Back up your life!

Take these steps to ensure you don't lose anything valuable, should tragedy strike!

As you read this article, you're staring at a goldmine. I'm talking about your PC or Mac.

If you plan your finances on your computer, its hard disk probably contains a host of info on your bank accounts, stocks and shares, savings accounts, insurance plans, pensions, Premium Bond numbers and so on.

It may also be a treasure chest of personal data, such as downloaded music and videos, or your digital photo collection.

This is valuable stuff and also highly vulnerable. A computer crash, simple carelessness, or more serious hazards such as fire, flood and burglary could wipe it out in moments.

You can replace a basic laptop or desktop for less than £500 these days, but the information contained on it could have far greater financial or sentimental value.

Any paper-based financial data, such as share certificates and insurance policy documents, will also need protecting in case they go astray.

With so much at stake, you need to arrange a little back-up.

Gone for a song

So what's on your PC? I have around 3,800 songs on iTunes, including around £700 worth of downloaded tracks that I can't replace except by downloading them again.

If you lose your digital music collection, don't bank on your insurer coughing up as they would do if you, say, lost your CD collection in a fire.

Out of 46 insurers contacted by Which? Computing, only 22 offered protection for music and other digital downloads, and then only from standard perils such as fire, theft or flood.

Most treat any corrupted data on a hard drive or MP3 player as wear-and-tear, and reject any claim.

My PC also contains years of financial articles and audited accounts, and thousands of family photos that my girlfriend would never forgive me for losing (except the unflattering ones).

Costly errors

I have endured two serious computer crashes, once after throwing a glass of water over my laptop, and once after recklessly deciding to upgrade my operating system.

In both cases, my PC was buried with full honours, but only after my local computer shop mercifully salvaged all the data from the hard disk.

If I had backed up my data, I would have saved a lot of time and worry, and about £150 a pop.

I haven't actually lost a laptop yet, but plenty of people have (not all of them working for the Ministry of Defence). If that happens, you have no hard disk to retrieve your personal data from.

You might be able to piece together most of your pensions and other policies, but it will take time, and you could easily miss something valuable.

Plug. Save. Unplug

I've since got wise, and now I back up my electronic valuables on an external hard disk drive.

I bought the Western Digital My Book Essential, which currently retails on Amazon from around £50. It offers 500GB of storage space, which is enough for me (you can buy more).

Every so often, I plug it into my USB hub and suck up everything of value.

And I do my best to tuck it away in a separate place to my computer, so it doesn't get carried off by flood or thieves.

If you don't store memory-heavy music or digital piccies on your computer, you could save yourself £50 and transfer any valuable files to a blank CD or DVD instead.

Related how-to guide

Kit out your PC for free

Getting your PC up to scratch doesn't have to break the bank - in fact it needn't cost you a penny!

See the guide

Or you could post digital pictures online for safekeeping, on a free website such as Snapfish. You can also get free back-up software.

Theft! Danger!

The danger is backing up your data is that you now offer thieves two tempting targets, who could use the data for crooked purposes such as making a fraudulent credit application in your name, or even blackmail.

And if you have stored your online passwords somewhere on your computer or back-up disks, they could help themselves to the contents of your bank account.

So you should also be very careful about the personal or financial data you actually keep on your PC.

And when you have done with your computer, don't flog it off on eBay or toss it at the local tip, it could be a goldmine for ID thieves.

Even wiping your hard drive clean may not be enough, because criminals are adept at retrieving deleted data. Tech experts claim that smashing it to pieces with a hammer is the only absolutely safe solution.

Read 14 ways to protect your privacy.

Good on paper

I have also rounded up all the policy numbers and contact details for every bank account, investment, pension plan and insurance policy I own, plus my tax reference number, my accountant's and solicitor's phone numbers, and a copy of my Will, and handed it all to a trusted relative for safekeeping.

Because if I die suddenly, my girlfriend wouldn't know how to piece together all my various financial plans, and she and our daughter would miss out on tens or even hundreds of thousands of pounds (if you include the life cover).

It's worth taking an hour or two to back up your life, because if something goes wrong, it could take days, weeks or even months to reassemble everything again.

If you ever do.

More: The sneaky gadget that could save you money | How to pick the right life insurance policy