If you have an account with Zappos, the popular online shoe and clothing retailer, you were one of 24 million people exposed in last week’s hacker attack on the site. If you were a victim, it is important for you to take steps to protect yourself right away. If you were not, this should act as a reminder to stay vigilant and work to protect yourself against identity theft online.

It is important to note that only partial credit card numbers and encrypted passwords were accessed, not full passwords or credit cards. However, full names, addresses, phone numbers, and emails were access in the attack.

Unique Passwords

I have a unique password for almost every single website I use. Each password is a randomized alpha-numeric 15 character password. If I don’t know them, they are nearly impossible to guess and a brute force attack would be a waste of time. In other words, I am secure.

I have a level of security in the range of 96 bit to 128 bit security. What is important, though, is that I use a different password for each site. If one gets hacked, I am still safe on every other website.

Remembering these passwords is impossible. There is no way to remember one of them, let alone all of them. So how do I do it? I use Lastpass to manage my passwords. That password is the last one I ever had to remember.

Lastpass is a password security application that can generate, remember, and fill in your passwords for virtually any site you use. It is incredibly secure and is free and easy to use with Chrome, Firefox, Internet Explorer, Safari, and Opera. It works on Windows, Mac, and Linux. For an extra fee ($12 per year), you can also use it on your Android, iOS, Blackberry, or Windows Phone mobile device.

Not having different passwords across sites is plain stupid. Not having secure passwords is pretty dumb too. You might as well take advantage of this free option and have unique and secure passwords. It could save you a huge hassle and a ton of money if someone tries to steal your identity in the future.

Shop with Credit Cards

If you use a debit card or bank ACH payments to pay online, you are exposing yourself to a big risk. If someone steals those numbers and make a fraudulent purchase, you lose access to that money until the problem is fixed, if ever.

If you use a credit card, you are automatically protected from fraudulent purchases. Check your account rules for details, but I know that my Starwood Preferred Guest® Credit Card from American Express, British Airways Visa, and other cards all protect me from fraud.

Do It Today

Do not wait until you have a problem to fix your online security. Secure your passwords with Lastpass today and make sure to only shop secure in the future. Be smart, not a victim.

What strategies do you use to protect yourself online? Have you ever been a victim of online fraud? Please share in the comments.

Image by Don Hankins.

Secure Your Online Life is a post from: Narrow Bridge

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Now that we are a full week into 2012, it is time to start thinking about the dreaded tax season. Taxes don’t have to be difficult. For most of us, they can be a quick and painless process.

Gather Your Tax Forms

This is both the hard and easy part of taxes for me. Most of what I need just shows up in the mail, but I have to be patient and diligent to get everything I need.

Your employer will supply you with a W-2, which is the most important input on an annual tax filing for most people.

Your banks and brokerages will send you 1099 forms for interest and investment income.

Companies that paid you money, such as freelancers and online advertisers, may be required to submit a 1099-MISC or related form.

Schools and student loan servicers provide you with forms for deductions on education expenses. Schools give you a 1098-T and student loan providers give you a 1098-E.

If you have a mortgage, you will get a 1098 to list your mortgage interest deduction.

If you itemize your deductions, gather receipts from donations to eligible charities so you can list those as deductions. You can add those up to be input on one line on your form 1040.

Compile Everything by Category

As my files come together, I throw them in a big manila envelope by my file cabinet, but as it gets thicker, I know it is time to sort.

I organize my forms by income type. I create a bundle with my work income (W-2 forms). I then create a bundle with my banking and investment income and another bundle for 1099s for freelance and online income.

Behind that, I put my deduction information into bundles by category for education, home, and donations.

If you own a small business that has pass through income to your 1040, you have to create a unique income statement for each business with supporting documentation. I put those in separate folders with the income statements on top for easy reference.

Get the Files to Your Accountant, or Do It Yourself

Now that everything is easy to sort through, I fill out a form for my accountant. This summary allows the accountant to quickly move simple totals to my 1040 (saves him time and me money) so he can focus on the more complex parts of my filing.

If you have a simple and easy financial setup with only one job and few deductions, you can easily use an online program to save money. Just make sure that you are very thorough and accurate if you do it yourself.

Submit and Move On

After all those hours of compiling, adding, filing, and filling out your forms, it is time to submit. Double check your return to make sure there are no surprises. If all goes well, you will be able to file online and get a refund directly deposited to your account.

Questions

If you have any questions about organizing your taxes, let me know in the comments. I will make sure to answer everyone.

Image by MoneyBlogNewz.

Tax Time Strikes Again – Preparing for Your 2011 Taxes is a post from: Narrow Bridge

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My tax preparation process for 2011 has begun, but it is not too early to start tracking for 2012. Whether you need to better track your transactions, budget, or balances, the new year is a great time to get on top of your money.

Long time readers know that I am a fan of free tools that can save you time and money. Here are a few favorites that you should check out to help keep 2012 easy to manage.

Mint.com

I always come back to Mint.com when I need to track transactions by category and budget. This has been my go-to website for tracking my finances since July, 2007. Mint allows you to easily and automatically track your bank account balances, transactions, and budgets from an easy to navigate dashboard.

On top of that, you can use Mint to motivate and track your debt or savings goals. If you are not already a user, sign up today.

Account Balances

If you want to track your financial account balances with some really cool charts at the same place as you track your mileage, reward, and point accounts, look no further than Adaptu. My friends at Adaptu have built some very useful tracking tools and the new mobile app (so far only for iPhone, but I have high hopes for an Android version coming soon) keep your balances in your pocket.

If you only want to track travel, you can try AwardWallet to track your miles and hotel points without mixing in your financial accounts.

Easy, Automatic Investing

I signed up for Betterment a few months back, and I have been thoroughly impressed with the site. It is incredibly easy to set up a small, recurring investment to build your wealth over time. I have had a modest gain and was able to think about something else while my money was at work.

If you sign up here, you can Get a $25 Account Bonus when you sign up for Betterment. Start now!

Your Favorites

What are some of your favorite tools to easily manage your finances? Any tips to help when tax time comes around next year? Please share your thoughts and experiences in the comments.

Image by myvirtuallady.

Start the New Year with Solid Financial Footing is a post from: Narrow Bridge

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Last week we looked at how to choose a credit union and why you might be best off at a big bank. Let’s take a few minutes to recap and help you decide what kind of bank is right for you.

Credit Unions

Do you have fairly simple needs? Are you someone happy with a checking account, savings account, and an ATM at your bank branch? Do you stay around home and have limited need for mobile banking?

If you said yes to those questions, you are a perfect candidate for a credit union. As the detailed post explained, credit unions are great for a lot of people. If your banking needs are limited to what a typical checking and savings account offers, you don’t need to waste time or money with a big bank. Credit unions usually have lower fees and better customer service, so this is the route for you.

Online Banks

Do you have a complicated account structure? Do you need to link up your checking, savings, investments, PayPal, multiple credit cards, and use your accounts as an automated funnel for your finances? Do you need online and mobile access to your accounts 24-7? Do you hate cash and wish everyone would just split the bill with credit cards to make it easier?

If those questions describe you, you probably want an online bank. I rarely use cash and hate having to split the bill with people who refuse to use a card. I like transferring money with my phone and depositing checks with my camera.

I have lots of accounts with different purposes, and my online bank works great for transfers and automating my money.

If this describes you, take a look at Charles Schwab Bank, ING Direct, PerkStreet, or Ally Bank for online options.

Big Banks

Do you like cash and easy ATM access? Do you make regular deposits in person? Do you want to keep things simple and under one roof?

If you like the simplicity of dealing with one bank and enjoy having both physical banks and ATMs everywhere, you would probably be happy at Chase, Citi, Bank of America, US Bank, Wells Fargo, or one of the other big box banks out there.

These banks are not known for customer service or low costs, but they are everywhere and they have every service you might need.

What I Do: A Combination

I ditched my big bank account when they decided to charge me a monthly fee. I am now using a combination of an online bank (Charles Schwab) and a credit union.

For the bulk of my banking needs, Schwab is amazing. I get free ATMs everywhere (they automatically reimburse other bank’s fees) including international. I can deposit checks from my phone. I can transfer funds to other banks for free online. I can easily move money between my bank and brokerage accounts online or with my phone. I can use the online bill pay to send payments and I get a checkbook for free.

For the few things I can’t do with Schwab, my free credit union account lets me deposit cash or coins into a savings account. I have considered adding checking and a safe deposit box there as well.

In combination, the two financial institutions cover all of my needs. I keep my old ING Direct account open for P2P transfers from my roommate for rent, but other than that I have closed all of my other accounts.

What You Do?

What have you done in the past for your banking needs? Based on what you read here, do you have any ideas for improving your efficiency or saving money? Please share in the comments.

Image by Joost J. Bakker IJmuiden

What Kind of Bank is Right for Me? is a post from: Narrow Bridge

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I just wrote a post about some of the benefits of credit unions, but there are benefits of using a big box bank as well. Here are some reasons to consider keeping accounts with the big guys.

Full Offering

Most big banks have a full line of banking products. They have checking, savings, CD, money market, safe deposit, car loan, home loan, business account, credit card, and debit card options. They offer everything you might ever possibly need for banking.

There are some big benefits to being able to keep your accounts at one bank. You can easily transfer money between accounts and you will be sure you can always take care of everything under one roof.

Convenient

There is something to be said for traveling across the country and having access to a bank branch or ATM if you need it. While I get my ATM fees reimbursed by my bank, going online only is not an option for some people.

If you like having access to ATMs coast to coast and bank branches all over the country, you might prefer the convenience of a big bank.

Time Saving

If time is money, it might be worth sticking with the big bank for the time saving factor. I have my investment, checking, and savings all at one bank. If I want to pay a bill, buy or sell an investment, transfer funds, or ask an account question, I can do it all in one place.

It is nice to have a one stop shop for all of your needs. I once had to cash in a CD at one bank, drive it to another to deposit to my checking, and transfer part for an investment with an ACH. It would have been much easier to keep it all at the same institution.

Professional

I love my local credit union, but their website could use some work. At a big bank, the website will be robust and functional. You might also enjoy the 24 hour customer service or mobile banking app. Those little things can make a difference.

Your Needs Come First

At the end of the day, you have to pick a bank based on your needs. If you are a frequent traveler that uses plastic to pay your needs are very different from a homebody that uses cash. Here is my guide to change banks if you decide to make the move.

Please share your thoughts and ideas on using a big bank in the comments.

Image by MarkWallace

In Defense of Big Banks is a post from: Narrow Bridge

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As more Americans have become frustrated with their large, corporate banks, many have been moving their business to credit unions. Credit unions offer some amazing benefits and could be a great resource for many people.

What is a Credit Union?

A credit union is a financial institution that is owned by its customers as a co-op. Each member votes on board members and major changes to the institution. They are not for profit companies and are generally consumer focused, with little or no business offerings.

Because they are cooperative owned financial institutions, they generally charge low fees and have competitive interest rates for loan and credit accounts. I joined my first credit union when I purchased my first car because it had better auto loan rates.

How to Find a Credit Union

Most credit unions have restricted membership requirements. My credit union started as an organization for public employees. I was able to join because my father had an account and worked at the local Chamber of Commerce. It is now open to all Colorado residents.

Some credit unions only take employees of certain companies. Some only take residents of a defined geographic area. Others are open to anyone.

To find a credit union, start by talking to your company’s HR department. If they do not have any ideas, there are a few good resources to find a good fit for your needs:

CU Lookup – Maintained by the National Association of Federal Credit Unions, the CU Lookup tool allows you to search by location or affiliation.

NCUA – The National Credit Union Administration is the FDIC for credit unions. It has tools to help you research credit unions before you join.

How to Choose

If you find more than one credit union that you are eligible to join, take a look at their offerings. Some credit unions offer a short list of account types while others are full service institutions with options for loans and investments.

I wanted a credit union with competitive loan rates, which is why I joined my credit union. If you are looking to use a credit union for your banking needs, make sure you it has a location near home and good ATM access.

Bank or Credit Union?

This is a decision that you have to make for yourself. If you are happy with your bank and are not charged fees for your activity there, there is no reason to go through the hassle of moving. If you are upset with your bank, and large banks in general, and want to make the move, a credit union could be a great fit for you.

Please share your thoughts and experiences with credit unions in the comments.

Image by The Consumerist.

How to Choose a Credit Union is a post from: Narrow Bridge

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I know I just told you why it is such a good idea to keep every account at one bank. It is convenient and can save you money. However, it might not really be that great of an idea.

Less Control

While it is nice to have instant transfers and keep everything at one place, it is not always a good idea to keep everything at one place. You are not always in control of your accounts if you make a mistake.

In my time as a banker, I once had a customer that screwed up really bad. She didn’t make her credit card payment for months, she didn’t answer our calls, she didn’t answer her mail, and she ignored us. She owed a few thousand dollars on her card and we didn’t want to have to write it all off.

As one of those types of people who probably does not read what she signs, she probably did not notice that we had the right to take money from her checking or savings account to pay delinquent bills that she owed us. So we did.

She did not have a lot of money in her account, so on direct deposit day our credit department made a catch up payment on her behalf. All of a sudden, she had time to call us back.

Customer Service

If you have bad customer service from your credit card company, it is easy enough to move your account. If you have a bad experience at your bank, you only have one account there, so it is not that big of a deal.

If everything is at one bank, you are stuck. If you have bad service or an irreconcilable problem, you don’t have any recourse. You can always try a manager or try for a ‘good customer’ refund or discount, but you can’t really control anything.

Your Experiences?

Now that you have seen both the benefits of having everything at one bank and the drawbacks, what do you think? How do you have your accounts? What have your experiences been like? Please share in the comments.

Image by NCDOTcommunications.

Why You Should Not Keep Everything at One Bank is a post from: Narrow Bridge

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I have tried many different combinations of accounts in my life. At one point, my credit card, brokerage, checking, and savings were all at different places. At one point, everything was in one place. I found some big benefits to keeping everything in one place.

Save Time

The biggest benefit of having everything in one place is the time savings. Assuming you are using a site like Mint or Adaptu, you are already tracking everything in one place. Even if you do take advantage of one of those free services, there are other time savers to having things in one place.

For starters, you only need to have one customer service contact for a variety of issues. Changing your address? One form. Online bank statements? One website, often one statement. Need to pay your credit card and other bills? One bill pay site to visit.

There are other benefits to having everything in one place. It is less complicated. No need to worry about keeping track of a bank balance one place and a credit card somewhere else. It is all on one screen when you log in.

Need to open or change an account? You probably can save a lot of time on forms because your bank already has your information. Once you are a customer, adding new services is usually quick and painless.

You can also transfer money instantly between accounts, which is useful if you need to move money around quickly. Moving between banks can take three days with the ACH system.

Save Money

Keeping everything under one roof can also save you money. Many banks offer special deals to customers with multiple accounts.

No need to worry about inactivity fees at one bank while your main account is somewhere else.

You are less likely to miss a credit card payment if it is at the bank website you use every day.

Banks are more likely to waive fees for good customers. For example, I recently had to send a bank wire from my checking account. A wire fee is $20, but they waived it (without even asking) because I have a good relationship with the company.

No Reason to Keep Old Accounts

I have heard people talk about leaving a few bucks in an account “just to keep the account open” once they moved the majority of their business to another bank. Why? That is just another statement to watch, another fee to worry about, and a few bucks that you have just written off to your old bank.

If you don’t need an account anymore, close it. I only have accounts at one online bank and one brick and mortar credit union. There was no reason to leave my other accounts open in the age of new bank fees.

What Did I Miss?

If you can think of any other good reasons to consolidate to one financial institution, please share in the comments. If you ever reaped the rewards of consolidating, tell us your story.

Oh yeah, and if you disagree, you might check out my post on reasons to not keep all accounts at one bank.

Image by Finsec.

Why You Should Keep Everything at One Bank is a post from: Narrow Bridge

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If you are a small business owner or freelancer, you have undoubtedly been faced with deciding how to accept payments. While the term “cash is king” applies in certain situations, in the electronic age you have to be ready to take credit card too.

Mobile Payments – Square

I have a Square device for my Android phone that I can use to take payments from anyone at any time. Square sends you a free card reader and charges a fixed 2.75% fee with no monthly charge. After the transaction is approved, the cash is deposited into your account the very next day.

This is a great way to take payments either on the go or if you expect a small volume of payments. It also is designed for you to use with the physical card, so you need another option for online payments.

Online Payments – PayPal

PayPal is the most popular way for bloggers to be paid, so I am no stranger to the service. PayPal allows you to accept credit cards, payments from bank accounts, and payments from PayPal accounts in one place.

Your PayPal account acts like a bank account, so when the payment comes in you have to transfer the money to your bank to get it. PayPal has a complex fee structure, and it is not always cheap to use it for payments.

However, if you do a low volume of online income, PayPal is a trusted and safe way to take payments.

Also see: Serve (formerly Revolution Money Exchange)

In Person or Online – Major Banks

For brick and mortar businesses and high volume online businesses, going to a large bank will allow you to have a trusted service to accept your payments. These accounts generally have monthly fees and that make it less desirable for low volume. For large volumes, however, this is the way to go.

Any bank should be able to set you up with a merchant account. The fees are lower for higher deposit volumes, so be sure to do your research to decide if this is a good option for you.

Your Experience

If you run a business, how do you take electronic payments? What is the cheapest and easiest way to go? Please share your experiences in the comments.

Image by wei_yang.

How to Take Payments is a post from: Narrow Bridge

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I am nearing a vacation that is going to take me to cities with two foreign currencies. While my international travels to the Caribbean and Latin America allowed me to use my US dollars, I am not planning on the same luxury in England and the Eurozone.

Get Currency Before You Leave

If you have plenty of time before you leave, most large banks are able to order foreign currency for you. The exchange rates are generally reasonable, but the entire process is a hassle. You have to order it ahead of time, wait for the delivery, and go in person to pick it up.

If you are worried about getting to your destination and being stuck without an ability to exchange your money, this is a good option. Otherwise, I don’t think it is worth the time.

Bring Cash to Exchange

You can bring a big wad of your local currency and find a currency exchange when you land. This is easier because you only have to go to the bank once and most airports have foreign exchange services on site. Additionally, popular tourist cities have exchange businesses in popular areas so it is never too tough.

I used this method several times when traveling to Israel and Europe. The biggest benefit is the convenience factor. The biggest downside is the exchange rate. Most private exchange businesses make money on the transactions and charge high fees.

You can also find a local bank to do your exchange if you are traveling with a popular currency like the Euro or US Dollar. Banks generally have better rates but not all banks all you to exchange foreign currency.

ATMs

For my next trip, I am planning on the ATM route. If you are going to any developed country, you can find ATMs everywhere you go. ATMs will dispense the local currency and usually have very good exchange rates, the only thing you really have to worry about is the fees.

Lucky for me, my Schwab Bank ATM card does not charge any ATM fees and reimburses other bank’s fees automatically. With no fees, this is definitely the best option for me this time around.

I have used ATMs for foreign currency in Israel, Hungary, and Czech Republic with no problems.

Credit Cards

These days, Visa and MasterCard are taken almost everywhere you go. You can also find international retailers that take American Express, but it is not quite as common.

Depending on your card, using a credit card abroad might be better than cash. You are protected from fraud and loss and the card companies generally charge a competitive foreign exchange rate. The only worry is that some banks have a per transaction fee for the exchange.

Luckily for me, my British Airways Visa does not charge any fees, so I am planning to use it for the bulk of my purchases for this trip. Just be sure to read your credit card fee schedule before you go to make sure you don’t have any problems. Also, it is a good idea to call your card issuer to make sure they know you are out of the country and don’t shut down your card for fraud.

Your Thoughts

When you are traveling, what is your preferred way to pay? Do you use cash or card? How do you get the cash when you need it? Please share your thoughts in the comments.

Image by Images_of_Money.

Paying for Stuff Abroad is a post from: Narrow Bridge

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