuring I will have a safety net later in life. By positioning saving money as a “precaution,” it reframes it as a necessity and a much more essential part of my livelihood-rather than a burdensome sacrifice.

So, the next time you find yourself out of money at the end of the month or paying overdraft fees, reflect back on the techniques you are employing for managing money. Make sure you have developed a balanced budget, allotted “fun” money and are investing in your future. Whether you are a young professional or an individual nearing retirement, it is never too late to develop the skills necessary to managing money. Most importantly, do not think of budgeting money in detrimental manner. Rather than seeing it as a deterrent to your current life, view it as a necessary insurance policy to ensure a bright and secure future.

Importance of Savings As a Secondary Income

A lot of money management lessons and experts acknowledge that savings are an important starting point towards having a secondary income. Savings in this regard point towards the money that is saved every time an individual gets any form of cash be it salary, gifts or tax refunds. The savings you create over a long period of time or even a shorter one could prove to be as important as having another stream of income. These savings always help you especially in meeting unexpected expenses and realizing future goals.

Affording Large Purchases

One of the greatest advantages of having personal savings is that they enable you make some large purchases like houses, cars, meeting college fees etc. saving gradually greatly builds your savings value and this enables you to inch closer to affording that great dream that you have. In this scenario your savings act as an extra source of income as you can take them plus the cash at hand you have and fully pay for that big goal you have been working towards achieving.

Savings enable you to make these huge purchases without the option of taking a loan or debt to finance the purchase. In a normal case, if one does not have enough money to buy something they have the option of taking out a loan in order to get enough resources to pay for the purchases. If you have savings in your bank account or in any financial institution, you could use them instead of taking a loan which will plunge you into more debts.

Earning Interest

If you were to put your savings in an interest earning account, you will have created another source of secondary income for you and the family. However, in order to earn a substantial interest from your savings, there are some factors that you ought to consider. The interest rate is one of the most important factors to consider first if you want to earn more. It is important to remember that the higher the interest rate will be then the higher your money will grow. The other factor to consider is the time that you will keep your savings deposited in your account. The longer the money will stay in the savings account, the more the interest you will earn making your income to be higher as time goes by.

The third factor to consider is the way the bank you use pays its interest. Compounding interest is the way most banks pay their interest meaning that you will be earning an interest not only on the initial amount you have saved but also on the interest you earn per year. This is a sure way of earning some extra income from your savings adding more advantages of having savings in the first place. When looking for a bank to place your savings in, ensure that the bank has a higher Annual Percentage Yield (APY) as it will mean that your savings will earn you more returns per year.

Putting Your Savings in an Investment

When a person decides to have some savings on the side, they are not only said to be saving but also investing in real sense. It is possible to put your savings in a form of investment that you will not touch for a long period of time like maybe 10 years. It is not a must that you put such savings in a bank account rather you can invest them in a more benefit-earning investment option. It is possible to risk these savings on the stock market or pensions which are better performing and guaranteed to give you more returns in the end. They can also be invested for the long term that is you can opt to keep the savings there until when you retire. When you liquidate your savings you will make a good sum of money in returns as the savings will have grown by leaps and bounds.

Savings act as a safety Net

It is always advisable to save for a rainy day or any eventuality that might occur in future like loss of employment. If at any given time you may lose your job, your savings should be sufficient to push you through a period of around 6 months before you become stable again. In this case, your savings will be an important source of income as they will help you cope for the period of time you will be jobless.

From the above facts, it is crystal clear that savings are generally as important as your other sources of secondary income and it is paramount that everyone takes up the habit of saving. As much as one is always thinking of looking for other avenues of earning an extra income, it is important that people realize the importance of savings to an individual. Therefore it is important that every person everywhere in the world takes it upon themselves to ensure that they have sufficient savings in bank accounts, investments or peer-to-peer lending networks. They will provide them with an extra income as well as shield them when the rainy day comes.