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protection that works

Protecting Money

You have to pay people to run a business - your landlord, your tomato guy, the IRS. There are a million ways to send them money, and ten million ways for other people to steal it. You can prevent most of them with some simple ideas:

Have only a couple ways to pay: Decide on a couple good ways to pay people, then do a good job of protecting them. Each fix below is a lot more work if you have 12 cards and accounts to fix. Check our payment roundup for recommendations.

Use different accounts for spending type: Most payments you make are either recurring and predictable, or expensive one-offs. Consider using two ways of paying, one for each kind. Put tight control on the recurring account – the monthly spend should be predictable, so keep barely enough money to cover what you expect. Credit cards are usually the best way to pay these expenses. If you have regular predictable expenses that are too big to put on a card, use a checking account, and set it up so that only your regular vendors can get paid from it. Use the one-off account as little as possible and make it harder to use.

Regularly review charges: Look at your payments regularly. For a credit card, this can be once a quarter because you can usually dispute charges up to 6 months later. For a checking account or wire transfer, if you don’t catch fraud within 24 hours, it’s gone. You can make this easier by getting text alerts about any transaction on your high-value account, and set up a list of vendors who can bill you on the predictable checking account.

Make it harder to log in: Lots of accounts let you choose extra hoops you need to jump through to prove that you are you. Setting these up makes it much harder for jerks to break into your accounts. See our login guide for the best options.

Password manager: Password managers are one of the easiest ways of stopping all sorts of badness. While they aren’t a good choice for secret agents and government officials, they make good security much easier for normal people. Use it to create long, random passwords that no one could ever guess, and every time you go to that website again, it will fill in that password for you. Read the password manager guide.

Use good services: There’s a huge difference between how well companies protect you. Unfortunately, everyone claims to care a lot about your security, and it’s usually hard to tell if they’re just blowing smoke. I've highlighted a couple companies known for excellent security in the online services guide.

Use safe devices: It sounds crazy, but paying people from your home computer is safer than doing it from a public one at your library or even your cellphone. Your home computer may not be the safest either: Does your teenager use it at night to play games or go to sketchy places on the internet? Consider buying a separate computer just for your business. It doesn’t have to be fancy: Chromebooks start at $200, last a long time, and are safer than anything.

Be consistent: decide on a way to pay people and stick with it. Then take the time to set them up in whatever system you’ll use to pay them. Did you decide on ACH for your prototype machinist? Then add their bank account number to your approved list for your checking account. Did you decide on wire transfer because you get a substantial discount when buying direct from your coconut supplier in Togo? Then set them up in your Transferwise account. If they ever tell you they want to be paid in a new way, be extra sure you’re really talking to the right person and not a scammer that broke into their email. This protects them and you.

Protect your money

When your plan is done, it's time to do it.


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