7 tips for good financial hygiene | by Brian Wright | June 2022
Simple ways to build wealth and protect what you already have
OSince my wife and I got married, our household has always had two incomes. Through multiple layoffs, disabilities, and the regular emergency home repairs, we have been blessed to pay our bills regularly and on time. But even with good credit, it’s easy to get sloppy with your finances.
Recently, my wife had to make an adjustment to her retirement plan that would change her net pay. I asked her if she checked her account last week to see if the adjustment had been made. She nonchalantly said, “Oh, I’ll take care of it,” as she walked into another room to watch her favorite reality show…I was horrified.
I watch my account like a hawk – I notice when they change the color of the buttons on my banking app or change the order of the steps on the bill payment screen. I’m this crazy job that turns up on a Thursday night for a $50 gift card to be part of a two-hour user experience focus group. Knowing if my payslip was accurate would be paramount… every damn week… until I saw the change.
The correct answer for most people lies somewhere between me and my wife.
Here are some tips for good financial hygiene… and we don’t mean money laundering.
Check your accounts daily
I’m not a morning person, but luckily the advent of cell phones gives me an excuse to start checking email and a few apps each morning before my feet hit the ground – it helps me wake up. One of these apps is my bank account. It’s too easy to overspend or think a charge has been cleared, as each company has different rules when it comes to when charges hit your account.
The other day my son borrowed my credit card to fill up on a Saturday. I never got a notification and the charge didn’t show up in my account until Wednesday. I have used the same station and it has never taken so long. Too many delays like this and you quickly find out you’ve spent a hundred or two hundred dollars too much.
More importantly, checking your account daily will help you spot a fraudulent charge…or worse, spot identity theft as soon as it happens. I’ve caught many charges, many a day, simply by diligently monitoring my account.
Even if you can’t check every day, at least make a habit of checking 1-2 times a week.
All alert everything
I love SMS and in-app notifications I get on my phone when someone swipe my card. That’s how I knew something was wrong when I didn’t get a notification of my son’s card usage. Going out to eat and getting the charging alert on your phone before the waiter comes back to the table adds an extra layer of security. Sure, he or she can use the card for a nefarious purpose, but you have a record of the very last swipe before things went haywire.
Never use your debit card
Debit cards seemed such a good and convenient use of technology, but withdrawing cash instantly straight from your bank account always seemed so final. I also never liked the idea that if I needed a refund, the cashier had to give me back dollar bills and pennies.
After watching Speech by Frank Abagnale at Google about the dangers of debit cards, I never used them again. Frank, in case you don’t know, is the guy who made a movie about him called Catch Me If You Can starring Leonardo DiCaprio. Considered one of the best scammers in the world, Frank ended up using his evil powers for good, working for the FBI on cybersecurity and other fraud cases.
Check your FICO score frequently
Almost every bank now offers a free service to check your FICO score through their web app. It’s part of their service and they want you to have good credit. A customer with good credit means they can sell that customer more services like their credit card, car loans, and mortgages. Check at least quarterly if not monthly.
Be careful with every email
In all honesty, the number of phishing and other email scams that pop up in email inboxes every day is staggering. Even when I receive an email from a company I do business with, I rarely, if ever, click on the links in the email.
Any instructions…click to get a discount, click to change your password, click to update your info, I’m closing immediately. I usually open a new browser, often one without tracking, and go straight to the site to see if I can find similar instructions for the special offer or need to update my information. If the request is genuinely legitimate, I should be able to find a hint on the site once I’ve logged in.
I almost got caught ten years ago when a virus hijacked my computer browser and was able to mimic the exact homepage of a bank I used. Every time I opened the browser, it took me to a replica of the bank’s homepage, except for a warning that I needed to update my personal contact information. When I clicked on that link it literally asked for all personal information which I knew had to be a scam. I saw how easy it was for people to exploit the elderly and others who were assumed to be unfinanced or ignorant of technology.
Pay yourself first
My wife and I live paycheck to paycheck because we pay ourselves first. Sometimes this practice got us into trouble because we needed to charge a small expense on a credit card until the next payday. But to build wealth, you need to invest, whether it’s just in a retirement plan or in tax-deductible accounts and other financial vehicles.
Today the list is endless as to where you can get your money to work for you – online brokerage, crowdfunding sites, even buying treasury bills. Did you know the US government is now offering bonds you can buy online at over 9% interest?
I hate physical coupons but digital ones are fine
If you read my horror stories about clipping coupons from the newspaper when I was a kid, you know I hate physical coupons. But if you take your phone everywhere, why not download the app at your favorite grocery store and digitally clip coupons at your leisure? Instead of going to Facebook, spend 15 minutes clipping digital coupons that apply automatically when you pay with your customer savings number. No embarrassing confrontation when handing in an expired voucher.
If you really feel like it, you can download an app like Bring, and scan your printed or digital receipts to redeem a rebate that converts into points toward items like gift cards. I got about $25 worth of free Amazon gift cards for using Fetch. And yes, they collect data on all my spending habits, but I don’t care if they know I buy a lot of Frosted Flakes.