You may be reading this and wondering, “why is he talking about password management, when the subject of the blog is primarily debt elimination, budgeting and personal finance?”
And the simple answer is that part of debt elimination, budgeting and personal finance in general is this whole idea of looking at your finances holistically.
Whether you've thought about it this way or not, identity and data-security are integral to this holistic view.
There is a precious value in your financial/online identity that can all-too-easily be stolen.
Another way of putting it is that, part of this financial peace equation is the protecting of what's left of your privacy in the online realm. This would naturally include your identity.
Please allow me to explain.
Protecting your identity really starts with protecting all the accounts you access online.
The reality is that having strong passwords for your tens (or hundreds in my case) of online accounts becomes a very real, serious and somewhat daunting thing to consider.
My identity was stolen back in 2011 and used to file a fraudulent tax return. Imagine my learning about this by getting a letter from the Georgia Tax Tribunal!
Nightmare doesn't even begin to explain it. The sense of violation and the ensuing chaos of having to perform the "clean up" is just beyond description.
It feels kinda like your house got broken into and I genuinely hope you never have to go through it.
I'll go into the ridiculous details of the number of hours it took to restore my identity and the effort it took exonerate me from any tax liability with the authorities in another post.
I just bring this up to illustrate the point that identity theft is not really an "if", it's a "when" at this point (remember, even Equifax has been hacked).
So, you want to make sure you 1) have identity theft insurance and 2) that you're doing everything humanly possible to protect your identity online.
Number two is where Dashlane comes in.
Do you "get down" with Pinterest? Would you consider pinning this to your favorite board?
Have you ever tried to count how many accounts you have that require a username and password? I would challenge you to pause and just start making a list.
It’s probably going to take longer than you think. It actually took me months to write everything down once I decided I was going to tackle this whole password thingy.
I hadn’t really considered the number of online accounts I had until I started putting together our emergency file for my wife to have access to everything in case something ever happened to me.
Part of this process is looking at all of the online accounts you have, writing down your usernames, passwords, account numbers, PINs, etc.
Man, I could not believe that I had over 100 accounts on the spreadsheet I created for this exercise.
The process was daunting, overwhelming and mentally exhausting and literally took months of “bite sized” sessions to: 1) try and remember all of my accounts and then 2) to capture, organize and categorize all of those usernames, passwords, account numbers, etc. on to one central spreadsheet that I kept securely put away.
I understand why you probably haven't done it yet, believe me.
THEN, when I had to change a password (which you should do often by the way), I would have to dig out that spreadsheet and update it.
The whole process felt like a death by a thousand paper cuts. UGH!!
There's got to be a better way, right?!
Not too long after that I started researching password managers and I tried a couple of different ones and did a TON of research.
At the culmination of all my research, I landed on a product called Dashlane about two years ago.
I've been using Dashlane for over 3 years now and I don't know what I'd do without it now.
Dashlane was an excellent point of entry into this process because:
1) It's super easy to use.
2) It's free (there is also a premium version that allows you to sync across devices).
3) It's secure (in all my research, I learned that their competitor, LastPass has been hacked, so I steered away from them).
4) I'm able to use it for both my personal as well as work passwords (which number well over 200 now!).
So, what is Dashlane? Essentially, it is a password manager app and secure digital wallet. The app is available on Mac, PC, iOS and Android.
Like I mentioned earlier, the app's premium version enables users to securely sync their data between an unlimited number of devices on all platforms, but you can use the free version and get by just fine.
Honestly, it’s fantastic and, at this point I don’t know how I ever lived without it...
Whatever you do, you've got to start randomizing and storing your passwords systematically. Hacks and ID theft are only becoming more prevalent.
On second thought, I do know how I lived without it… Risky!!
Before Dashlane, I was reusing the same passwords for multiple sites and not changing them very often (actually hardly at all except for the “really important” ones like banks and other financial institutions).
I’m sure many of you reading this are doing the same thing and may be feeling a little vulnerable right now.
I mean think about it, isn’t it just unbelievable how many online accounts we have nowadays?
How in the world can we come up with unique and complex passwords for each account? I know I was really sloppy in that area of my life before I started using Dashlane.
I wound up liking the free version of Dashlane so much that I upgraded to the Premium version which again, allows you to sync the app (that contains all of your usernames, passwords, etc.) among many devices (i.e. multiple computers, multiple phones).
So, both my wife's and my computers, our smartphones and my work computer are all synced.
I love it because, whereas I used to have to not only keep track of over a hundred (again, now well over 200!) accounts, passwords, usernames and PINS, now I have all of that information in one solid, password protected, 2 factor authenticated (2FA or MFA for “muliti-factor") system that has a very strong reputation and great security track record (Dashlane).
Yes, I'll take the Matrix-level password please!
Another great feature of Dashlane is the ability to allow the application to generate very complex passwords with its “password generator” feature.
So, you can use Dashlane generate varying levels of complex passwords for your accounts that you would never be able to remember.
The password generator inside of Dashlane can generate password up to 28 characters long with the following options:
These would be passwords that would basically be impossible for you to memorize, particularly if you had to try and memorize multiples of them.
Now, you don’t have to remember them because Dashlane is your powerful “external password memory”.
The obvious question: “But is it secure?”
The truth of the matter is that everything digital can be hacked, yes even Dashlane. Hacking is just a reality we all have to live with in the digital age.
However, the wisdom in using a service like Dashlane is that you’re adding more layers of complexity and inconvenience to a would-be hacker and therefore likely causing that person or entity to move on to "lower hanging fruit”.
Speaking of low hanging fruit, there is plenty I assure you. Just think about how many people still use simple words like “password” or “admin” as their passwords. Then think about how often they reuse those as passwords for multiple accounts. That’s called low hanging fruit for would-be hackers!
In other words, employing a system like Dashlane is not going to guarantee that you won’t be compromised, but it does give you a rather large buffer between you and the hackers, particularly if you are vigilant about changing your Dashlane password and guarding your two factor authentication device (i.e. typically phone, or other 2FA device).
For more information about their security protocols, you can check out this article:
After having used both LastPass and Dashlane, I think Dashlane is the clear winner.
Like I mentioned earlier, the question of identity theft and data breaches are now not a matter of “if” but a matter of “when”. Equifax, Yahoo, Ebay, Target are just some examples of major organizations that have been hacked.
There are just so many ways criminals can get into these systems and it seems that so many organizations that have our data are so far behind the curve when it comes to data security.
Unfortunately, there’s not a lot we can do about the part that’s out of our control.
What we can do is focus on the part that is in our control.
Again, you must 1) have Identity Theft Insurance (the purpose of which is really to cover the administrative burdens of time and the expense incurred to recover your identity) for the emerging inevitability of ID theft and 2) make sure that your Username/Password footprint is covered by using constantly changing and complex passwords for your online accounts.
I believe the very best way to do that right now is to use Dashlane.
Having been victimized by ID theft in 2011, I can tell you it’s not fun.
Fortunately, I did have an ID theft insurance policy in place, but even then it was a terrifying and extremely cumbersome experience.
So particularly because of that experience, I’m solidly in the camp of vigilance, maybe even hyper-vigilance when it comes to protecting my and my family’s data.
Dashlane is now a big part of my strategy and I think you should seriously consider it as well.
So this is my challenge, at the very least start making a list of all the websites, banks, social media platforms that you have accounts with and start making a record of your usernames and passwords.
Just start your list. I really think you'll be surprised.
You might be doing this for weeks or months. Every time I think I have them all, I remember another or even have to create another.
If you’re overwhelmed, don’t worry I was too. That’s when you might think about using something like Dashlane to help you reduce the headache you’ll soon find you’re engaged in.
Actually, Dashlane recently sent me a free trial of Dashlane Premium for up to 3 of my friends. So, if you want to check out how powerful and easy to use Dashlane is, give it a whirl for 3 months.
Just follow the instructions here to claim your free trial.
Link not working properly? Copy your promotion code 'DDFZFR6ERB8O' and paste it here.
Be sure to let us know how it’s going and share your struggles and best practices in the comments below.
So, now that we've talked about securing your accounts and identity, let's talk about securing your finances.
0. Stop All Retirement Investing (Until Step 4)2. Starter Emergency Fund of $10003. Eliminate Debts Smallest To Largest (a.k.a The Debt Snowball)4. Full Emergency Fund of 3-6+ Months’ Expenses5. Invest A Minimum of 15% Income Into Retirement Accounts (and increase savings rate to 50%+ if possible)6. College Funding (if applicable)7. Pay Off The Home Mortgage8. Build Wealth, Serve, Be Ridiculously Generous And Go FI (Financial Independence)!