As our lives become more intertwined with the Internet it may be only a matter of time before all of our important data is stored in the cloud of bits and bytes. Most people are well on their way with online banking and bill paying, e-tax filing, email, document storage vaults, Social Security information, and soon we will be making payments using our smart phones. Businesses and individuals alike are moving away from metal file cabinets to computer servers, for convenience and better data management. Is it safe? Technically, it could be a lot safer than storing physical documents. But, there are some things you should consider with online data storage.

Information technology is rapidly evolving. The use of data encryption makes it virtually impossible for your data to be stolen from the cloud. However, the fact of the matter is that, when data is stored in the online, you no longer control it.You may sign a privacy agreement with a vendor, but they generally aren’t responsible for your information should their servers go down, or your data gets lost. Information technology has come a long way but it’s still has some reliability issues.

You should be able to rest easy with your data online, but it is highly recommended that you still keep physical records of your most important legal and financial information. Ideally, your critical financial data should be backed up to a couple of alternative storage devices such as a CD, USB drive, or a hard drive with at least on being stored in a separate, secure location. Online recordkeeping is here to stay, but, in the end, it is still you are responsible for its security.

By: Timothy James.