The threat of identity theft looms larger than ever before. Cybercriminals are constantly finding new ways to steal personal information and wreak havoc on your financial well-being. Protecting yourself from identity theft is an essential piece of a comprehensive financial plan. Here are ten inexpensive and effective things you should be doing to safeguard your identity:

1. Use Strong Passwords (and a password-managing app!)

One of the simplest yet most effective ways to protect yourself from identity theft is to create strong, unique passwords for all your online accounts. But doing so means juggling dozens of passwords. Consider using a reputable password manager to keep track of your passwords securely. Apple and Google offer their own smartphone and browser-based solutions, or consider a paid service like 1Password (my favorite) that will generate and securely store all of your sensitive info in an encrypted form.

Stop using a piece of paper in your desk drawer, a spreadsheet saved on your computer, or your grandchildren's names for your passwords! These are the first things an identity thief will try.

2. Enable Multi-Factor Authentication (MFA)

Multi-factor authentication adds an extra layer of security to your accounts. Even if a cybercriminal manages to obtain your password, they won't be able to access your accounts without the second factor, such as a text message code or fingerprint scan. Enable MFA wherever possible, especially for sensitive accounts like email, banking, and social media.

3. Watch Out for Phishing Scams

Phishing scams involve cybercriminals posing as legitimate entities to trick you into revealing personal information. Be cautious of unsolicited emails, text messages, or phone calls asking for sensitive data. Verify the sender's identity before responding or clicking on any links. This is one of the most common tactics employed by cybercriminals because it’s so effective, especially on the unvigilant, children, and the elderly.

4. Regularly Monitor Financial Statements

Frequently review your bank, credit card, and other financial statements for any unusual activity. If you spot any unauthorized transactions, report them to your financial institution immediately. Early detection can prevent further damage.

5. Regularly Check Your Credit Report

Obtain a free copy of your credit report from each of the major credit bureaus annually. Review the report for any inaccuracies or suspicious accounts. This can help you catch any unauthorized activity early and take appropriate action. Get your free reports from www.annualcreditreport.com.

6. Freeze Your Credit

If you know that your information is already compromised, or fear that it could be (which should cover everyone), the best thing to do is to freeze your credit. By taking this step, the credit bureaus will not release your credit history to anyone, which should prevent a fraudster from attempting to open an account in your name or apply for a loan. This must be done at each of the three major credit bureaus. It’s free, and you can unfreeze your credit at any time if you need to apply for credit yourself or open a new financial account. Check out this article for detailed instructions: https://www.nerdwallet.com/article/finance/how-to-freeze-credit

7. Create an IRS PIN Number

A common avenue for identity thieves to get money is to file a fraudulent tax return in your name. Creating an Identity Protection PIN is the best way to prevent this from happening. To set this up, go to: https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

8. Be Cautious of Public Sharing

Be cautious when sharing personal information on social media platforms. Cybercriminals can use seemingly harmless information to know when you’re out of town, what valuables you own, gather information about friends and family members, or guess your passwords and security questions.

9. Use Secure Networks

Avoid using public Wi-Fi networks for activities involving sensitive information, such as online banking or shopping. Public networks are often less secure and can be easily intercepted by hackers. If necessary, use a virtual private network (VPN) to encrypt your internet connection. Check out Mullvad VPN and TunnelBear as two recommended VPN options.

10. Shred Important Documents

Before disposing of physical documents containing personal information, such as bank statements or medical records, use a cross-cut shredder to make the information unreadable. Dumpster diving is a tactic identity thieves use to collect personal data from discarded documents. Go paperless whenever possible.

By following these ten effective measures, you can significantly reduce the risk of falling victim to identity theft. Stay vigilant, stay informed, and stay secure.