Your Internet Consultant - The FAQs of Life Online
File security is subtle if you're using a UNIX-based Internet host, because each file and directory can have its own access permissions, independent of the security of any other files or directories. In other words, if you set up your home directory to have minimal access permission, files within your account still have the potential of being read by others if their permission is set incorrectly.
There are two steps to solving this: I recommend typing chmod 711 $HOME to allow the system to access files such as .forward and .plan without problems but prevent people from using ls to list the contents of your home directory. Further, if you're prepared to work with your .login or .profile account customization file, type umask 077 so that any files you create are, by default, set up so that you can read and write them but no one else can do anything with them. You can always type chmod +r filename to add read capability later if needed. If you're not sure what your account security is, ask your system administrator for assistance and be sure to indicate the results of the command ls -ld $HOME, too.
If you're not on a UNIX system, your files are probably local to your personal computer, and much of this is less of an issue. Nonetheless, remember that people can still flip on your computer and look through your files, so private data should be kept encrypted or on a floppy disk that you keep in your office desk or your briefcase. An ounce of prevention can save a lot of embarrassment later.