Data privacy has always been important. It’s why people put locks on filing cabinets and rent safety deposit boxes at their banks. But as more of our data becomes digitized, and we share more information online, data privacy is taking on greater importance.

A single company may possess the personal information of millions of customers—data that it needs to keep private so that customers’ identities stay as safe and protected as possible, and the company’s reputation remains untarnished. (Can you say “data breach”?) But data privacy isn’t just a business concern.

You, as an individual, have a lot at stake when it comes to data privacy. The more you know about it, the better able you’ll be to help protect yourself from a large number of risks.

What is data privacy?

Data privacy relates to how a piece of information—or data—should be handled based on its relative importance. For instance, you likely wouldn’t mind sharing your name with a stranger in the process of introducing yourself, but there’s other information you wouldn’t share, at least not until you become more acquainted with that person. Open a new bank account, though, and you’ll probably be asked to share a tremendous amount of personal information, well beyond your name.

In the digital age, we typically apply the concept of data privacy to critical personal information, also known as personally identifiable information (PII) and personal health information (PHI). This can include Social Security numbers, health, and medical records, financial data, including bank account and credit card numbers, and even basic, but still sensitive, information, such as full names, addresses, and birthdates.

For a business, data privacy goes beyond the PII of its employees and customers. It also includes the information that helps the company operate, whether it’s proprietary research and development data or financial information that shows how it’s spending and investing its money.

Why is data privacy important?

When data that should be kept private gets in the wrong hands, bad things can happen. A data breach at a government agency can, for example, put top secret information in the hands of an enemy state. A breach at a corporation can put proprietary data in the hands of a competitor. A breach at a school could put students’ PII in the hands of criminals who could commit identity theft. A breach at a hospital or doctor’s office can put PHI in the hands of those who might misuse it.

5 simple tips to help protect your personal data

Since data privacy is such a prevalent issue, many government organizations and corporations spend millions of dollars each year to help protect their data—which could include your PII—from exposure. The average consumer probably doesn’t have that kind of money to spend. But there are inexpensive steps you can take to help protect your data. Here are a few suggestions:

  1. At home, use a mail slot or locking mailbox, so that thieves can’t steal your mail.
  2. Before discarding, shred documents, including receipts and bank and credit card statements, that contain personal information.
  3. Make sure to secure your home Wi-Fi network and other devices so that criminals can’t “eavesdrop” on your online activity.
  4. Don’t automatically provide your Social Security number just because someone asks for it. Determine if they really need it and, if so, ask how they’ll help protect it.
  5. Use strong, unique passwords for all of your online accounts.

One final recommendation to help you keep your data private: Regularly assess the privacy settings on your social media accounts. If you don’t, you may be sharing a lot more than just your name with people you’ve never met—and a savvy criminal could use that information to steal your identity and a lot more.