Readers would be aware of the significance of backing up their data. Personal finance is as much about saving and investing as it is about keeping proper records of progress or regress. Maintaining an excellent budget and/or net worth spreadsheet is only useful if it is available when needed. There are several files that may be of interest to readers such as spreadsheets, text documents, photos, audio files, videos, etc. The ways described below can be used for backing up any file that is deemed important enough to be preserved.

Important Note: a backup is valuable only when the same data is stored in more than one location. If one copies the data onto the backup medium and deletes the data from the original location, then it does not constitute a backup.

This post is about cloud storage but I’ll include some basic offline backup ideas too.

Offline Storage

If the data to be backed up is minimal, one could store the files on a flash drive (also known as USB, jump or thumb drive). It should be a matter of copying and pasting (or dragging and dropping) the necessary files onto the flash drive medium. For users with larger volumes of data, external hard drives (going upto 1 TB or more) would serve the same purpose. As you would have noted, the above solution involves significant user intervention. The user would have to remember to backup their files periodically and I do not think that many people would have the time for such a task. To avoid this hassle, one could use the powerful rsync command to automatically synchronize data to a web server but detailing the process is beyond the scope of this article. Check out this Engadget tutorial if you are interested.

Online (Cloud) Storage

For the uninitiated, cloud storage refers to saving your files on central servers maintained by a third party in a remote location. Such services are offered by many companies; generally, the free option will give you limited storage space, say 2GB, but if you need more, then there are paid plans offered to satisfy data-heavy users.

My cloud storage solution of choice is Dropbox, which is a cross-platform (Windows, Mac, Linux) client. I understand that people may be concerned with privacy issues that may crop up by storing your personal files on servers offered by some unknown company; read their terms of service and privacy policy to learn more about the operation.

How Does Dropbox Work?

When installed, the Dropbox folder will reside on your computer. Any file(s) and/or folder(s) placed inside the Dropbox folder will be synced to the Dropbox servers through a secure connection. You can access the files on your computer as usual but the same files will be synced to Dropbox to offer you backup. During installation, you will be asked to create an account. After entering the required info (it is straightforward), you will be asked to choose a Dropbox size based on your need (2GB – Free, 50GB – $9.99/month or 100GB – $19.99/month). There is a short tour before completion of the installation but you can skip it if you so wish. By default, the Dropbox folder is located in My Documents for Windows users and Home folder for Linux users (if any Mac users utilize Dropbox, please leave a comment about the default location, so that the post can be updated). There is also an option to change your default location during the final stage of the installation process.

After installation, when you navigate to the Dropbox folder [Dropbox sits on your taskbar (Windows) or Gnome Panel (Linux) for quick access; double click to open the Dropbox folder from there or right click on the icon for more options], you will see a “Getting Started” file and two folders named Photos and Public (this is for a Windows installation; folder names may vary on other platforms).

You can create your own folders inside the Dropbox folder for easier reference. Any file in the Public folder can be shared with others. Right-click on the file in the Public folder that you want to share and choose Dropbox -> Copy Public Link; this copies the Internet link for your file, so that you can paste it somewhere else. This file can now be shared with others by just pasting the link into e-mails, instant message conversations, blog posts, etc.

Other Features of Dropbox

One can also install Dropbox on multiple computers at home and work and by using the same Dropbox account, all files will be available for access both at home and work. In addition, if you are at a friend’s house or at a public terminal where you cannot install the Dropbox client or need it for a one-time use, then you can go to, log into your account and view files from all the computers linked to your account. You can download the file(s) needed from there and also upload files through the web browser but it is a slow process if you have multiple files.

Files deleted from the Dropbox folder will be gone from your computer’s My Dropbox folder but be available on their servers for 30 days. You can access and retrieve the file if you change your mind by going to the website and logging into your account. However, the file will be deleted from the Dropbox servers after 30 days.

A drawback of Dropbox is that your files to be backed up must be in the My Dropbox folder; the developers are currently working to address this missing feature. In the meantime, you can create a symbolic link to sync any random folder (outside the My Dropbox folder) on your computer to the Dropbox servers. Please refer to this handy guide to learn more about creating symbolic links.

Editors (FrugalTrader’s) Note:  As I have multiple PC’s at home, I use Microsoft Live Sync to synchronize folders across computers automatically.  I then use MozyBackup free – 2GB (similar to dropbox) to automatically backup files online.

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Offline backup doesn’t have to involve “significant user intervention”. I use Allway Sync, which automatically syncs between my flash drive and a folder on my computer. Any files I create or update are automatically backed up, and if I want to work on something while at work, the changes will be synced back to my home computer the next time I plug the drive in.

Thanks for this post. For awhile I used but their business model was flawed causing them to shutdown their service (at least the free one). It was quite slow to upload and download. Any empirical observations re: speeds?

I love Dropbox, been using it for over a year now, it’s great.

Are you kidding me… saving your personal financial information to the Cloud?

First, there is no formal definition or agreement as to what the “Cloud” really is. In my personal opinion, with 15 years of internet/intranet programming, the Cloud is nothing more than the largest marketing push yet, after B2B, SaaS and SOA.

Technically speaking, the cloud is just common sense and is pretty much already out there.

Now having said that, why would anyone ever want to push information so private out to… well, pretty much anyone and anywhere?

There is a (very true) saying that “your security is as strong as your weakest link”. That means that these companies offering to store all your data may in theory have 1024-bit triple ciphers (encryption) with this featrue and with that flavor, but in the end it is too risky.

I’ve seen and worked for companies that spent millions of dollars each year protecting their entire infrastructure with the latest and the greatest just to realize the sysadmin had “toto” as the password to just about every server in the company (which did got hacked by the way… several times per quarter).

The ONLY option for your personal data is on a DVD inside your banks safety deposit box!

Another option I would suggest is to get an external hard drive. Nowadays, it is not difficult to find a 1TB external drive for about $100 CAD. You can then use some free sync applications (ie: Sync Toy, developed by Microsoft and for FREE!) to synchronize files from your computer to your external drive. Personally, I find the price per GB of online storage too high when compared to offline. Also, with online, you also need to consider your bandwidth (generally upload speeds are significantly slower than download speeds) and monthly upload/download limit imposed by your internet provider (my plan limits me to 60GB/mth). Imagine if you have over 500GB of data to port online – as I do. At 60GB/mth, it would take me over 8 months to move all that data online.

any company that uses amazon as their cloud providers can’t give you a 100% guarantee. In amazon’s legalese, it states that they are no way responsible for any data loss or damages due to using their service

I have been using dropbox for the past year. Mainly use it for downloading files on my smartphone.

Does anyone have info on how to compare mozy and drop box?

Not related to backing up but for remote easy access to files does anyone have experience using pogoplug?

Buy an external HD. No brainer. Why would anyone want to upload personal finance info to the internet. Just asking for trouble.

After losing data on a USB-drive, and paying through the nose to recover it (it wasn’t financial, but still … I had no choice), I looked at all these options.

Eventually I got a Network Attached Storage device and set it up as a RAID mirror system – data saved to one drive is automatically copied to a parallel drive. RAID is not quite the same as a true backup, however.

For key files I create password protected ZIP’s and then back those up monthly to – 50 GB of free cloud storage. Password ZIP’s are not perfect, but with a properly complex password they are better than plain storage. Note I do NOT copy anything that contains my real passwords, in case the privacy is breached.

what kind of software (windows) you recommened to sync with a NAS ( already mirrored , mapped as a couple of local drivers ) and a local USB harddrive ? the data is around 400GB . I currently use nero but it takes too long to run

Jeach has basically nailed it.Good post.

Robert… RAID stands for “Redundant Array of Independent Disks” and any redundancy is in a way or another a form of backup. Sorry, I know I’m being picky :)

Your mirroring idea is a good one, which reminds me to remind everyone that almost all storage mediums fail at one time or another. DVD’s and CD’s will fail in time with light and HDD have moving parts which fail and HDD and flash technologies, such as USB sticks fail with static electricity and humidity.

You may want to consider having copies of your data! For example, I put one copy in my safety deposit box and another in my girlfriend’s safety deposit box.

For less sensitive information, such as scans of all the receipts and their info (UPC, model numbers, serial numbers, etc), I put on a DVD and give a copy to my sisters. All of that information shouldn’t be within the same house… what if it burns? So will all your physical receipts and along with your USB stick and/or HDD. You need to keep it outside of your house.

But note that you may end up with huge problems if you keep your testament (last will) in your safety deposit box. Some kind of legal race-condition between the executor and the courts, but I can’t remember all of the details.

Robert… as for you password protect ZIP’s… they are very, very easy to break. Be careful with that.

There is a service I used called Wuala (
It’s basically a peer-to-peer backup/storage cloud where you can save your data to other people’s computers and they in turn can store data to your computer. The more data you set aside for others to use on your computer, the more data you can store to the cloud. Everything you send is encrypted before it leaves your computer, if you lose your password then you lose your data as there is no way of recovering it.

Would I trust this to keep all my banking information? Definitely not. But if you use something like Truecrypt to encrypt your data before you send it out there then it should be safe.

I use it to store pictures and such off site. There’s also a web-based client which allows you to access your files from anywhere on the internet, or even allow access to other people if you want to send file that are too large for email. Best of all it’s free if you choose to host storage space on your machine.

@Jeach and @Robert.

Agreed, standard zip passwords are useless.

I’d recommend 7Zip ( as an alternative, it’s open source, and supports AES-256 encryption. You _must_ choose a long, hard password (I recommend 63 random characters from

Print out the password, store it in your safety deposit box, also, for ease of use, burn the password in a text file to a CD, and store that in the safety deposit box too.


I’d agree that RAID and backup aren’t the same thing. For example, If I delete an important file that is on RAID. It gets deleted from both (all) drives at the same time, so in that case RAID alone doesn’t help.

If I keep a copy each time the file changes, say for 30 days, and then store it on a raid, I’m much better protected. I can go “back in time” and retrieve any version of that file over the last month.

I use NAS/RAID storage and then I have a additional external hard drive as a backup’s backup. Seems overkill but I sleep better at night. But this is because I keep all my family’s digital photo files there too and those get big when you dealing with RAW files.

Keep things simple and just buy an external hard drive. There are way too many companies that want us to send our information over the net so that it can be stored in some server thousands of miles away. The more control I have, the better for me and right now the external drive works great :)

Hi guys,
Interesting topic. I think it would be a good idea for people to keep in mind the fact that tradeoffs will have to be made in any backup system. The top ones which come to mind are:
1) Price
2) Convenience
3) Security (by which I mean how likely you are to be able to retrieve files under different circumstances)
4) Privacy

For me, privacy is less important than the others. Even with most of my financial data. I’m not worried that a competitor would steal my information. Although there are some people who have legitimate concerns about this, I think a lot of other people are worried about privacy because of hubris- our information is so important to us, it must to important to other people too! Identity theft, is, of course, a risk, but in this day and age, I think that there are many ways of stealing identity. I’d be happy to have a backup service (like drop box) which provides “good enough” protection on identity theft, because I will be doing other things to protect my identity anyway (keeping track of credit reports, identity insurance, etc). If I were doing something which were a crime in some jurisdiction, then I’d definitely be worried about privacy, since governments can get warrants- and who knows where the server is located?

For me, the biggest concern is that I won’t backup data, because it’s too much of a pain or too costly, or that if I do back it up, I do it in a way which won’t be much good in case of things- like fire- which make it impossible to use the backup. If my plan is to keep backups in a safety deposit box, I’m likely to not always drop it off at the bank every month like I should.

The other advantage of a cloud-based backup system is that it protects against forgetting stuff. If I forget to bring a file with me on a trip, it’s there to be picked up from the cloud. Although this kind of forgetfulness isn’t as catastrophic as actual data loss, it’s an event which is irritating and embarrassing enough to warrant “backup”.


Agreed off site physical backup is best but its not practical a lot of the time; and if it is not easy, most won’t do it.

I do use 7zip, BTW, I just use ZIP as a short form … my bad.

I use TrueCrypt on my USB drive in case I lose it … might actually be a good idea to create one or more small TC “files” and put my data files on there, and then backup the TC file(s) to the cloud …

I used an external HDD before, but as noted it doesn’t protect you when your house burns down, or other catastrophic failure.

The RAID mirror is workable as long as you are willing to risk possible data loss and/or incur the substantial fees for data recovery should your drive fail. A small USB key cost me $500 to recover … my 1 TB HDD would be much more!

Also note that full size DVD’s/CD’s often do not fit in a small SDB – my parents tried this once and then discovered it!

Key info such as account numbers and passwords I periodically give a printed copy to my mother for safe keeping, as well as a copy in the SDB. My ‘list’ is also a key information document in case I am killed suddenly – where everything is, what accounts I have, etc. Handy reference.

I have used Comodo Backup (free) to backup files to an external drive – backups to an NAS should be similar.

Key is: have something. The trade-off between security and convenience is a personal choice.

@Arlechino: The other advantage of a cloud-based [..]

Let me remind everyone to read very carefully the cloud/service provider warranties, liabilities, but most importantly the legalese.

When I started using Google’s office tools (documents and spread-sheets), I found it pretty neat. Then later I started using it for most of my work, including R&D (brainstorms, requirements, design, etc).

The work I was creating was very private and sensitive. Normally I would make anyone sign a NDA before sharing it.

It horrified me to read Google’s license agreement.

Although it didn’t specifically say that it ‘would’ show or distribute anything I had, it didn’t say it wouldn’t either. The legalese almost said that what I produced, now ‘could’ belong to Google. This is actually horrifying. Can you imagine being sued by Google years later for infringement on a product that I developed using their online tools. But due to that very vague license agreement, it ‘kind of’ belongs to them… or sort of?

On several attempts, I contacted Google in order to clarify their position. On every reply, it was the same vague, non-clarifying response. They have no reason to put it black on white.

Pretty much all of the license agreements for content/cloud/service providers are as vague.

Look at Facebook… according to their license, for all pictures posted on their site, they have a right to use them how they please. And what is written online belongs to them. You are no longer in control of your own written material!!!

All I’m saying is to be very careful about all your online data, whether financial or not!!

I know this is off topic, but…

Just recently, I was talking to a restaurant manager who was telling me that he did a search on all the major social web sites for three candidates with perceived equal competence. One candidate had pictures showing “how hard they partied” and another pictures too sick to even describe. He ended up taking the third candidate who basically did not participate in social sites. So yes, your info is being used, and possibly against you!!

Dropbox works great for me between my Linux and Windows PCs. No complaints.

Read about this on another blog, too! Seems to be getting really popular now! I will stick with my external hard drive for now I think.

I’m a computer programmer, I love the technology and the advances of it. But unfortunately we are entering in a period of time where the privacy is something that we are forgetting slowly. Any company in order to get clients can write any ‘Privacy policy’. One day even when you want to stick to these agreements you get a visit from the government, and in order to keep doing business you have to allow them access to all of this information. One big example, Google and China.
I’m sorry for my pessimist point of view, but I prefer to keep data in my own. Find a book named “1984” written by George Oswell, we are getting that point.

Thanks for the comments.

@Robert: I use a TrueCrypt container on a flash drive too. I’ve considered syncing that container to Dropbox but you cannot run TrueCrypt without admin access on a system. So, even with a portable version of TrueCrypt, I would always need to access a system as administrator, which may not be the case. So, I keep most files synced to Dropbox with the exceptions (along with the ones synced to Dropbox) kept in the flash drive’s TrueCrypt container.

: Good point. In my case I am using the ‘cloud’ as an off-site backup location in case of fire or flood. So security of the data is more important than being able to access it remotely. In which case, I have pretty much convinced myself to create the TC folder/file and keep my key documents there. This is only key files … my Raid takes care of day to day stuff, and my monthly backups mean I am never more than 30 days out of sync – which is plenty for my personal stuff.

I think my data is just as vulnerable (or more/less so? debate) on my PC as in the cloud … Trojans, spy ware, viruses, etc. as well as poor security systems can make my PC just as open as anything else. At least cloud providers have an incentive to try and protect your data (i.e. their reputation).

Good post, good comments! Thanks all


Google Docs are for personal use. For business you can use Google Apps which are not free but provide better security and have different license terms.

I use CrashPlan ( to backup my data. For the price of a 1TB drive I have automated backup solution with unlimited space for my photos, documents, etc.

There’s all kinds of options available for backup. I’ve used a number of options, and have considered yet another. I use GFS Backup, a free program that allows you to sync or backup in many ways to different resources either automatically, or on demand. You can backup to DVD, USB (stick or drive) NAS, or the ‘net. I have purchased online space from a provider ( as low as 9.95 per year in a recent special offer) which I use for a number of purposes such as web sites, data management and file backup. My main backup is to a local 1.5 RAID1 NAS, which is then incrementally backed up to the off-site server (unlimited space). All this happens in the background, without any intervention beyond the initial simple setup.

I use Dropbox to sync some files. It’s real benefit is ease of sharing between computers or different users. I find it less useful for backup.

I also found a FlingFTP useful. Any file you drop on the Fling folder is uploaded to an FTP site of your choosing.

Finally, Though I have not set this up yet, it strikes me that another family member & I could set up a mutually beneficial share between our computers (or better yet our NAS devices) to automatically retain our more sensitive info, with minimum worries of who might access the information. My data is then protected from local catastrophe.



I am using for our office (SQL snapshot Feature) and the Personal Version for me at home. 5$ a month gives me unlimited storage ( using 25gb now) with an individual AES key.
The data is getting uploaded thru a https connection, which, I think, is/was not with Dropbox.
Anyhow, works great.

For those who think they don’t need offsite storage, you’re just kidding yourselves. The rule of thumb is two local copies and one offsite. A fire, a robbery, any other kind of malicious act and you’re screwed if you only have local copies of your data.

My home was broken into a few years a go and my PC and my primary external backup drive were stolen and never recovered.So I can tell you this is not a theoretical issue.

Luckily the thieves were interrupted before stealing my secondary backup drive. Only the power supply adapter was stolen. After replacing the missing power supply.adapter I was able to recover my files from a year old backup. Then I had to painfully reconstruct the missing year from manual records.

Since then I have been backing up all my important files using’s premium service.

An alternative to DropBox is Microsoft Live Mesh. (

It’s free, but there is a limit on how much space you have (5 GB I think).

// Matt

@Matt: The reason I prefer and use Dropbox is due to the fact that I’m primarily a Linux user and Dropbox is one of the few cross-platform clients. I had been using SpiderOak for the same reason but found the Dropbox syncing more seamless.

I’ve heard a lot about Dropbox lately and am going to check it out soon. I last used online storage more than half a decade ago and I can’t even remember the name of the site that I used at the time. But now, with faster connections, it should be quite handy to have a decent online storage medium. Hopefully, there’s more competition in this area so we get higher storage capacities and maybe even file hosting services.

Till then,


Thinking about this over the last few days, and I have been experimenting with using TrueCrypt and a ‘dynamic’ file with a 3-layer AES-twofish-something-else encryption. Basically it creates a file on your local PC which mounts as a drive, and you can add or modify sensitive files as needed. Then you periodically backup that encrypted file to the cloud. The actual file size depends on what you store in it, you set a ‘max’ file size when creating it initially.

Reasonably convenient, although you are re-uploading all the files every time, and not an incremental backup.

I can run True Crypt from a USB drive – I am not an expert but there is a way to do it without admin privileges – or at least with admin privs to your own USB drive. There is something on their site as to how to do it.

@Robert: You are referring to a TrueCrypt container, which mounts as a drive and stores files inside it. Syncing the container may be an incremental backup, since you are replacing one file with another of the same name. It is just like syncing any spreadsheet after making modifications to it. Dropbox backs up only the changed part of the file. In fact, I’ve renamed files and it syncs accordingly rather than assuming that I’ve created a new file.

I haven’t checked the TrueCrypt site in a while but unless they’ve introduced something new to bypass the admin requirement, I am still clueless. I’ll check the site to see if I can find the workaround or if you remember, please let me know.

@Robert: The only way to run without admin privileges is when TrueCrypt is installed on the computer by an admin; other users can then mount volumes, access files and save changes. But, my requirement is that I am looking to run TrueCrypt in portable mode from a flash drive and access my container volume stored on the same drive. This requires an admin password and that is the limitation I’ve encountered, which prevents me from syncing the TrueCrypt container to Dropbox. It serves no purpose if I am left with a computer at a public terminal or owned by some person who is giving me his computer for a few minutes. The person may provide his admin password but there is a bit of explaining to do (even if it’s just curiosity)!

As a side note, you could convert your folders to zips with passwords (.7z) and sync them to Dropbox.

My wife and I both have a FREE Gmail account and share our calendars to keep each other in the know. We also share many Google docs–whomever creates them can share them with other Gmail users so they also show up in the other users’ Google Docs account. We now keep our chequebook online (no, we don’t list the account number) so either of us can writer cheque and update the register from work, home, or Smartphone. The budget is also a shared document, however, my wife tracks the numbers. Both have an alerts feature turned on so that when a change gets made a copy of the spreadsheet is embedded in an email which notifies me. If I click on it, it opens the shared docs which can then be edited based on the sharing rights assigned. Google is amazing for so many reasons among which is that you can do so much without paying them a penny. And for just $5 per YEAR you can upgrade from about 7.5 Gigs of storage to 20 Gigs!