6 Steps to Protect Your Money Now

After Monday's 504 point drop on the Dow and the news of Merrill Lynch, Lehman Brothers and AIG, we know many of you are more concerned than ever about the safety of your money.

We won't sugarcoat it. You should be concerned.

There will be more days like Monday before the excess is fully wrung from the system.

But being concerned does not equal being scared. Here's how you can protect yourself in six short steps:

1. Turn off CNBC and Fox Business News. If their anchors aren't scaring you with dire words to keep you glued to the television, their Wall Street contributors are, at best, trying to keep you invested, or at worst, trying to get you to buy "bargains" they see emerging.
2. Be sure your bank accounts don't exceed the FDIC limits. If any accounts do, take the penalty (if necessary) and move some money to a different bank. Better to take a small tax-deductible penalty now than a possible loss of the amount that exceeds coverage.
3. Merrill Lynch clients, stop worrying. Your account and your broker will still be there, as will the name Merrill Lynch. Bank of America is acquiring all of the accounts and most of the brokers. Don't be surprised, however, if your broker changes firms over the next few months. The big account handlers are already being courted by other firms. (We'll post an article soon that will help you decide if you should follow your broker.)
4. Lehman Brothers clients, calm down. The brokerage unit is still doing business. Get out your last statement and confirm your portfolio with your broker. If you like your broker, call and speak candidly with him or her about their plans. If you don't like your broker, start shopping for a new firm today.
5. Click on our recent article (Brokerages Failing: How to Protect Your Money) that outlines how to be sure that your brokerage account is safe.
6. Owners of insurance policies from AIG, check with your state insurance regulator's office. Life and health policies are covered by your state's guaranty fund usually capped at $300,000 per policy.

These six simple steps should enable you to sleep well tonight in the midst of the current crisis. We'll continue to watch closely and help you every step of the way.

For more on how to protect your money, check out these links:

• What the Fannie and Freddie Takeover Really Means
• Is Your Bank Safe?
• What to do if Your Bank Fails