Strategies for Safeguarding Your Finances Amidst Economic Instability
In this money-conscious era, many Americans are worried about the impact of Trump's tariff policies on their wallets. Daily headlines warn of potential economic damage due to higher prices and slowed growth, making investors sweat, from day traders to retirees.
But there's more to fret about; in today's digital universe, we're increasingly vulnerable to identity theft and other financial crimes. And with the Consumer Financial Protection Bureau (CFPB) scaled down, help might not be as close as we'd like if we fall victim to financial fraud.
Fear not! Regardless of the economic and tech landscape, there are practical steps you can take to safeguard your dollars. Here are six key ones.
1. Banking fortress
If you've got your money in a high-yield savings account, it's earning a rate that outpaces inflation. But if cyber crooks swipe your bank fund, recovery can be a nightmare. So, follow these tips to keep your money secure:
- Set up mobile alerts for low balances and suspicious activity, so you catch possible fraud early.
- Steer clear of public Wi-Fi. Use a secure network instead, such as your home Wi-Fi or a private cellular connection, when logging onto the bank.
- Use a password manager to generate strong, unique passwords for each account.
- Enable multi-factor authentication, which often involves verifying your identity via a texted code when you log in.
Bonus: Check out our website's list of top high-yield savings accounts.
2. Overdraft intelligence
Over a third of American workers (34%) scrape by paycheck to paycheck, so overdrawn accounts aren't uncommon. Some banks charge hefty fees for this, with the average overdraft fee amounting to $27.08 in 2024.
To stay in the black, consider these tips:
- Set up low-balance alerts, so you know when you're running low and can curb your spending.
- Opt for overdraft protection, which moves funds from a linked savings account or line of credit when an account is overdrawn.
- Keep a budget, designating your income to necessary and discretionary expenses, curbing overspending and preventing a negative balance.
Bonus: Learn more about different types of checking accounts.
3. Anti-scam vigilance
Default identity theft scams had consumers losing over $10 billion in 2024, with more than $2.7 billion of that due to impostor scams. To avoid becoming a victim:
- Avoid clicking on pop-ups or links in suspicious emails as they might contain malware or direct you to scam sites.
- Be wary of anyone asking for urgent payments, as scammers frequently create a sense of urgency to trick victims into acting hastily.
- Verify any communications from a financial institution by hanging up and calling their official number found on your card or statement.
If you've been a victim, report it to the FTC and file a local police report.
4. Subscription audit
Subscription services like Netflix and Disney+ charge monthly for streaming content, but 86% of users pay for at least one unused service, according to Self Financial. To root out these hidden costs:
- Review your credit card statement regularly. Identify services you're paying for but not using and consider canceling.
- Use apps, such as Capital One's subscription manager, Cleo, or Subby, to help track and manage your subscriptions. Some apps even negotiate better deals for you!
5. Bank reappraisal
The average American keeps the same bank account for almost two decades, according to a recent survey. Don't miss out on better deals elsewhere. Look for benefits commonly found at online-only banks, such as high rates, no fees, and low or no minimum balance requirements.
6. Recourse resources
Regardless of changes in consumer protection agency operations, help is still available if you have issues with financial institutions. You can submit complaints about financial products or services through various channels:
- CFPB: Submit a complaint about a financial product or service on their website.
- FDIC: File a complaint on the FDIC's website to address consumer protection issues involving its member banks.
- FTC: If you've been scammed, File a report with the FTC to receive assistance creating a recovery plan.
- Federal Reserve: If you have a problem with a bank or other financial institution, file a complaint to the Federal Reserve, who'll pass it on to the appropriate federal regulator or Federal Reserve Bank.
- Office of the Comptroller of the Currency (OCC): File a complaint with the OCC if you experience issues with a national bank or federal savings association regulated by the OCC.
- State Bank Supervisors: Find and contact your state's financial institution regulator through the Conference of State Bank Supervisors directory and file a complaint.
With economic uncertainties and quick tech changes, these simple steps can help you snag the best bank accounts and securely manage your money while minimizing unnecessary expenses. Stay informed about crisis-related safeguards and best practices for digital safety to protect your finances from external risks and digital theft.
- To ensure your savings are secure, fortify your high-yield savings accounts with mobile alerts for low balances and suspicious activity, avoid public Wi-Fi, use a password manager, and enable multi-factor authentication for added protection.
- Overdraft fees can pile up if you're not careful. To maintain a positive balance, consider low-balance alerts, overdraft protection, and budgeting to avoid unnecessary fees and consistently stay in the black.
- With identity theft on the rise, remain vigilant against scams. Avoid clicking on pop-ups or suspicious links, be wary of urgent payment requests, and verify communication from financial institutions to prevent falling victim.
