Did you write a check this month? If you did, you are probably the exception to the rule. We are increasingly becoming a checkless society. A recent survey by KeyBank showed that almost one-fifth of their customers don’t ever write a check and nearly half write only one or two checks per month.
The numbers have been going down steadily. In 2000, Americans used checks for 40 billion transactions, but only half that many in 2012, according to the Federal Reserve. On the other side, the number of debit card transactions increased from less than 10 billion to more than 45 billion.
At the same time, credit card transactions are increasing. The Nilson Report showed that in the period between 2008 and 2016, there has been an increase of 104.5 percent in credit card transactions and the use of checks has gone down 62 percent. With this shift in the way we spend, it becomes necessary to more carefully track our expenditures and check our accounts regularly, particularly with the number of security breaches that have occurred.
We are changing the way we handle our finances. That means we have to change how we handle our financial records. The days of a shoebox with our tax records are long gone. Even printing out the credit card and bank statements and the using a highlighter is somewhat outdated. Let’s take a look this week at how to keep records. In most cases, electronic means are the best way.
Our usual first line of defense is putting these records on our home computers. However, these are susceptible to hardware crashes, virus attacks, and natural or man-made disasters. It’s clear we need a second source for our backups.
Web-based storage services are available to both multimillion-dollar companies and individuals. These sites can help you store, back up, organize, access and share financial records. Some of the easiest to use and inexpensive are Backblaze, Carbonite and Xdrive, which can keep records for as little as $5 per month. Some even offer a small amount of data for free. Ask your bank if it has a service. Wells Fargo has a service that can store your records for a small monthly fee. These services offer the equivalent of an online safety deposit box. Concerns for many of us include security and getting your information. Any time you put your information into any kind of system, you are risking information getting lost or hacked. Connectivity can be challenge, so allow plenty of time if you need records.
In evaluating different services, be sure to ask how much storage you will receive and how many times a month you can access the information before you are charged an additional fee.
You could store your records on a USB flash drive. They can hold up to 128 gigabytes of data, far more than any of us need. They are durable, convenient, inexpensive and secure if password-protected. It is no surprise that flash drives are the storage method of choice. However, they are far more likely to be lost or stolen than almost any other method of storage.
External hard drives are another popular method of storing records. They are externally connected to your computer and can be set up for a quick backup. But like thumb drives, they can be damaged or stolen.
Even though CDs are almost dinosaurs, they are a great way to do a secondary backup. They are cheap and easily used, but can be scratched, broken, or lost. One major drawback is the amount of the storage, which is far less than a flash drive. Again, they are great as a second backup, but should not be used for primary backup.
Electronic records can make your data storage a snap. Just be sure that these important records are carefully backed up with some type of method.