The Best Way to Store Your Important Financial Documents

With the rise of computer viruses and ransomware, do you have your electronic financial documents secured against the latest cyber security threats?

If you’re unsure, don’t worry. I’ll show you how to store your important financial documents securely.

Documents to Keep Secure

In the article 5 High-Tech Solutions for Your Money Binder, you can find a template to create your own Money Binder. When creating your own binder, it should include important documents such as:

• Life Insurance documents
• Wills
• Trusts
• Power of Attorney
• Medical Directives

In addition to those documents, you may also consider securing your social security cards, recent tax returns, and birth certificates. Your original documents should be stored securely in a safe deposit box, locked filing cabinet, or a fireproof/water-resistant home safe. But what do you do if you would like to store a copy electronically?

Risks of Storing your Documents Electronically

It’s simple to scan and store your documents online on the cloud through tools like Google Drive, Dropbox, or iCloud. You can even do it directly from your smartphone.

Storing documents on the cloud makes it easy to retrieve files from anywhere in the world. But you need to consider the security implications of transferring your scanned documents into an electronic format. Ask yourself, “What is the worst thing that can happen if this document gets into the wrong hands?”  

If you decide to store any of these documents electronically, assess the many threats you may face, such as:

• Ransomware
• Theft
• Viruses
• Data failure

Ransomware is on the rise with several hospitals becoming infected, prompting the FBI to release this official statement. You may have also heard about Gmail, LastPass, and even the CEO of the identity theft protection agency, LifeLock, being hacked. No company or computer is 100% secure. You can’t control the threats, but you can control how you protect yourself.

How to Store Your Important Financial Documents Securely

• Always Think Twice. Consider the possible pros and cons before storing documents with social security or account numbers. Minimize your risk by minimizing the critical information you choose to store online.

• Password Protection. By password protecting your computer or smartphone, you will create a first line of defense against those who have physical access to your device. Ensure that you have a secure password for your device. You can check how strong your password is on howsecureismypassword.net. Here’s how to do it onAndroid and iOS.

• Be Aware of Temporary Files. Scanning documents will always create a temporary file on your device. That temporary file is usually an image, which is then typically converted into PDF. When you move, upload, or delete the PDF file, the original image may still remain on your device even after removing the image from your recycling bin or trash. To fix this problem, take the following steps:

• • Clear your app cache and data. Here’s how for Android or iOS.
  • Clear your temporary files. Piriform has created a free powerful tool: CCleaner for both Windows and Mac that will clean your computer’s temporary folder. Ensure that “Temporary Files” is selected before you click “Run Cleaner.”
    • Warning: Please un-check all other boxes if you are unsure of their functions. You can find more information on CCleaner here.
  • Clean up third party folders. The software included with your scanner or third party apps on your smartphone may store your temporary files in a different folder. The solutions above may not address these folders. It’s important that you’re aware of how your applications store your scanned files and how to find and delete those temporary files.

• Securely delete documents. When you delete a document from your recycling bin, it’s not completely deleted. EaseUS Disk Data Recovery is just one of many solutions that can recover files that you thought were permanently deleted. This is important to know if you donate or resell your old devices because your financial information can be easily recovered. If you’re planning to donate or resell an old device, consider these tricks for thoroughly cleaning it:

• • Use a free space wipe.  CCleaner also offers a free space wiping function which will let you securely delete any files that were deleted from your recycling bin. Here’s how to use it on Windows and Mac.
  • If you’re donating or selling and old device, the 100% safest way to protect your data is to remove the hard drive storage and to physically destroy it. If that isn’t possible, here’s another way to securely erase those files.

• Use encryption. Encryption is essentially scrambling your data so that is unrecoverable without a key (i.e. a password, fingerprint, or pattern). There are many encryption solutions to secure your data. Here are two ways to use encryption for storing your important financial documents:
  • Device Encryption: By encrypting an entire device, you protect your data in the event that your device is physically accessed. Here is how to enable encryption on your device.
  • File Encryption: Encrypting individual files allows for the secure transfer of documents on the internet. This is a good practice if you decide to email or store sensitive files on cloud solutions like Google Drive, Dropbox, or iCloud. Here’s how to encrypt file on Windows using 7-zip. Although the developers of 7-Zip only officially support Windows, you can download an unofficial version for Mac from KekaOSX.

• Back up your files. A good backup plan may be the only solution to protect yourself from ransomware or hardware failure. The easiest way to back up your financial documents is to use a cloud backup solution. Most solutions will constantly scan the folders you designate to create an up-to-date backup of your files. Financial documents will almost always be small, scanned files and therefore will not require a large amount of space for backup. Because my “Important Financial Documents” folder is less than 200Mb, I used iDrive’s Free 5Gb solution which offers “256-bit AES encryption using a user-defined key that is not stored anywhere on [iDrive] servers.”

• • Test your backup solution. A backup tool is worthless if you cannot recover your data. Once you’ve successfully chosen and set up your backup solution, attempt to recover your data by retrieving your backup on a different device.

Whether you keep your important financial documents in a safe deposit box or encrypted online, there are definitely pros and cons to each. Now that you understand what it takes to securely store your important financial documents electronically, you are better equipped to make informed decisions on your own document storage strategy.  

Article found here.