4 Ways To Protect Your Money -- No Matter What's Going On With the Economy

The rules for protecting your money are the same in good times and bad.

The world may be in turmoil but there are plenty of ways to protect your money. No matter what's happening with the economy, you can create a plan that safeguards you against unexpected hits. Here's how.

1. Be on the lookout for scam artists

Scam artists are ever-present, but even more so when times get tough. The following steps represent fast, easy ways to stay atop your finances, even as crooks are trying to separate you from your money:

• Don't click on attachments or links sent by unknown sources. Some scammers include viruses that will scan your computer and send them everything they need -- all without you even realizing they've been snooping around your computer.
• Never give out your Social Security number, driver's license number, or other personal information. Even if someone calls claiming to be from your doctor's office or the IRS, don't fall for the old "We need your Social Security number to process this claim" trick.
• Check your bank account daily. It takes less than a minute but can help you spot anyone who might be slipping funds out of your account without your knowledge.
• Check your credit card accounts at least once a month. Even if you're not using them, check your accounts for changes. (It's easy to access them online.) The trick is to look for any activity that's not yours and report anything you find that's fishy.
• Use strong passwords and two-factor authentication for all online accounts. These steps can make it harder for someone to gain access to your information.
• Be careful about where you are when you access financial accounts. Suppose you log in to an account containing banking or credit card information on an unprotected wifi network or an unsecured device. You could leave yourself open to someone swiping your personal information.

2. Don't fall into the debt trap

When things go south (as they have a habit of doing), the people with the least debt typically have the easiest time getting through to the other side. If a job loss, sudden illness, or global pandemic could keep you from paying your bills, it may be due in part to your level of debt. Decide which bills you would like to jettison and follow a basic debt payoff plan until debt represents nothing but positive payment history on your credit report.

While you're in the planning phase, make sure you have enough put away in an emergency savings account to cover three to six months' worth of bills.

3. Keep a cool head, no matter what's happening with the stock market

Trying to figure out what's going to happen next with the stock market is like trying to figure out how long a rodeo cowboy will stay on the back of a bucking bronco. There can be signs when things are about to go wrong, but you can never be sure when it's going to happen.

Might the stock market take a deep dive? Almost certainly. The stock market acts a lot like a roller coaster, with periods of upward movement followed by expected drops. Dumping stocks from your brokerage account while the market is down may feel like the right thing to do, but it can cost you thousands. If we stick with the roller coaster metaphor, when your car nears the bottom of the track, you can pick up investments at a bargain price. Selling investments when values drop allows other investors to pick them up at a low cost. And just as the cars on a roller coaster turn a corner and begin climbing again after a steep drop, so does the stock market.

Let's look at what happens after a significant event -- like a recession. Depending on who you ask, there have been as many as 48 recessions in the U.S. since 1776. (Some economists dispute a few of those.) Still, we have a pretty good track record from which to learn. Historically, diversified portfolios have rebounded each time, ending up in a better place than they began.

That said, if you're too close to retirement to take a long-term approach to investing, waiting several years to regain losses is not for you. (We'll discuss this more in a moment.) For the rest of the world, investing should be a long game. Plan to leave your money alone for at least seven years. Looking back at the history of the market, it's easy to see that it's those who stuck with it who enjoyed gains.

4. Seek professional advice

A good financial counselor can be worth their weight in gold. They help fill gaps in your knowledge, tell you when it's time for concern, and help you stay the course. And, if you are among those who plan to retire soon, they'll help you invest in a way that shields your investments.

There are, undoubtedly, things you are great at. If personal finances are not one of them, that's OK. A good financial advisor can help you figure out what works best for your situation and give you confidence along the way.

The main takeaway is that you should keep a level head and a practical outlook when it comes to your finances. Just as in life, money matters won't always be rosy and problem-free. But if you take steps to protect your savings, you should be able to ride out any troubles without worry.