Protect Your Money Right Now You're on your way from work when you remembered that you needed to pick up milk. You spot a convenience store and quickly run it. Because you're only...

You're on your way from work when you remembered that you needed to pick up milk. You spot a convenience store and quickly run it. Because you're only going to be a couple of minutes, you leave your car unlocked.

When you jump back in, you immediately realize that your phone and Ray-Bans that you left on the driver seat are gone. Obviously, they didn't just grow legs and walk away. Some nefarious individual snatched these belongings in just the blink of an eye.

Now, you have to buy a new smartphone and a pair of shades. While it might not set you back that much, it's still an unnecessary and time-consuming cost if you did just one little thing — locked your doors.

It's so much easier to protect your items now than rely on your strength to replace things.

For most of us, we take this precaution when it comes to leaving our vehicle or home. But, do you also do this when it comes to your hard-earned money? If not, here are some of the ways to minimize risks and ensure that your money stays where it belongs.

Protect Your Money Right Now — REC

Unless you're a fan of the Spanish horror film, Rec — REC is usually the abbreviation of recreation. In this case, however, REC is short for reduce, eliminate, and consolidate. And, considering that the average Americans carrying a personal debt of $90,460. Reducing is the first step to take to minimize any financial risk.

While it may seem harmless, being bogged down by credit cards, personal and business loans, and medical debt takes a huge chunk out of your monthly. That can be a problem for several reasons.

For starters, if you're only paying the minimum amount due, your monthly payments are just going to interest. That can slow down your goal of paying off the balance. Even worse, if you're on a tight budget, that means you can not allocate as much to a savings or retirement account.

But that's not all. Let's say that you fall behind on your payments. In addition to negatively impacting your credit score, that could result in:

• Persistent calls from debt collectors
• Having your wages garnished
• Being sued or having a judgment placed on you
• Having your vehicle repossessed
• Losing your home to foreclosure or being evicted if renting
• Bankruptcy

Suffice to say that will put a toll on your mental and physical health. Moreover, that could affect your work performance and put a strain on your relationships.

As such, develop a way to reduce and eliminate your debt. Whether if that's living frugally or picking up a side gig, this needs to be a priority. Another option would be to consolidate your debt into a lower-interest loan to make monthly payments more manageable and faster to pay down.

Increase your cash flow.

As previously mentioned, a side gig is a tried and true technique to chip away at your debt. Another advantage, though, is that you can also put this extra money towards savings. While that may not be on the top of your mind right now, it does give you a buffer just in case a violate economy dries up your primary income source.

Other ways to generate multiple income streams would be starting a side hustle that can blossom into your own business or earn a passive income.

If you need some ideas, I recommend you check out the previous Due articles to get the ball rolling:

• 101 Side Business Ideas That Will Make You an Extra $500 Next Month
• How to Keep a Side Hustle And a Day Job Simultaneously
• 101 Passive Business and Income Ideas
• Adding Income Streams When You're Self-Employed

Have an emergency fund.

Nearly 25% of Americans have no emergency savings. Why's that a big deal? Because during uncertain and turbulent times, such as during the COVID-19 pandemic, this provides a cushion from unexpected job loss, medical expense, or home and auto repairs.

If you don't have this money, you may have to use a credit card that could put you into debt. For others, that could mean prolonging something until it becomes much worse. Think of it like a leaky faucet that eventually causes a disastrous pipe burst.

Ideally, you should have enough set aside to cover between 3 to 6 months of basic living expenses in your emergency fund. To get started, though, a couple hundred to a thousand dollars should be your target. And, you can make that possible by getting back on unnecessary expenses or finding extra money, such as a part-time job.

Keep it stored in the right places.

There's nothing wrong with having some cash on hand. But you're probably not going to having thousands of dollars stashed in your mattress. I mean, if you did, you should definitely have that in a safe to protect it from fire or theft.

For most of us, keeping your money in a financial institution is excellent. After all, if it's in an FDIC-insured bank or savings association, then you're covered up to $250,000. But, if you have more than that or concerned about fluctuating markets, you might also want to look into:

• Federal bonds are typically risk-free security.
• Real estate, either renting or flipping, can be risky. However, they can provide a financial upside.
• Precious metals since when the market drops, the increase in value.
• Luxury assets, such as artwork.
• Cryptocurrencies present a high-risk, high-reward opportunity.
• Investing in an existing business.
• Mutual funds.

The idea here is to diversify your investments. This way, if one asset loses value, you have others to offset the loss. And, speaking of your portfolio, make sure that you monitor and reassess regularly to make sure that it's diversified and still meeting your financial goals.

Avoid withdraws.

Let's say that you had an unforeseen medical expense. That would certainly warrant you to dip into your emergency fund. Wanting to purchase a PS5 would not.

When it comes to your savings, avoid tapping into them unless it's 100% necessary. If you do, make a plan to replenish it as soon as possible, even if it's just putting $50 back into the fund each month until it's refilled.

Additionally, you should avoid early withdrawals from your retirement accounts since they can prevent you from having a successful retirement. "That goes double when the market is down since you suffer not only from having a lower balance in the account but also from selling and not enjoying the future rebound," states James Royal for Bankrate. "On top of all of that, theIRS may hit you with an early withdrawal penalty."

"One alternative is to take a loan from your 401(k), if the administrator offers it, and not all do," he adds. "You'll have to pay back the loan, but at least you can avoid the income tax and a penalty on a withdrawal. A loan is generally not a great solution because it may limit future contributions that you otherwise would have made, and you're repaying the loan with after-tax money from your paycheck."

The best solution? Avoid taking out any money. "Your 401(k) account is about the last thing you should tap for money, especially for any expense that you can delay," says Royal.

Shield your assets.

"If you don't properly protect your assets, which you worked long and hard to accumulate, they can be lost very quickly in a lawsuit, bankruptcy, or if creditors come to collect," writes George D. Lambert for Investopedia. "It's important to be aware of the laws that can shield certain types of assets and the measures you can take to protect your savings."

• Protection caps for IRAs. Both "traditional and Roth individual retirement accounts (IRAs) have an inflation-adjusted protection cap of $1 million against bankruptcy proceedings.," explains Lambert. "The bankruptcy court has the discretion to increase this cap in the interest of justice." Also, "amounts rolled over from qualified plans, such as 403(b) and 457 plans, have unlimited protection" when applied to bankruptcy and not judgments.
• Qualified retirement plans. SEP IRAs, SIMPLE IRAs, defined-benefit and defined-contribution plans, 403(b) and 457 plans, and governmental or church plans have unlimited protection from bankruptcy. But, they may not be under qualified domestic relations orders (QDRO).
• Homesteads. Check your state's protections since this varies from state to state.
• Annuities and life insurance. These also vary from state to state.

To keep your assets safe, you might want to look into asset protection trusts, accounts-receivable financing, stripped-out equity, and family limited partnerships. Other recommendations would be to:

• Transfer your assets to your spouse's name.
• Contribute more money to your employer-sponsored retirement plan.
• Buy an umbrella insurance policy "that protects you from personal injury claims above the standard coverage offered by your home and auto policies."
• Keep your business and personal assets and finances separated.

Don't fall victim to cyber threats.

Every 39 seconds. That's how often hackers attack. To make matters worse, following COVID-19, the FBI reports that there has been a 300% increase in cybercrimes.

As such, cybersecurity must be a top concern for business owners and individuals. If not, this can be a costly and frustrating experience that could set you back financially for years. Thankfully, there are simple ways to secure your finances online.

• Always shred documents that include your name, social security number, address, birth date, or bank account numbers.
• Create unique passwords for all of your accounts online. You can use a password manager if you can't remember them all.
• Invest in anti-virus and malware software.
• Keep all of your apps, software, and operating systems up-to-date.
• When in public, use a VPN instead of public WiFi.
• Lock your devices if they're unattended.
• Never share important information with anyone unless it was solicited.
• Frequently check your bank statements and credit report to track your activity. Better yet, sign up for account alerts.

Keep on learning.

Finally, keep on learning about finances. You don't need to become an expert. But, this gives you the chance to become more knowledgeable in the basics and stay on top of the latest trends. Some ideas would be to read books, subscribe to newsletters, listen to podcasts, or take an online course.

And, don't forget to schedule appointments with those who are taking care of your money. For example, to ensure that your retirement plans are on track, you should meet with your financial advisor once a year.

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