Six Steps To Avoid Financial Heartbreak

Take these six easy steps NOW to ensure you don't suffer financially if you're mugged.

A friend of mind was mugged just before Christmas. She was left bruised and terrified. Tragically, she was also left over £1,000 out of pocket because she hadn't protected her finances against what happened.

I was prompted to write this article because I think many of us are in the same boat. We don't want to think about such a terrible thing happening - so we don't prepare for it.

Recent research by MORE TH>N revealed that one in ten of us has suffered a bag theft. Judging by what's happened to people I know, I think that figure could be even higher.

So - it really is crucial you take certain steps to ensure that what happened to my friend doesn't happen to you.

1) Protect your plastic

Consider getting protection for your credit and debit cards. This will mean that if your cards are stolen, they'll all be stopped (and re-ordered) quickly and efficiently.

Some policies will also pay out towards the cost of your actual handbag, and may even get your locks changed for free.

A good card protection policy will often cover everyone living in that household. See if your partner of a member of your family already has one that you can be added to.

My fellow writer Donna Werbner recently described her experience using card protection in this blog, written after her handbag was stolen.

Just make sure you know exactly how to claim on your policy should you need to - and also make sure that phone number isn't only in your handbag!

Finally, if at all possible, leave one of your cards at home. That way, you'll still have access to money if your bag is pinched.

2) Ensure you're insured

First of all, make sure your home insurance is up to scratch. If the thief steals your keys and knows where you live (for example, from your driving licence in your handbag), the alternative doesn't bear thinking about.

If your keys are stolen, you'll need to get the locks changed. It's crucial your policy covers this too, as it can cost a fortune, particularly if you live in a big block of flats and everyone needs new keys to the external door.

Next, check that your home insurance covers your personal possessions (like your glasses or your iPod) when they're outside your home.

This is a really big deal, because the average UK adult now carries £972 worth of belongings around with them. Read this article to find out more.

Finally, make a list (kept in the house) of all the things you usually carry in your handbag. That way, you won't forget anything if you do have to make a claim.

3) Protect your Phone

Is your phone insured? It might be covered by your home insurance or attached to your bank account, so don't take out pricey specialist insurance if you can avoid it.

Read this article, by my Foolish colleague Neil Faulkner, to find out where you can get the best deal on phone insurance.

Even if your phone is covered, make sure you write all the numbers down and keep your list somewhere safe.

And have a look at this useful Home Office website, aimed at reducing the impact of mobile phone theft. Noting down a few details now will make it much easier for the phone to be traced and blocked.

4) Take precautions

Most of us try to avoid carrying large amounts of cash around. However, what about all that `money' you've forgotten about?

If you have any gift vouchers or credit notes, take them out of your bag until you actually plan to spend them. Many vouchers can't be cancelled if they're stolen - so effectively, it's like losing cash.

Also think about the money you have stored on plastic, like international phone cards - again, don't carry them around unless you have to.

Londoners with Oyster cards should get them registered immediately. If a registered Oyster card is stolen, you can claim a refund and get it replaced free of charge.

5) Be sensible

Just using your common sense could reduce your financial vulnerability if you're mugged. Try to spread your valuables about your person (phone in one pocket, wallet in another) so you don't lose the whole lot if your bag is pinched.

It's also a good idea to leave a spare set of keys with someone you trust but who doesn't live in your house. This should avoid you having to pay a locksmith to gain entry to your property if your keys are stolen.

6) Safety first

If someone is threatening you with a knife, you shouldn't fight back just to protect your finances. Get it all sorted now and if the worst happens, you can focus on what's most important - your safety.